Common use of Equityholders’ Representative Clause in Contracts

Equityholders’ Representative. (a) The Equityholders, by the approval and adoption of this Agreement and without any further action of any of the Equityholders or the Company, hereby appoint the Equityholders’ Representative as agent and attorney in fact for the Company and each Equityholder, and authorize the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.

Appears in 3 contracts

Sources: Merger Agreement (Semnur Pharmaceuticals, Inc.), Merger Agreement (Semnur Pharmaceuticals, Inc.), Merger Agreement (Sorrento Therapeutics, Inc.)

Equityholders’ Representative. (a) The Equityholders, by By the approval execution and adoption delivery of this Agreement Agreement, each Equityholder hereby irrevocably constitutes and without appoints ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as his or her true and lawful agent and attorney-in-fact (the “Equityholders’ Representative”), with full power of substitution to act in such Equityholder’s name, place and stead with respect to all transactions contemplated by and all terms and provisions of this Agreement, and to act on such Equityholder’s behalf in any dispute, litigation or arbitration involving this Agreement, and to do or refrain from doing all such further action of any of the Equityholders or the Companyacts and things, hereby appoint and execute all such documents as the Equityholders’ Representative as agent shall deem necessary or appropriate in connection with the transactions contemplated by this Agreement, including, without limitation, the power: (i) to waive any condition to the obligations of such Equityholder to consummate the transactions contemplated by this Agreement; (ii) to execute and attorney in fact for the Company deliver all ancillary agreements, certificates and each Equityholderdocuments, and authorize to make representations and warranties therein, on behalf of such Equityholder which the Equityholders’ Representative (i) to take all action deems necessary to consummate or appropriate in connection with the Merger and consummation of the other transactions contemplated by this Agreement and Agreement; (iii) to do or refrain from doing any further act or deed on behalf of such Equityholder which the Escrow Equityholders’ Representative deems necessary or appropriate in its sole discretion relating to the subject matter of this Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, as fully and completely as such Equityholder could do if personally present; (iiiv) to give and receive all notices required and communications (including to be given to the Equityholders’ Representative under this Agreement, ▇▇▇▇.▇▇▇ and the Escrow Agreement or the Stockholder Related Agreements, Agent); (iiiv) to review, negotiate and authorize delivery payment to Parent of ▇▇▇▇.▇▇▇ from the General Escrow Property and the Designated Escrow Property Account in satisfaction of claims by Parent ▇▇▇▇.▇▇▇ in accordance with the terms of the Escrow Agreement and set off of Milestone Payments pursuant this Agreement; (vi) to Section 8.6, (iv) object to such claims pursuant payments, to this Agreement, (v) consent or agree to, to negotiate, enter into, or, if applicable, contest, prosecute or defend, into settlements and compromises of, and demand arbitration and comply with Orders orders of courts and awards of arbitrators with respect to, to such claims; and (vii) to amend this Agreement or the Escrow Agreement on behalf of the Equityholders. The Equityholders’ Representative may resign at any time, resolve any such claims, take any actions in connection provided that it reasonably cooperates with the resolution Equityholders for the appointment of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment a successor Equityholders’ representative. (b) The appointment of the Equityholders’ Representative for the accomplishment shall be deemed coupled with an interest and shall be irrevocable, and ▇▇▇▇.▇▇▇, its Affiliates and any other Person may conclusively and absolutely rely, without inquiry, upon any action of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions Equityholders’ Representative on behalf of the Equityholders and take any and in all additional action as is contemplated matters referred to be taken herein. All notices delivered by or on behalf of the Equityholders by the terms of this Agreement ▇▇▇▇.▇▇▇ or the Escrow Agreement, including, without limitation regarding Company (Afollowing the Closing) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1whether pursuant hereto or otherwise) receive notice of, or take action on behalf of for the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any benefit of the Equityholders in a manner that is different or disproportionate from one another (shall constitute notice to the “Limits on Authority”)Equityholders. Notwithstanding the foregoing, the The Equityholders’ Representative shall have no obligation to act for the Equityholders on behalf all of the Equityholdersmatters set forth in this Agreement. (c) All actions, except as expressly provided herein decisions and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations instructions of the Equityholders’ Representative in any ancillary agreementtaken, schedule, exhibit made or given pursuant to the Disclosure Schedule. The Person serving as authority granted to the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under this Section 1.5 or Section 1.13 or any other matter relating to Article I, 1.6 shall be conclusive and binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (cd) Certain The provisions of this Section 1.6 are independent and severable, shall constitute an irrevocable power of attorney, coupled with an interest and surviving death or dissolutions, granted by the Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representativesrepresentatives, personal Representatives, successor trustees successors and successors assigns of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and . (e) Notwithstanding any reference provision to the contrary in this Agreement Section 1.6 or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights any other section of the Equityholders under this Agreement, whether pursuant to testamentary disposition, either Equityholder can terminate the laws appointment and agency relationship of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as the Equityholders’ Representative Group hereunder: and the power and authority granted to such Equityholders’ Representative hereunder upon written notice to ▇▇▇▇.▇▇▇ and the other Equityholder; provided that the termination of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as the Equityholders’ Representative shall not be effective for any purpose under this Agreement unless and until such time as (i) are coupled with an interest the Equityholders have appointed a replacement Equityholders’ Representative and shall be irrevocable and survive provided notice of the death, incompetence, bankruptcy or liquidation appointment of any Equityholder and shall be binding on any successor thereto, such replacement to ▇▇▇▇.▇▇▇ and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of such replacement Equityholders’ Representative has delivered to ▇▇▇▇.▇▇▇ a counterpart signature page hereto pursuant to which such replacement Equityholders’ Representative confirms his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (ii) rely upon any signature believed by it agreement to be genuine, subject to and (iii) reasonably assume that a signatory has proper authorization to sign on behalf bound by all of the provisions set forth in this Agreement that were applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in his capacity as the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign immediately prior to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion effectiveness of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemreplacement.

Appears in 2 contracts

Sources: Equity Purchase Agreement (Care.com Inc), Equity Purchase Agreement (Care.com Inc)

Equityholders’ Representative. (a) The EquityholdersAt the Closing, by the approval and adoption of this Agreement and without any further action act of any of the Equityholders Company Stockholder or the CompanyEquity Award Holder, hereby appoint the Equityholders’ Representative shall be appointed as agent and attorney in attorney-in-fact for the each Company Stockholder and each EquityholderEquity Award Holder, for and authorize the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreementon behalf of such Persons, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required and communications, to be given retain and appoint advisors and to the Equityholders’ Representative under this Agreementassert, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, into settlements and compromises of, and demand arbitration and comply with Orders orders of courts and awards of arbitrators with respect to, such claims, resolve to all claims and disputes under this Agreement and any such claims, take any actions in connection with the resolution of any dispute relating to this other Transaction Agreement, to negotiate and execute any waivers or the transactions contemplated by amendments of this Agreement, by arbitration, settlement Agreement or otherwise, any other Transaction Agreement and to take or forego any or all actions permitted necessary or required of any Equityholder or necessary appropriate in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of foregoing. The Company Stockholder Approval will, to the other terms, conditions and limitations of this Agreement, maximum extent permitted under Applicable Law (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreementsincluding DGCL § 251(b)), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf constitute knowing and irrevocable ratification and approval of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, appointment by the holders of a majority in interest of the aggregate value outstanding Class A Common Shares and Series A Preferred Shares, voting together as a single class, and authorization of property then held the Equityholders’ Representative to serve in such capacity. The Equityholders’ Representative may resign from such position at any time upon written notice to Parent, and the General Escrow Fund upon not less than thirty (30) daysCompany Stockholders and Equity Award Holders shall appoint a replacement Equityholdersprior Representative by approval of BCC Enven Investments, L.P. on written notice to Parent. The immunities and rights to indemnification No bond shall survive the resignation or removal be required of the Equityholders’ Representative. Notices or communications to or from the Equityholders’ Representative shall constitute notice to or any member from each of the Advisory Group Company Stockholders and Equity Award Holders. The power of attorney granted in this Section 10.04 is coupled with an interest and is irrevocable, may be delegated by the Closing and/or any termination Equityholders’ Representative and shall survive the death, incapacity, illness, bankruptcy, dissolution, or other inability to act of this Agreement and the Escrow Agreementeach Company Stockholder or Equity Award Holder. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders its Representatives shall be liable for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement hereunder as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, faith and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders Company Stockholders and Equity Award Holders shall severally severally, on a pro rata basis in accordance with the percentage of the aggregate Per Share Consideration received by each Company Stockholder and not jointly Equity Award Holder, indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees liability or expenses (including fees, disbursements and costs expense incurred without bad faith on the part of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreementhereunder, including the Escrow Agreement fees and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders Company Stockholders and Equity Award Holders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to administration of its duties as the Equityholders’ Representative hereunder. The foregoing indemnities will survive the Closing, the resignation or removal of the Equityholders’ Representative or the termination of this Agreement. (c) A decision, the Escrow Agreement act, consent or the transactions contemplated hereby or thereby. Furthermore, instruction of the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided constitute a decision, act, consent or instruction of all Company Stockholders and Equity Award Holders, with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject respect to the Limits on Authoritymatters set out in Section 10.04(a) and shall be final, the Equityholders’ Representative shall have full power binding and authority on behalf of conclusive upon each Equityholder to take any Company Stockholder and all actions on behalf of, execute any and all instruments on behalf ofEquity Award Holder, and execute or waive any Parent and all rights of, the Equityholders under this Agreement, the Escrow Agreement its Subsidiaries and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The EquityholdersExchange Agent may rely upon any such decision, by approval and adoption of this Agreementact, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions consent or instruction of the Equityholders’ Representative as to (A) being the settlement of any claims for indemnification by Parent pursuant to Article VIIIdecision, (B) actions taken in respect of indemnification claimsact, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made consent or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, every Company Stockholder and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwiseEquity Award Holder. (fd) The powers, immunities Company Stockholders and rights to indemnification granted to Equity Award Holders acknowledge that the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will advice. The relationship created herein is not to be liable for any loss of principal of the Expense Fund other than construed as a result joint venture or any form of its negligence, willful misconduct partnership between or bad faith. The among the Equityholders’ Representative will hold these funds separate from or any Company Stockholder or Equity Award Holder for any purpose of U.S. federal or state law, including federal, state or non-U.S. income Tax purposes. Neither the Equityholders’ Representative nor any of its corporate funds Affiliates owes any fiduciary or other duty to any Company Stockholder or Equity Award Holder. (e) Each Company Stockholder, Equity Award Holder and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Company acknowledges that the Equityholders’ Representative is not acting party to this Agreement solely for purposes of serving as a withholding agent or in any similar capacity in connection with the Expense Fund“Equityholders’ Representative” hereunder, and has no tax reporting action, suit, claim, investigation or income distribution obligations. As promptly as reasonably practicable proceeding will be brought by, or on behalf of, any Company Stockholder or Equity Award Holder against the Equityholders’ Representative with respect to this Agreement or the transactions contemplated hereby, or any statement, certificate, instruction, opinion, instrument or other documents delivered hereunder (and in with it being understood that any event within three (3) Business Days) following covenant or agreement of or by the reasonable determination “parties” or “each of the parties” will not be deemed to require performance by, or be an agreement of, the Equityholders’ Representative unless performance by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, expressly provided for in such covenant or the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining expressly so agrees in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(bwriting), providedin each case, that Parent shall reasonably cooperate (i) other than in respect of matters arising from or in connection with bad faith on the part of the Equityholders’ Representative to facilitate and (ii) without limiting any separate Contract that may be entered into between the payment Equityholders’ Representative, on the one hand, and one or more Company Stockholders or Equity Award Holders, on the other hand, regarding the Equityholders’ Representative’s role as Equityholders’ Representative hereunder. (f) Each Company Stockholder and Equity Award Holder, by its acceptance of any a portion of such payment that is the consideration payable hereunder, accepts and agrees to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systembe bound by the provisions set forth in this Section 10.04.

Appears in 2 contracts

Sources: Merger Agreement (Talos Energy Inc.), Merger Agreement (Talos Energy Inc.)

Equityholders’ Representative. (a) At the Closing, Shareholder Representative Services LLC shall be constituted and appointed as the Equityholders’ Representative. The Equityholders’ Representative shall be the representative, by agent and attorney-in-fact for and on behalf of the approval and adoption of Selling Securityholders for all purposes in connection with this Agreement and without the agreements ancillary hereto, including to: (i) execute, as the Equityholders’ Representative, this Agreement and any further action agreement or instrument entered into or delivered in connection with the Transactions, (ii) give and receive notices, instructions and communications permitted or required under this Agreement, or any other agreement, document or instrument entered into or executed in connection herewith, for and on behalf of any Selling Securityholder, to or from Purchaser (on behalf of itself or any other Indemnified Person) relating to this Agreement or any of the Equityholders or the Company, hereby appoint the Equityholders’ Representative as agent Transactions and attorney in fact for the Company and each Equityholder, and authorize the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the any other transactions matters contemplated by this Agreement or by such other agreement, document or instrument (except to the extent that this Agreement expressly contemplates that any such notice or communication shall be given or received by each Selling Securityholder individually), (iii) review, negotiate and agree to and authorize Purchaser to reclaim an amount of cash from the Escrow Agreement, or the defense and/or settlement Holdback Fund in satisfaction of any claims for which the Equityholders may be required to indemnify Parent asserted by Purchaser (on behalf of itself or any other Indemnified Party Person, including by not objecting to such claims) pursuant to this Article VIII, (ii) to give and receive all notices required to be given to the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6IX, (iv) object to such claims pursuant to this AgreementSection 9.6, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating hereto or to this Agreement, or the transactions contemplated by this Agreement, Transactions by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder Selling Securityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and Selling Securityholders, (vii) consent or agree to make decisions on behalf of the Equityholders any amendment to this Agreement or to waive any terms and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms conditions of this Agreement providing rights or benefits to the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements Selling Securityholders (other than with respect to the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf payment and issuance of the applicable Indemnifying Party Total Consideration payable or issuable pursuant to Section 1.5(a) and Section 1.5(c) less the Holdback Amount) in accordance with the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein terms hereof and in the Escrow Agreementmanner provided herein, (viii) take all actions necessary or appropriate in the Engagement Agreement, and for purposes of clarity, there are no obligations judgment of the Equityholders’ Representative for the accomplishment of the foregoing, in each case without having to seek or obtain the consent of any ancillary agreementPerson under any circumstance and (ix) utilize the Expense Fund in connection with any of the foregoing. Purchaser and its Affiliates (including after the Closing, schedulethe Company) shall be entitled to rely on the appointment of Shareholder Representative Services LLC as the Equityholders’ Representative and treat such Equityholders’ Representative as the duly appointed attorney-in-fact of each Selling Securityholder and as having the duties, exhibit power and authority provided for in this Section 9.7. The Selling Securityholders shall be bound by all actions taken and documents executed by the Equityholders’ Representative in connection with this Article IX, and Purchaser and other Indemnified Persons shall be entitled to rely exclusively on any action or decision of the Disclosure ScheduleEquityholders’ Representative. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value amount of property cash then held in the General Escrow Holdback Fund (or, in the event that there is no cash then held in the Holdback Fund by the Selling Securityholders collectively having a Pro Rata Share greater than 50%) upon not less than thirty (30) 30 days’ prior written notice to ParentPurchaser. The immunities and rights to indemnification No bond shall survive the resignation or removal be required of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow AgreementRepresentative. (b) Subject to the Limits on Authority, all decisions and actions taken by the The Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may shall not be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation liable to any of the parties to this Agreement or to the Equityholders Selling Securityholder for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement hereunder as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, faith (and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. ) and without gross negligence or willful misconduct provided, that notwithstanding the definition of “willful misconduct” set forth in Exhibit B, the term “willful misconduct” as used in each instance in this Section 9.7 (and in Section 1.6(c)) shall not have the meaning given to it in Exhibit B, but instead shall have the meaning given such term under the applicable laws of the State of Delaware without reference to the definition in Exhibit B. The Equityholders Selling Securityholders shall severally and (based on each Selling Securityholder’s Pro Rata Share compared to the aggregate of the Pro Rata Shares of all Selling Securityholders) but not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and hold it harmless against any and all losses, liabilities, damages, claims, penalties, fines, forfeitures, actions, fees, 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, “Representative Losses”) in an amount not to exceed the portion of the Total Consideration actually paid to each such Selling Securityholder arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under execution and performance of this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “Representative Losses”)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 gross negligence, negligence or willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders Selling Securityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, negligence or willful misconduct or bad faithmisconduct. If not paid directly to the Equityholders’ Representative by the EquityholdersSelling Securityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from (i) the funds in the Expense Fund, and second, from any distribution of (ii) the General Escrow Fund, Designated Escrow amounts in the Holdback Fund or Milestone Payment at such time as remaining amounts would otherwise be distributable to the Equityholders Selling Securityholders, and (iii) from any other future amounts that become payable to the Selling Securityholders under the terms of this Agreement at such time as any such amounts would otherwise be distributable to the time of distributionSelling Securityholders; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may beaforementioned sources of funds, this does not relieve the Equityholders Selling Securityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that In no event will the Equityholders’ Representative shall not be required to expend or risk advance its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute the Selling Securityholders or waive any and all rights of, the Equityholders under otherwise. Notwithstanding anything in this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoingcontrary, and solely any restrictions or limitations on liability or indemnification obligations of the Selling Securityholders set forth elsewhere in this Agreement are not intended to be applicable to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled indemnities provided to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreementsection. The foregoing indemnities will survive the Closing, the Escrow Agreement resignation or removal of the Equityholders’ Representative or the termination of this Agreement. (c) After the Closing, any notice or communication given or received by, and any Stockholder Related Agreement (other than decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of, the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon Equityholders’ Representative that is within the instructions or decisions scope of the Equityholders’ Representative; (ii’s authority under Section 9.7(a) shall constitute a notice or communication to or by, or a decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of all actionsthe Selling Securityholders and shall be final, decisions binding and instructions conclusive upon each such Selling Securityholder; and each Indemnified Person shall be entitled to rely exclusively upon any such notice, communication, decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction as being a notice or communication to or by, or a decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of, each and every such Selling Securityholder. Purchaser, the Company and the Indemnified Persons are hereby relieved from any Liability to any Person for any acts done by them in accordance with such notice, communication, decision, action, failure to act within a designated period of time, agreement, consent, settlement, resolution or instruction of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwiseRepresentative. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.

Appears in 2 contracts

Sources: Stock Purchase Agreement (Grail, Inc.), Stock Purchase Agreement (Grail, Inc.)

Equityholders’ Representative. (a) The Equityholders, by Immediately upon the approval and adoption of this Agreement and without any further action of any by the requisite vote or written consent of the Equityholders or Stockholders, each Equityholder shall be deemed to have consented to the Companyappointment of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, hereby appoint ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇, collectively, as the Equityholders’ Representative, as the attorney-in-fact for and on behalf of each such Equityholder, and the taking by the Equityholders’ Representative as agent of any and attorney in fact for all actions and the Company and each Equityholder, and authorize making of any decisions required or permitted to be taken by the Equityholders’ Representative under this Agreement shall require the affirmative vote of two of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇. The powers of the Equityholders’ Representative includes the exercise of the power to (ia) to take all action necessary to consummate the Merger execute and the other transactions contemplated by deliver this Agreement and the Escrow Agreement, and, in each case, any amendment thereof or waiver thereunder, (b) subject to the defense and/or settlement limitations set forth in Section 1.12(l), make the sole determination with respect to the amounts, timing, and allocation of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIIIEarnout Bonus Payment, (iic) to give and receive all notices required to be given to the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent Purchaser of the General Escrow Property and the Designated Escrow Property Amount, or any portion thereof, in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6Indemnification Claims, (ivd) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, into settlements and compromises of, and demand arbitration of and comply with Orders orders of courts and awards of arbitrators with respect toto Indemnification Claims, such claims, (e) resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwiseIndemnification Claims, and (f) take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement and the Escrow Agreement. Accordingly, (vi) consult with legal counsel, independent public accountants the Equityholders’ Representative has unlimited authority and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) power to make decisions act on behalf of each Equityholder with respect to this Agreement and the Equityholders Escrow Agreement and take any the disposition, settlement or other handling of all Indemnification Claims, rights or obligations arising from and all additional action as is contemplated taken pursuant to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may Equityholders will be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, bound by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance connection with this Article IXAgreement or the Escrow Agreement, including without limitation (i) agreements between and Purchaser shall be entitled to rely on any action or decision of the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Representative. The Equityholders’ Representative and Parent relating will incur no liability with respect to the Escrow Agreement any action taken or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing suffered by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreementreliance upon any notice, the Escrow Agreement and the Engagement Agreement (such Equityholdersdirection, including their individual representativesinstruction, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its membersconsent, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability statement or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred document believed by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from genuine and to have been signed by the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as proper Person (and shall have no responsibility to determine the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurredauthenticity thereof), nor does it prevent for any other action or inaction, except the Equityholders’ Representative from seeking any remedies available to it at law Representative’s own willful misconduct, bad faith or otherwisegross negligence. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to In all questions arising under this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. FurthermoreEscrow Agreement, the Equityholders’ Representative shall may rely on the advice of counsel, and the Equityholders’ Representative will not be liable to Equityholders for anything done, omitted or suffered in good faith by the Equityholders’ Representative based on such advice. The Equityholders’ Representative will not be required to take any action involving any expense unless the payment of such expense is made or provided for in a manner satisfactory to the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses Representative. If and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions any such appointment of the Equityholders’ Representative as is revoked, such revocation shall be considered a breach of this Agreement and Purchaser shall be entitled to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claimssuch resulting Losses from such revocation. The initial Equityholders’ Representative may appoint a successor Equityholders’ Representative, and (C) any other actions required such appointment shall become effective upon written notice to Purchaser. Each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ may be removed by action of a majority of the Equityholders. In the event of the resignation, removal, death or permitted to incapacity of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇, a successor for such Person shall thereafter be taken appointed by vote or written consent of a majority of the Indemnifying Equityholders. Any new or successor Equityholders’ Representative will assume all rights and obligations of the initial Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.

Appears in 1 contract

Sources: Merger Agreement (Spark Networks Inc)

Equityholders’ Representative. (a) The As, and by voting in favor of or consenting to the Merger and/or by virtue of the approval of the Merger and or by virtue of tendering their Units to receive their share of the Merger Consideration, the Equityholders shall be deemed to have irrevocably designated Parent as the “Equityholders’ Representative”, to represent the Equityholders, their respective successors, heirs, representatives and assigns as representative, agent and attorney-in-fact from and after the date hereof in all matters relating to the Acquisition Documents and the contemplated transactions, including the exercise of the power and authority to take any and all actions and make any and all decisions required or permitted to be taken or made by the approval and adoption of Equityholders under this Agreement following the Closing. Further, each Equityholder fully and completely, without any further action of any of the Equityholders or the Company, hereby appoint the Equityholders’ Representative as agent and attorney in fact for the Company and each Equityholder, and authorize the Equityholders’ Representative restriction: (i) agrees to take all action necessary to consummate the Merger and the other transactions contemplated be bound by this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be received or given to by, and all agreements and determinations made by, and all documents executed and delivered by the Equityholders’ Representative under this Agreementthe Acquisition Documents after the Closing Date, the Escrow Agreement or the Stockholder Related Agreementsincluding, (iii) to reviewwithout limitation, negotiate any and authorize delivery to Parent of the General Escrow Property all documents executed and the Designated Escrow Property in satisfaction of claims delivered and all determinations made by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment with respect to any of the foregoing matters set forth in subsection (ii) below; (ii) authorizes the Equityholders’ Representative, on and all of after the other terms, conditions and limitations of this Agreement, Closing Date (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (viiA) to assert claims, make decisions demands and commence Actions on behalf of such Equityholder and under the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow AgreementAcquisition Documents, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreementdispute or to refrain from exercising remedies available to such Equityholder under, and exercise or refrain from exercising remedies available to such Equityholder under, the Escrow Agreement Acquisition Documents, and to sign any releases or the Stockholder Related Agreements other documents with respect to such dispute or remedy (other than the Non-Competition Agreementsand to bind such Equityholder in so doing), provided that (C) to give such instructions and do such other things and refrain from doing such things as the Equityholders’ Representative shall not be authorized deem appropriate to (1) receive notice of, or take action on behalf carry out the provisions of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying PartyAcquisition Documents, (2D) agree to make give any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or and all consents and notices under the Acquisition Documents, (3E) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoingto perform all actions, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreementexercise all powers, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, fulfill all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or duties otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction assigned to the Equityholders’ Representative in connection with its services under this Agreement, (F) to withhold payments to such Equityholder in an amount equal to its Reserve Share, determined in accordance with Part IV of Schedule 2.03, to establish a reserve, in the Escrow Reserve Amount, out of funds otherwise payable to such Equityholders pursuant to the provisions of this Agreement for the payment of any amounts Equityholder’s Representative deems necessary, including with respect to amounts due in connection with indemnification obligations under Article IX, and (G) to negotiate and resolve any dispute arising with respect to the indemnification obligations set forth in Article IX and the Engagement Agreement payment of any Escrow Amount pursuant to this Agreement; (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither iii) authorizes and directs the Equityholders’ Representative nor to receive all payments under the Acquisition Documents payable to Equityholders on or after the Closing Date on its membersbehalf, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement invest such funds pending their disbursement in such manner as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant its sole discretion deems appropriate (subject to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption terms of this Agreement, agree, in addition ); and to disburse pro rata any payments due to such Equityholder under the foregoing, and solely to the extent consistent with Section 9.1(a), that: Acquisition Documents. Each Equityholder agrees that (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iiia) the provisions of this Article IX Section 9.08 are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by the Acquisition Documents; (b) the remedy at Law for any breach of the provisions of this Agreement, the Escrow Agreement Section 9.08 would be inadequate and the Stockholder Related Agreements; and (ivc) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement Section 9.08 shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees successors and successors assigns of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement . The Equityholders agree to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing reimburse the Equityholders’ Representative for any thirdout-party of-pocket costs and expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Groupit incurs in performing its services hereunder. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any shall share such interest or earnings. The Equityholders’ Representative is not providing any investment supervisionreimbursement expenses, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systempro rata.

Appears in 1 contract

Sources: Merger Agreement (American Cellular Corp /De/)

Equityholders’ Representative. (a) The Equityholders, by By the approval and adoption of this Agreement the Merger, and by receiving the benefits thereof, including any consideration payable hereunder, and without any further action of any Equityholder, each Equityholder shall be deemed to have irrevocably constituted, approved and appointed Shareholder Representative Services LLC (which, by execution of the Equityholders or the Companythis Agreement, hereby appoint accepts such appointment) as the Equityholders’ Representative as of Closing for all purposes in connection with this Agreement and any related agreements, including to act as the sole agent and attorney in attorney-in- fact for and on behalf of the Company Equityholders (in their capacity as such), with full power of substitution, to take all actions on behalf of the Equityholders in connection with this Agreement, including to execute and each Equityholderdeliver on behalf of the Equityholders any amendment, consent or waiver under this Agreement and the other Transaction Documents, to assert, and authorize to agree to resolution of, all claims and disputes hereunder or thereunder, including under Section 2.09 and Article 9 hereof, to retain legal counsel and other professional services, at the expense of the Equityholders, in connection with the performance by the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by of this Agreement and the Escrow Agreementother Transaction Documents, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give execute and receive all notices required to be given to deliver on the Equityholders’ Representative under behalf all documents and instruments which may be executed and delivered pursuant to this AgreementAgreement and the other Transaction Documents, to make and receive notices and other communications pursuant to this Agreement and the Escrow other Transaction Documents and service of process in any Action arising out of or related to this Agreement and the other Transaction Documents, to negotiate, settle or compromise any Action arising out of or related to this Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent other Transaction Documents or any of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant transactions hereunder or thereunder, including to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions action (or determine not to take action) in connection with the defense, prosecution, settlement, compromise or other resolution of any dispute relating claim for indemnification pursuant to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwiseArticle 9, and take to do each and every act and exercise all rights that are either (x) necessary or forego any or all actions permitted or required of any Equityholder or necessary appropriate in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, or (viy) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by mandated or on behalf of the Equityholders permitted by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Transaction Documents. The Equityholders’ Representative shall not be authorized use reasonable efforts to keep the Advisory Committee (1) receive notice of, or take action on behalf of the applicable Indemnifying Party as defined in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the certain engagement agreement by and among Equityholders’ Representative shall have no obligation and certain Equityholders) reasonably informed with respect to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations actions of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 authority granted to have been directly caused by the gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement which actions have a material impact on the amounts payable to the Equityholders. For the avoidance of doubt, none of the provisions of this Section 10.01 shall serve to authorize, appoint or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by empower the Equityholders’ Representative in connection with as the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights representative or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights exclusive agent of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted with respect to the Equityholders’ Representative Group hereunder: Support Agreements (i) are coupled or with an interest and shall be irrevocable and survive the deathrespect to any rights, incompetence, bankruptcy obligations or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (ii) rely upon any signature believed by it actions to be genuine, and (iii) reasonably assume that a signatory has proper authorization to sign on behalf of the applicable Equityholder or other partytaken thereunder). (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.

Appears in 1 contract

Sources: Agreement and Plan of Merger (Signify Health, Inc.)

Equityholders’ Representative. (a) The Equityholders, by By virtue of the approval and adoption of this Agreement by the Required Stockholder Vote and the delivery of the Written Consent and Support Agreement, and without any further action of any Equityholder, each Equityholder shall be deemed to have irrevocably constituted and appointed Shareholder Representative Services LLC (which, by execution of the Equityholders or the Companythis Agreement, hereby appoint accepts such appointment) to act as the Equityholders’ Representative and as the sole representative, agent and attorney in attorney-in-fact for and on behalf of the Company Equityholders (in their capacity as such), with full power of substitution to take all actions on behalf of the Equityholders in connection with this Agreement and each Equityholderthe agreements ancillary hereto, and authorize the Equityholders’ Representative including (i) to take all action necessary to consummate execute and deliver on behalf of the Merger and the other transactions contemplated by Equityholders any amendment, consent or waiver under this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIIITransaction Documents, (ii) to give assert, and receive to agree to resolution of, all notices required to be given to the Equityholders’ Representative claims and disputes hereunder or thereunder, including under this AgreementSection 2.10, the Escrow Agreement or the Stockholder Related AgreementsSection 2.14 and ‎Article 10 hereof, (iii) to reviewretain legal counsel and other professional services, negotiate and authorize delivery to Parent at the expense of the General Escrow Property Equityholders, in connection with the performance by the Equityholders’ Representative of this Agreement and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6other Transaction Documents, (iv) object to such claims execute and deliver on the Equityholders’ behalf all documents and instruments which may be executed and delivered pursuant to this AgreementAgreement and the other Transaction Documents, (v) consent to make and receive notices and other communications pursuant to this Agreement and the other Transaction Documents and service of process in any Action arising out of or agree torelated to this Agreement and the other Transaction Documents, (vi) to negotiate, enter intosettle or compromise any Action arising out of or related to this Agreement or the other Transaction Documents or any of the transactions hereunder or thereunder, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, including to take any actions action (or determine not to take action) in connection with the defense, prosecution, settlement, compromise or other resolution of any dispute relating claim for indemnification pursuant to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwiseArticle 10, and take (vii) to do each and every act and exercise all rights that are either (x) necessary or forego any or all actions permitted or required of any Equityholder or necessary appropriate in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, or (viy) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by mandated or on behalf of the Equityholders permitted by the terms of this Agreement or the Escrow Agreementother Transaction Documents. Payment by or on behalf of Parent or Purchaser to the Payments Administrator in accordance with this Agreement shall be in full satisfaction of the obligations of Parent, includingPurchaser and their respective Affiliates with respect to such payment. (b) The Equityholders’ Representative may resign at any time. The power of attorney granted in this Section 10.09 is coupled with an interest and is irrevocable, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that may be delegated by the Equityholders’ Representative and shall not survive the death or incapacity of each Equityholder. Such agency may be authorized to (1) receive notice of, or take action on behalf changed by the Equityholders having a majority in interest of the applicable Indemnifying Party Pro Rata Share of all Equityholders (excluding for such purposes the Dissenting Shares from the calculation of each Equityholder’s Pro Rata Share) as of such time (including in the event of the resignation, death, disability or other incapacity of an Equityholders’ Representative that recourse is being sought hereunder directly from an individual), and, following the provision of notice to Parent and Purchaser, the newly appointed representative shall be the Equityholders’ Representative for all purposes hereunder, and any such Indemnifying Partysuccessor shall succeed the Equityholders’ Representative as the Equityholders’ Representative hereunder. Neither the removal of, (2) agree to make any Indemnifying Party directly liable for any Losses in respect nor the appointment of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoingsuccessor to, the Equityholders’ Representative shall have no obligation affect in any manner the validity or enforceability of any actions taken or agreements, understandings or commitments entered into by the prior Equityholders’ Representative, which shall continue to act be effective and binding on behalf the Equityholders. For the avoidance of doubt, any compromise or settlement of any matter by the Equityholders’ Representative hereunder shall be binding on, and fully enforceable against, all Equityholders. No bond shall be required of the Equityholders’ Representative. (c) A decision, except as expressly provided herein and in the Escrow Agreementact, the Engagement Agreement, and for purposes of clarity, there are no obligations consent or instruction of the Equityholders’ Representative in any ancillary agreementhereunder shall constitute a decision, scheduleact, exhibit consent or instruction of all of the Disclosure Schedule. The Person serving as Equityholders and shall be final, binding and conclusive upon each of the Equityholders’ Representative , and the Escrow Agent, Parent, Purchaser, Merger Sub and, after the Effective Time, the Surviving Corporation, may be removed rely upon any such decision, act, consent or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal instruction of the Equityholders’ Representative as being the decision, act, consent or instruction of each and every such Equityholder. The Parent Indemnified Parties are hereby relieved from any Liability to any Person for any acts done by them in accordance with any such decision, act, consent or instruction of the Equityholders’ Representative. Each Equityholder hereby agrees that for any Action arising under this Agreement or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject Transaction Document such Equityholder may be served legal process by registered mail to the Limits on Authority, all decisions and actions taken address set forth in Section 12.01 for the Equityholders’ Representative (or any alternative address designated to the parties in writing by the Equityholders’ Representative Representative), and that service in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, such manner shall be binding upon all of the Equityholders adequate and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest not assert any defense of claim that service in such manner was not adequate or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to sufficient in any court in any jurisdiction. Each Equityholder shall promptly provide direction written notice to the Equityholders’ Representative in connection with its services under this Agreementof any change of address of such Equityholder. (d) Without limiting the generality of the foregoing and for the avoidance of doubt, the Escrow Agreement and the Engagement Agreement (such Equityholdersfor purposes of ‎Article 10, including their individual representatives, collectively hereinafter referred to if any Equityholder Indemnified Party is seeking indemnification as the “Advisory Group”). Neither the Equityholders’ Representative nor its membersIndemnified Party hereunder, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless indemnification is sought against any damageEquityholder as an Indemnifying Party hereunder, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “Representative Losses”)then, in each case as either 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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermorecase, the Equityholders’ Representative shall not be required to take any action unless act on behalf of, and receive notice on behalf of, such Equityholder; provided, that for the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authorityavoidance of doubt, the Equityholders’ Representative shall have full power and authority on behalf is not responsible for payment of each Equityholder to take any and all actions on behalf of, execute indemnity amounts owed by any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements)Equityholder. (e) The Equityholders’ Representative, by approval solely in its capacity as the representative of the Sellers, represents and adoption warrants to Parent, Purchaser and Merger Sub, as of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), thatdate hereof as follows: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative is a Colorado limited liability company duly organized, validly existing and in good standing under the laws of Colorado, and has all requisite limited liability company power and authority required to carry on its business in all material respects as to currently conducted; (Aii) the settlement execution and delivery of any claims for indemnification this Agreement by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claimsthe Equityholders’ Representative, and (C) any other actions required or permitted to be taken the performance by the Equityholders’ Representative under this Agreementof its obligations hereunder, have been duly authorized by all necessary limited liability company action on the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions part of the Equityholders’ Representative; (iiiii) all actions, decisions this Agreement has been duly executed and instructions delivered by the Equityholders’ Representative and this Agreement constitutes a legally valid and binding obligation of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action Representative, enforceable against the Equityholders’ Representative for any action takenin accordance with its terms (subject to applicable bankruptcy, decision made or instruction given by the Equityholdersinsolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditorsRepresentative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions rights generally and general principles of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement equity and the Stockholder Related Agreementslaws of agency); and (iv) the provisions execution and delivery of this Article IX the Transaction Documents to which it is (or will be) a party by the Equityholders’ Representative, and all actions taken the performance by the Equityholders’ Representative under this Agreement, the Escrow Agreement of its obligations thereunder do not conflict with or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified result in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights a violation of the Equityholders under this Agreement, whether pursuant to testamentary disposition, organizational documents of the laws of descent and distribution or otherwiseEquityholders’ Representative. (f) The powersEach Equityholder, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation by its acceptance of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder its share of the whole or any fraction of hisMerger Consideration payable at Closing hereunder, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (ii) rely upon any signature believed by it accepts and agrees to be genuine, and (iii) reasonably assume that a signatory has proper authorization to sign on behalf of the applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined bound by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had provisions set forth in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in this Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system10.09.

Appears in 1 contract

Sources: Agreement and Plan of Merger (Communications Sales & Leasing, Inc.)

Equityholders’ Representative. (a) The By virtue of the Designated Approvals, and without further action on the part of parties hereto or the Equityholders, by the approval Equityholders’ Representative is hereby appointed the attorney-in-fact and adoption agent of each Equityholder, with full power of substitution to act in the name, place and stead of such Equityholder in accordance with the terms of this Agreement and without any the other Transaction Documents, and to do or refrain from doing all such further action of any of the Equityholders or the Companyacts and things, hereby appoint and to execute all such documents, as the Equityholders’ Representative as agent shall deem necessary or appropriate in conjunction with the Transactions, including the power: (i) to negotiate, execute and attorney deliver (A) the other Transaction Documents and (B) all ancillary agreements, certificates, statements, notices, approvals, extensions, waivers, undertakings, amendments and other documents required or permitted to be given in fact connection with the consummation of the Transactions; (ii) to collect and receive any amounts due or paid for the Company benefit of such Equityholder and each to disburse or cause to be disbursed such amounts to such Equityholder pursuant to the terms of the Operating Agreement; (iii) on behalf of such Equityholder, and authorize to initiate, pursue, defend or settle any disputes with Buyer (or its Affiliates) under this Agreement or the other Transaction Documents, or otherwise arising in connection with the Transactions; (iv) to determine the Final Merger Consideration in accordance with Section 3.10(b); (v) to cause to be paid from the Adjustment Escrow Funds, in accordance with the terms of Section 3.10(c), any amounts due arising out of the adjustment provisions set forth in Section 3.10(c); (vi) notwithstanding anything to the contrary herein, to make any equitable adjustment to the Allocable Proceeds that it, in its sole discretion, acting in good faith, deems reasonably necessary or advisable, subject to the terms of the Operating Agreement; (vii) to take all actions under this Agreement or the other Transaction Documents expressly contemplated to be taken by the Equityholders’ Representative or the Equityholders; and (iviii) to take all action necessary to consummate the Merger and actions under this Agreement or the other transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders Transaction Documents that may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises ofEquityholders, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve to do or refrain from doing any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, further act or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment deed on behalf of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of or the Equityholders and (vii) that the Equityholders’ Representative deems necessary or appropriate in its sole discretion relating to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms subject matter of this Agreement or and the Escrow Agreement, including, without limitation regarding other Transaction Documents. (Ab) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the The Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses act taken or omitted by it as permitted under this Agreement, except if such act is taken or omitted in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party bad faith or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”)by willful misconduct. Notwithstanding the foregoing, the The Equityholders’ Representative shall have no obligation to act on behalf of the Equityholdersalso be fully protected in relying upon any written notice, except as expressly provided herein and in the Escrow Agreementdemand, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit certificate or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced document from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may that it in good faith believes to be required to indemnify Parent pursuant to Article VIII and genuine (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the sameincluding electronic copies thereof). (c) Certain The Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with shall, severally but not jointly, indemnify the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreementfor, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against against, any damage, loss, cost, liability, fees liability or expenses (including fees, disbursements and costs expense incurred without bad faith or willful misconduct on the part of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and Representative, arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s carrying out its duties under or in connection with this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermoreother Transaction Documents, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect including costs and expenses of successfully defending the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the any claim of liability with respect thereto. The Equityholders’ Representative may consult with counsel and other advisors of its own choice and shall have full and complete authorization and protection for any action taken by it in performing good faith and in accordance with the opinion of such actionscounsel or other advisors, as applicable. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions All of the Equityholders’ Representative as indemnities, immunities and powers granted to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or shall survive the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith Pre-Closing Period. (e) Any and all reasonable out-of-pocket costs and expenses incurred by the Equityholders’ Representative shall be paid from the Equityholders’ Representative Expense Funds. In the event that any amount is owed by the Equityholders’ Representative, whether for fees, costs, expense reimbursement or otherwise, in excess of the Equityholders’ Representative Expense Funds (or after any or all of the Equityholders’ Representative Expense Funds have been dispersed to the Equityholders and the PIP Holders), the Equityholders’ Representative shall be entitled to be reimbursed by the Equityholders and the PIP Holders based on their Allocable Share of any such reimbursement obligation. As soon as reasonably practicable following a determination by the Equityholders’ Representative, in its sole discretion, that the Equityholders’ Representative is not reasonably likely to incur further costs or expenses in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement other Transaction Documents or the Transactions, the Equityholders’ Representative shall pay or cause to be paid to the Paying Agent (for the benefit of, and further payment to, the Stockholder Related Agreements; and Equityholders) and to the Company Surviving Company or a subsidiary thereof (iv) for the provisions benefit of, and further payment through payroll to, subject to Section 3.11, the PIP Holders), in accordance with an updated version of this Article IX and all actions taken the Distribution Schedule (a copy of which shall be promptly provided by the Equityholders’ Representative under this Agreementto Buyer), the Escrow Agreement or the Engagement Agreement shall be binding upon the executorsby wire transfer of immediately available funds, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified an aggregate amount in writing by cash equal to any such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwiseremaining Equityholders’ Representative Expense Funds. (f) The powers, immunities and rights If BSR LLC becomes unable to indemnification granted to serve as the Equityholders’ Representative Group hereunder: (i) are coupled with an Representative, such other Person or Persons as may be designated by vote or consent of a majority in interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole Equityholders (based on the portion of equity interests of the Company such Persons held, directly or any fraction of hisindirectly, her or its interest in immediately prior to the General Escrow FundCompany Effective Time), shall succeed BSR LLC as the Equityholders’ Representative. (g) The Equityholders’ Representative Buyer Parties, and any other third Person, shall be entitled to: (i) rely upon the Closing Spreadsheet, (ii) to rely upon any signature believed by it to be genuineaction or decision of, and (iii) reasonably assume that a signatory has proper authorization to sign on behalf of the applicable Equityholder or instruction by, or any document or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheldpaper delivered by, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to on behalf of the Equityholders in accordance with (without any obligation to inquire into the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with authority of the Equityholders’ Representative to facilitate or the payment of any portion genuineness or correctness of such payment that is payable document or other paper or any signature of the Equityholders’ Representative), including any update to the Distribution Schedule or the Allocation Schedule, and, without limiting the foregoing, the Buyer Parties (and following the Closing, the Blockercos, the Company Optionholders who are current and the Subsidiaries) shall not be liable to any Equityholder (i) for any action taken or former employees omitted to be taken by any Buyer Party in such reliance or with respect to actions, decisions and subject to Tax withholding through Parent’s determinations of the Equityholders’ Representative or its Affiliate’s payroll system(ii) for any action or omission of the Equityholders’ Representative, whether or not in accordance with this Agreement or the other Transaction Documents.

Appears in 1 contract

Sources: Merger Agreement (Crown Castle International Corp)

Equityholders’ Representative. (a) The Equityholders, by Appointment. By virtue of the approval and adoption of this Agreement by the Company’s stockholders, and without any further action of any Equityholder, each Equityholder shall be deemed to have irrevocably constituted and appointed Project Renegade LLC, (and by execution of this Agreement such Person hereby accepts such appointment) to act as the Equityholders Representative under this Agreement in accordance with the terms of this Section 10.1 and the Escrow Agreement and (ii) the Equityholders Representative as exclusive agent and attorney-in-fact for and on behalf of the Equityholders or (in their capacity as such), with full power of substitution, to act in the Companyname, hereby appoint the Equityholders’ Representative as agent place and attorney in fact for the Company and stead of each EquityholderEquityholder with respect to Section 2.7, and authorize the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement Section 6.2, Section 6.8, Article IX and the Escrow AgreementAgreement and to facilitate the consummation of the transactions contemplated hereby, or including the defense and/or settlement taking by the Equityholders Representative of any claims for which and all actions and the making of any decisions required or permitted to be taken by the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to the Equityholders’ Representative under this AgreementSection 2.7, Section 6.2, Section 6.8, Article IX, the Escrow Agreement or the Stockholder Related Agreements, Equityholders Representative Engagement Agreement (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of it being understood that the Equityholders and (vii) shall have no right to make decisions pursue any claim on behalf of any Company Indemnified Party in respect of the Equityholders rights granted to Company Indemnified Parties under Section 6.6) and take any and all additional action as is contemplated to be taken by or accept on behalf of the Equityholders by the terms each Equityholder service of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims process and Notices of Direct Claims and (B) amendments any notices required to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that be served on the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Equityholders Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein herein, in the Escrow Agreement and in the Escrow Agreement, the Equityholders Representative Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Equityholders Representative in any ancillary agreement, schedule, exhibit or the Company Disclosure Schedule. The Person serving as All such actions shall be deemed to be facts ascertainable outside the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of on the Equityholders and each such Equityholder’s their successors as if expressly confirmed and ratified in writing by such Equityholder, as a matter of contract Law and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities all defenses which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject available to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each any Equityholder to take any and all actions on behalf ofcontest, execute any and all instruments on behalf of, and execute negate or waive any and all rights of, disaffirm the action of the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad good faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Equityholders Representative Engagement Agreement shall be binding upon are waived. The power of attorney and the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Equityholders Representative Group hereunderin this Section 10.1: (i) are coupled with an interest and are irrevocable, may be delegated by the Equityholders Representative and shall be irrevocable and survive the death, incompetence, bankruptcy death or liquidation incapacity of any each Equityholder and shall be binding on any successor thereto, and (ii) and shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) . The Equityholders’ Equityholders Representative may resign at any time, and such agency may be changed by the holders of a majority in interest of the Escrow Fund from time to time, and any such successor shall be entitled to: (i) rely upon succeed the Equityholders Representative as Equityholders Representative hereunder. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders Representative and the Closing Spreadsheet, (ii) rely upon and/or any signature believed by it to be genuine, termination of this Agreement and (iii) reasonably assume that a signatory has proper authorization to sign on behalf of the applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement. For the avoidance of doubt, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined compromise or settlement of any matter by the Advisory GroupEquityholders Representative hereunder shall be binding on, and fully enforceable against, all Equityholders. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not No bond shall be liable for any loss of principal required of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemRepresentative.

Appears in 1 contract

Sources: Merger Agreement (Nextgen Healthcare, Inc.)

Equityholders’ Representative. (a) The Effective upon and by virtue of the vote of the Shareholders approving and adopting this Agreement and the Merger, and without any further act of any of the Indemnitors, the Equityholders, ’ Representative shall be hereby appointed as the representative of the Indemnitors and as the attorney-in-fact and agent for and on behalf of each Indemnitor with respect to (i) any claims by any Indemnified Party against the approval Escrow Fund under Articles 2 and adoption 11 of this Agreement and without (ii) any further action of any of amendments to the Equityholders or the Company, hereby appoint the Escrow Agreement. The Equityholders’ Representative as agent and attorney in fact for the Company and each Equityholder, and authorize the hereby accepts such appointment. The Equityholders’ Representative (i) shall have the authority to take any and all action necessary to consummate the Merger actions and the other transactions contemplated by this Agreement and the Escrow Agreement, make any decisions required or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required permitted to be given to taken by the Equityholders’ Representative under the Escrow Agreement and this Agreement, including the Escrow Agreement or exercise of the Stockholder Related Agreements, power to (iii) to review, negotiate and authorize delivery to Parent the payment of all or any part of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6Amount, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, into settlements and compromises of, and commence any suit, action or proceeding, demand arbitration of, and comply with Orders orders of courts and or awards of arbitrators with respect to, such claims, resolve claims by any such claims, take any actions in connection with Indemnified Party against the resolution Escrow Fund under Articles 2 and 11 of any dispute relating to this Agreement, (v) arbitrate, litigate, resolve, settle or compromise any dispute that may arise pursuant to the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, Escrow Agreement and (vi) take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the foregoing. The Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall will have no obligation sole authority and power to act on behalf of each Indemnitor with respect to the Equityholdersdisposition, except as expressly provided herein and in settlement or other handling of all claims against the Escrow Agreement, the Engagement Agreement, Fund under this Agreement and for purposes of clarity, there are no all related rights or obligations of the Indemnitors arising under this Agreement. The Equityholders’ Representative in will also have sole authority and power to act on behalf of each Indemnitor with respect to any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time amendments to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject In all matters relating to the Limits on Authoritydisposition, settlement or other handling of claims against the Escrow Fund under this Agreement or any amendments to the Escrow Agreement, the Equityholders’ Representative (or his or her successor) shall be the only party entitled to assert the rights of the Indemnitors. A decision, act, consent or instruction of the Equityholders’ Representative hereunder shall constitute a decision, act, consent or instruction of all decisions Indemnitors and actions taken shall be final, binding and conclusive upon each of such Indemnitors, and the Escrow Agent and Parent may rely upon any such decision, act, consent or instruction of the Equityholders’ Representative as being the decision, act, consent or instruction of each and every Indemnitor. The Escrow Agent and Parent shall be relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent or instruction of the Equityholders’ Representative. (c) The Equityholders’ Representative shall have the right to recover from the Escrow Fund his reasonable out-of-pocket expenses (the “Equityholders’ Representative’s Expenses”), prior to any distribution to the Indemnitors, but after any disbursement from the Escrow Fund to any Indemnified Party and the Escrow Agent pursuant to the terms and conditions of the Escrow Agreement; provided, however, that the Equityholders’ Representative shall have the right to recover from the Escrow Fund Equityholders’ Representative’s Expenses in an aggregate amount of up to $100,000 prior to any distribution to the Indemnitors and prior to any disbursement from the Escrow Fund to any Indemnified Party and the Escrow Agent. The Equityholders’ Representative’s Expenses will be paid to the Equityholders’ Representative from the Escrow Fund promptly following delivery by the Equityholders’ Representative to the Escrow Agent of a written request for payment of such Equityholders’ Representative’s Expenses (which written request shall include reasonable documentation to support such Equityholders’ Representative’s Expenses). In the event the Escrow Fund is insufficient to satisfy the Equityholders’ Representative’s Expenses, then each Indemnitor will be obligated to pay a pro rata portion of the Equityholders’ Representative’s Expenses in accordance excess of the Escrow Fund. (d) The Equityholders’ Representative will incur no liability with this Article IXrespect to any action taken or suffered by any party in reliance upon any notice, including without limitation direction, instruction, consent, statement or other document believed by such Equityholders’ Representative to be genuine and to have been signed by the proper person (iand shall have no responsibility to determine the authenticity thereof), nor for any other action or inaction, except his or her own gross negligence, bad faith or willful misconduct. (e) agreements between The Indemnitors shall severally but not jointly indemnify the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, costliability or expense incurred without gross negligence, liabilitybad faith or willful misconduct, fees or expenses (including feesto the extent permitted by Applicable Law, disbursements and costs on the part of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreementhereunder, including the Escrow Agreement reasonable fees and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative. (f) At any time during the term of the Escrow Agreement, a majority-in-interest of holders of any amounts then held in the Escrow Fund may, by written consent, appoint a new representative as the Equityholders’ Representative will reimburse Representative. Notice together with a copy of the Equityholders written consent appointing such new representative and bearing the amount signatures of such indemnified Representative Loss holders of a majority-in-interest of those holders must be delivered to Parent and the extent attributable Escrow Agent not less than ten (10) calendar days prior to such gross negligence, willful misconduct or bad faithappointment. If not paid directly to Such appointment will be effective upon the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution later of the General date indicated in the consent or the date such consent is received by Parent and the Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to Agent. (g) In the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge event that the Equityholders’ Representative shall not be required becomes unable or unwilling to expend continue in his or risk its own funds capacity as Equityholders’ Representative, or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, if the Equityholders’ Representative shall not be required to take any action unless the resigns as a Equityholders’ Representative has been provided with fundsRepresentative, security or indemnities which, a majority-in-interest of the holders of any amounts then held in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The EquityholdersFund may, by approval and adoption of this Agreementwritten consent, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative appoint a new representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions . Notice and instructions a copy of the Equityholders’ Representative taken in accordance with this Article IX shall written consent appointing such new representative and bearing the signatures of the holders of a majority-in-interest of such holders must be conclusive delivered to Parent and binding the Escrow Agent. Such appointment will be effective upon the Company and all later of the Equityholders and no Equityholder shall have any cause of action against date indicated in the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement consent or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith date such consent is received by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent Parent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwiseAgent. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.

Appears in 1 contract

Sources: Merger Agreement (Affymetrix Inc)

Equityholders’ Representative. (a) The As of the date hereof, Fortis Advisors LLC, a Delaware limited liability company, shall be and hereby is constituted and appointed as the Equityholders’ Representative and as the true and lawful attorney-in-fact and exclusive agent under this Agreement, by the approval Paying Agent Agreement and adoption the Escrow Agreement, with full and exclusive power and authority on the behalf of each Holder to (i) consummate the Transactions in accordance with the terms and conditions set forth in this Agreement and the Escrow Agreement, (ii) pay each such Holder’s allocable share of expenses (whether incurred on or after the date hereof) incurred in connection with the negotiation and performance of this Agreement and the Escrow Agreement, (iii) receive, give receipt of and disburse any funds received hereunder or under the Escrow Agreement on behalf of or to each such Holder, (iv) hold back from disbursement to all of the Holders collectively any such funds to the extent it reasonably determines may be necessary or required under the terms and conditions of this Agreement or Law (including with respect to the payment of each Holder’s expenses in accordance with clause (ii)), (v) execute and deliver on behalf of each such Holder all documents contemplated herein or in the Escrow Agreement, and any amendment or waiver hereto or thereto, (vi) give and receive notices on behalf of the Holders collectively, (vii) give any written direction to the Escrow Agent or Paying Agent and (viii) take any action it deems necessary, advisable or appropriate in respect of any claim (including settlement thereof) made by any Parent Indemnified Party, or to be made on behalf of the Seller Indemnified Parties against Parent, for indemnification pursuant to Article X, (ix) pursue a claim for indemnification under Section 10.3 and take any action it deems necessary, advisable or appropriate in respect of any such claim (including settlement thereof). Each of the Holders, by accepting the consideration payable to it hereunder and without any further action of any of the Equityholders Holders or the Company, hereby appoint irrevocably appoints the Equityholders’ Representative to be its attorney-in-fact and exclusive agent under this Agreement, the Paying Agent Agreement and the Escrow Agreement and grants unto said attorney-in-fact full power and authority (a) to do and perform each and every act and thing necessary or required to be done in connection with the Transactions as agent fully to all intents and attorney purposes as such Holders might or could do in fact for person (including all of the Company and each Equityholderactions described more fully above), and authorize (b) to do or refrain from doing any further act or deed on behalf of the Holders which the Equityholders’ Representative (i) deems necessary or appropriate in its sole discretion relating to take all action necessary to consummate the Merger and subject matter of this Agreement, the other transactions contemplated by this Paying Agent Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, and (iic) to give do all things and receive to perform all notices required to be given to acts, as contemplated by or deemed advisable by the Equityholders’ Representative under in connection with this Agreement, the Paying Agent Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Engagement Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the EquityholdersHolders, except as expressly provided herein herein, in the Paying Agent Agreement, in the Escrow Agreement and in the Escrow Agreement, the Equityholders’ Representative Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any other ancillary agreement, schedule, exhibit or the Company Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to timepowers, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Holder and shall be binding on any successor thereto, and (ii) shall survive the resignation delivery of an assignment by any Holder of the whole or removal any fraction of his, her or its interest in any escrow or other funds in which such Holder may have an interest. (b) All decisions, actions, consents and instructions of the Equityholders’ Representative authorized to be made, taken or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent given pursuant to Article VIII and (iiSection 11.17(a) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be final and binding upon all the Holders and all of the Equityholders and each such Equityholder’s their successors as if expressly confirmed and ratified in writing by each such EquityholderHolder, and no Equityholder Holder shall have the and each hereby waives any right to object, dissent, protest or otherwise contest the same. (c) same taken in good faith. Certain Equityholders Holders have entered into an engagement agreement (the “Equityholders’ Representative Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Paying Agent Agreement, the Escrow Agreement and the Equityholders’ Representative Engagement Agreement (such EquityholdersHolders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have incur any liability or obligation to any of the parties to this Agreement or to the Equityholders Holder for any action or failure to act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties responsibilities hereunder, under this the Paying Agent Agreement, under the Escrow Agreement and or under the Equityholders’ Representative Engagement Agreement (collectively, except and only to the “Representative Losses”), in each case as such Representative Loss is suffered extent of actions or incurred, provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the gross negligence, omissions constituting willful misconduct or bad faith gross negligence of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwisein connection therewith. The Equityholders Holders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Paying Agent Agreement, the Escrow Agreement, the Equityholders’ Representative Engagement Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided by the Holders with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the . The Equityholders’ Representative shall not have full power and authority on behalf by reason of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for frauda fiduciary relationship in respect of any Holder. The Equityholders’ Representative shall not be required to make any inquiry concerning either the performance or observance of any of the terms, gross negligence, willful misconduct provisions or bad faith conditions of this Agreement or the Escrow Agreement. (c) The Holders shall be bound by all actions taken and documents executed by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Company Documents, and Parent and the other Parent Related Agreements; and (iv) Parties shall be entitled to rely on any action or decision of the provisions of this Article IX and all actions taken by Equityholders’ Representative. Notices or communications to or from the Equityholders’ Representative under this Agreement, the Escrow Agreement shall constitute notice to or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of from each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) Holders. The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing SpreadsheetHolder Payment Schedule, (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 applicable Equityholder Holder or other party. (hd) In the event that the Equityholders’ Representative becomes unable to perform the Equityholders’ Representative’s responsibilities or resigns from such position, the Holders that held, immediately prior to the Closing, a majority of the issued and outstanding shares of Common Stock of the Company shall select another representative to fill such vacancy and such substituted representative shall (i) be deemed to be the Equityholders’ Representative for all purposes of this Agreement and the Escrow Agreement and (ii) exercise the rights and powers of, and be entitled to the indemnity, reimbursement and other benefits of, the Equityholders’ Representative. (e) By accepting the consideration payable to them hereunder, the Holders agree, severally (and not jointly and severally) on a pro rata basis (in accordance with the sum of each of the respective amounts payable to them as set forth on (i) the Final Closing Statement and (ii) any updated versions of Holder Payment Schedule prepared by the Equityholders’ Representative in accordance with Section 11.17(g) as of the time of determination) to indemnify the Equityholders’ Representative Group for, and to defend and hold the Equityholders’ Representative Group harmless from and against, any and all losses, liabilities, claims, damages, 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 paid in settlement (collectively, the “Administrative Expenses”) incurred without willful misconduct or gross negligence on the part of the Equityholders’ Representative, arising out of or in connection with the acceptance or administration of its duties hereunder, under the Paying Agent Agreement, under the Escrow Agreement or under the Equityholders’ Representative Engagement Agreement or the Equityholders’ Representative’s carrying out its duties under Section 3.12(e) or Section 11.17(g). The Equityholders’ Representative may consult with counsel of its own choice and will have full and complete authorization and protection for any action taken and suffered by it in good faith upon the opinion of such counsel. Such Administrative Expenses may be recovered first, from the Equityholders’ Representative Expense Account, second, from any distribution of amounts otherwise distributable to the Holders at the time of distribution, and third, directly from the Holders. The immunity and indemnity rights under this Section 11.17 shall survive the resignation, replacement or removal of the Equityholders’ Representative or any member of the Advisory Group and/or the termination of this Agreement, the Paying Agent Agreement or the Escrow Agreement. (f) The Equityholders’ Representative Expense Fund will Amount shall be deposited by Parent into the Equityholders’ Representative Expense Account. The Equityholders’ Representative Expense Amount shall be held by the Equityholders’ Representative in the Equityholders’ Representative Expense Account and shall be used (i) for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses Administrative Expenses incurred pursuant to this Agreement, the Escrow Paying Agent Agreement, the Escrow Agreement or any Equityholders’ Representative Engagement Agreement and any agreement ancillary hereto and Agreement, or (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable shall have no responsibility or liability for any loss of principal of the Equityholders’ Representative Expense Fund Account other than as a result of its negligence, gross negligence or willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcymisconduct. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Equityholders’ Representative Expense Fund, Account and has no tax reporting or income distribution obligations. As promptly The Holders will not receive any interest on the Equityholders’ Representative Expense Account and assign to the Equityholders’ Representative any such interest. Subject to Advisory Group approval, the Equityholders’ Representative may contribute funds to the Equityholders’ Representative Expense Account from any consideration otherwise distributable to the Holders. (g) The Equityholders’ Representative may release at any time, in its sole discretion, all or any portion of the Equityholders’ Representative Expense Account to the Paying Agent and/or the Surviving Company, as applicable, for further distribution to the Holders and shall so release the remaining Equityholders’ Representative Expense Account (if any) as soon as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination determined by the Equityholders’ Representative that the Equityholders’ Representative Expense Fund Account is no longer required to be withheld, withheld If the Equityholders’ Representative decides to release any portion of the Equityholders’ Representative Expense Amount pursuant to this Section 11.17(g), Equityholders’ Representative shall deliver(i) prepare and deliver to the Advisory Group an updated Holder Payment Schedule, or cause which shall include the amount of each Holder’s (other than a Holder of Dissenting Shares in respect of such Dissenting Shares) Pro Rata Percentage of the portion of the Equityholders’ Representative Expense Amount, to be deliveredreleased, and (ii) release all or such portion of the Equityholders’ Representative Expense Amount less the employer portion of any payroll Taxes imposed with respect to such amount remaining in payable to the Expense Fund holders of Company Options and the EBU Holders, as applicable, to the Paying Agent or the Escrow Agent, as applicable, for further distribution as follows: (x) twenty percent (20%) of the applicable amount to the Equityholders EBU Holders based on the applicable percentage opposite such EBU Holder’s name on the Holder Payment Schedule under the heading “Unitas Holdings Corp. EBU Ownership Ledger” and (y) eighty percent (80%) of the applicable amount to the Holders (other than a Holder of Dissenting Shares in respect of such Dissenting Shares) based on the percentage of the aggregate amount of the Closing Stock Consideration and Closing Option Payments that the applicable Holder became entitled to receive at the Effective Time; provided that any amounts payable to holders of Company Options or to the EBU Holders shall be paid to the Surviving Corporation, and the employer portion of any payroll Taxes imposed with respect to such amount payable to the holders of Company Options and the EBU Holders shall be released to the Surviving Corporation (and the Surviving Corporation shall use such increased amount to pay such payroll Taxes), and Parent shall cause the Surviving Corporation to pay all such amounts payable to the holders of Company Options in accordance with the allocations provided mechanics described in Section 1.13(b3.3 and payable to the EBU Holders in accordance with terms of the applicable governing documents and, in any event, at or about the same time as payments are made to the other Holders (other than a Holder of Dissenting Shares in respect of such Dissenting Shares), provided, that Parent shall reasonably cooperate with . (h) The Equityholders’ Representative represents and warrants to each other party hereto that: (i) the Equityholders’ Representative (A) is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and (B) has the requisite right, limited liability company power, authority and legal capacity to facilitate execute, deliver and perform this Agreement; (ii) the payment execution, delivery and performance of this Agreement by the Equityholders’ Representative (A) has been duly and validly authorized by all necessary action of the Equityholders’ Representative, its managers, directors, members, partners, officers or equityholders (as applicable) and (B) does not conflict with the organizational documents of the Equityholders’ Representative or conflict with or result in the breach of, or constitute a default under, any portion Contract to which the Equityholders’ Representative is bound; and (iii) this Agreement is a legal, valid and binding obligation of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or the Equityholders’ Representative, enforceable against it in accordance with its Affiliate’s payroll systemterms.

Appears in 1 contract

Sources: Merger Agreement (Vroom, Inc.)

Equityholders’ Representative. (a) The Equityholders, by executing and delivering this Agreement to Purchaser, hereby irrevocably appoint Davi▇ ▇▇▇▇▇▇ ▇▇ their agent to act on their behalf for purposes of the approval and adoption specific provisions of this Agreement and without any further action of any of the Equityholders or the Company, hereby appoint the Equityholders’ Representative as agent and attorney in fact for the Company and each Equityholder, and authorize the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as involving the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all All actions, decisions decisions, and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders Equityholders, and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made made, or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement Agreement, except for fraud, gross negligencebad faith, or willful misconduct breach of this Agreement by the Equityholders’ Representative. (b) Purchaser shall be entitled to deal exclusively with the Equityholders’ Representative with respect to any actions required or bad faith permitted to be taken under this Agreement by the Equityholders’ Representative, and shall be entitled to rely conclusively (without further evidence of any kind whatsoever) on any document executed or purported to be executed on behalf of any Equityholder by the Equityholders’ Representative in connection with respect to any actions required or permitted to be taken by the matters described in Equityholders’ Representative under this Article IX; (iii) Agreement. Purchaser shall also be entitled to rely conclusively on the provisions instructions and decisions given or made by, and on any other actions taken or purported to be taken on behalf of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreementby, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all Equityholders’ Representative with respect to any actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, including the Escrow Agreement settlement of any claims for indemnification by Purchaser pursuant to ARTICLE VIII. (c) In the event that the Equityholders’ Representative dies, becomes unable to perform his responsibilities hereunder, or resigns from such position, the Engagement Agreement Equityholders holding, immediately prior to the Closing, a majority of the Equity (excluding any Equity held by the Equityholders’ Representative or his successors) are authorized to and shall select another representative to fill such vacancy and such substituted representative shall be deemed to be the Equityholders’ Representative for purposes of this Agreement. (d) In all questions arising under this Agreement, the Equityholders’ Representative may rely on the advice of legal counsel, and the Equityholders’ Representative shall not be liable to any Person for anything done, omitted, or suffered in good faith by the Equityholders’ Representative based on such advice. (e) The Equityholders shall, jointly and severally, indemnify the Equityholders’ Representative and hold him harmless against any loss, liability, or expense incurred by him without willful misconduct on the part of the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of his duties hereunder, including the reasonable fees and expenses of any legal counsel (or other advisor) retained by the Equityholders’ Representative. (f) The provisions of this Section 9.1 shall be binding upon the executors, heirs, legal Representativesrepresentatives, personal Representativesrepresentatives, successor trustees trustees, and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.

Appears in 1 contract

Sources: Stock Purchase Agreement (Viemed Healthcare, Inc.)

Equityholders’ Representative. (a) The Equityholders, by By the approval and adoption of the Merger, and by receiving the benefits thereof, including any consideration payable hereunder, each Equityholder shall be deemed to have approved Shareholder Representative Services LLC as the agent, representative, proxy and attorney-in-fact for each of the Equityholders to act as Equityholders' Representative as of Closing for all purposes in connection with this Agreement and without any further action agreements ancillary hereto. (b) Equityholders' Representative is hereby authorized by each Equityholder to act for and on behalf of such Equityholder for all purposes in connection with this Agreement and any of the Equityholders or the Companyrelated agreements, hereby appoint the Equityholders’ Representative as agent and attorney in fact for the Company and each Equityholder, and authorize the Equityholders’ Representative including to: (i) to take all action necessary to consummate the Merger actions required by, and the other transactions contemplated by exercise all rights granted to, Equityholders' Representative in this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, Transaction Documents; (ii) to give and receive all notices required or other documents given or to be given to the Equityholders’ Representative under this Agreement, the Escrow Agreement Equityholders by Buyer or the Stockholder Related Agreements, Company pursuant to this Agreement and the other Transaction Documents; (iii) to review, negotiate receive and authorize delivery to Parent accept service of legal process in connection with any Action against the General Escrow Property and Equityholders or the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, Company arising under this Agreement or any Transaction Document; (iv) object to such claims pursuant to this Agreementundertake, (v) consent or agree tocompromise, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises ofsettle, and demand arbitration and comply deal in any way with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, Action or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions indemnity claim hereunder on behalf of the Equityholders and take as a group or any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of Equityholder arising under this Agreement or the Escrow Agreement, including, without limitation regarding any Transaction Document; (Av) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims execute and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act deliver on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations or any of the Equityholders, all agreements, certificates and documents required or deemed appropriate by the Equityholders' Representative in connection with any ancillary agreementof the transactions contemplated hereby or under the other Transaction Documents, schedulewhether before, exhibit at, or after Closing hereunder; (vi) engage special counsel, accountants and other advisors and incur such other expenses in connection with any of the Disclosure Schedule. The Person serving transactions contemplated hereby or under the other Transaction Documents whether before, at, or after Closing hereunder; (vii) consent to the settlement of any disputes in connection with Section 1.6 of this Agreement; and (viii) take such other action as the Equityholders' Representative may be removed or replaced from time to timedeem appropriate, including: (A) agreeing on behalf of the Equityholders, or if any of the Equityholders, to any waiver, modification or amendment of this Agreement or any Transaction Document and executing and delivering an agreement of such Person resigns from its position waiver, modification or amendment; and (B) all such other matters as the Equityholders’ Representative, then a successor ' Representative may be appointed, by deem necessary or appropriate to carry out the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities intent and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination purposes of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the sameTransaction Documents. (c) Certain Equityholders have entered into an engagement agreement (Buyer and its Affiliates and the “Engagement Agreement”) with Escrow Agent will be entitled to rely upon, and will be fully protected in relying upon, the power and authority of the Equityholders' Representative without independent investigation. Buyer and its Affiliates and the Escrow Agent will have no liability whatsoever to provide the Equityholders or any other Persons for any acts or omissions of the Equityholders' Representative, or any acts or omissions taken or not taken by Buyer or any other Persons at the direction of the Equityholders' Representative. (d) Except as otherwise indicated by the Equityholders' Representative in writing to Buyer, after the Closing, a decision, act, consent or instruction of the Equityholders' Representative relating to this Agreement and the other Transaction Documents will constitute a decision for all of the Equityholders, and will be final, binding and conclusive upon the Equityholders, and Buyer may rely upon any such decision, act, consent or instruction of the Equityholders' Representative as being the decision, act, consent or instruction of every Equityholder and Buyer will have no liability to any Equityholder as a result of such reliance; provided that, upon payment by Buyer of any amount required to be paid by Buyer to Equityholders' Representative (on behalf of the Equityholders) under this Agreement or the other Transaction Documents, Buyer will have no further obligations or liabilities to the Equityholders' Representative or any Equityholder with respect to such payment, and such Equityholder hereby waives any and all claims against Buyer with respect to such payment and agrees to indemnify and hold harmless Buyer for any claims made by such Equityholder with respect to such payment. (e) The Equityholders' Representative will incur no liability in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties pursuant to this Agreement or and any related agreements except to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without extent resulting from its gross negligence or willful misconduct, and in the exercise of reasonable judgment, and . The Equityholders' Representative shall not be liable for any act done action or omitted omission pursuant to the advice of counsel shall counsel. The Equityholders' Representative may act in reliance upon any written instrument or signature received by it and reasonably believed to be conclusive evidence of such good faithgenuine and/or properly executed. The Equityholders shall severally and not jointly indemnify and defend the Equityholders' Representative Group and hold the Equityholders’ Representative Group harmless against any damagereasonable, lossdocumented, costand out-of-pocket losses, liability, fees or liabilities and expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement"Representative Losses") incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “Representative Losses”)any related agreements, 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 gross negligence, negligence or willful misconduct or bad faith of the Equityholders' Representative, the Equityholders' Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, negligence or willful misconduct or bad faithmisconduct. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders' Representative first from (i) the funds in the Equityholders' Representative Expense Fund, Fund and second, from (ii) any distribution of other funds that become payable to the General Escrow Fund, Designated Escrow Fund or Milestone Payment Equityholders under this Agreement at such time as such amounts would otherwise be distributable to the Equityholders at the time of distributionEquityholders; provided, that while this section allows the Equityholders' Representative to may be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may beaforementioned sources of funds, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent . In no event will the Equityholders' Representative from seeking any remedies available be required to it at law advance its own funds on behalf of the Equityholders or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability Notwithstanding anything in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits contrary, any restrictions or limitations on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf liability or indemnification obligations of, execute any and all instruments on behalf of, and execute or waive any and all rights ofprovisions limiting the recourse against non-parties otherwise applicable to, the Equityholders under set forth elsewhere in this AgreementAgreement are not intended to be applicable to the indemnities provided to the Equityholders' Representative hereunder. The foregoing indemnities will survive the Closing, the Escrow Agreement and resignation or removal of the Stockholder Related Agreements (other than Equityholders' Representative or the Non-Competition Agreements). (e) The Equityholders, by approval and adoption termination of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powersAt the Closing, immunities and rights to indemnification granted Buyer shall deliver to the Equityholders' Representative Group hereunder: an amount equal to the Equityholders' Representative Expense Fund Amount (ithe "Equityholders' Representative Expense Fund") are coupled to be held to cover and reimburse the fees and expenses incurred by the Equityholders' Representative for its obligations in connection with an interest and shall be irrevocable and survive the deathTransaction Documents, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor theretothe transactions contemplated thereby, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Grouprelated agreements. The Equityholders will not receive any interest or earnings on the Equityholders' Representative Expense Fund and irrevocably transfer and assign to the Equityholders' Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ ' Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting As soon as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by completion of the Equityholders’ Representative that the Expense Fund is no longer required to be withheld' Representative's responsibilities, the Equityholders' Representative shall deliver, or cause to be delivered, will deliver any remaining balance of the amount remaining in the Equityholders' Representative Expense Fund to the Paying Agent, Agent for further distribution to the Equityholders. For tax purposes, the Equityholders' Representative Expense Fund will be treated as having been received and voluntarily set aside by the Equityholders in accordance with at the allocations provided in Section 1.13(btime of Closing. (g) If the Equityholders' Representative shall resign or be removed by the Equityholders, the Equityholders shall (by consent of those Persons entitled to at least a majority of the Merger Consideration), providedwithin 10 days after such resignation or removal, that Parent shall reasonably cooperate with appoint a successor to the Equityholders' Representative. Any such successor shall succeed the former Equityholders' Representative to facilitate as the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemEquityholders' Representative hereunder.

Appears in 1 contract

Sources: Merger Agreement (Paymentus Holdings, Inc.)

Equityholders’ Representative. (a) The By the execution and delivery of this Agreement, including counterparts hereof, each Seller hereby irrevocably constitutes and appoints ▇▇▇▇ ▇▇▇▇▇▇▇▇ as the true and lawful agent and attorney-in-fact (the “Equityholders’ Representative”) of such Seller with full powers of substitution to act in the name, by place and stead of such Seller with respect to the approval performance on behalf of such Seller under the terms and adoption provisions of this Agreement and without any the Escrow Agreement, as the same may be from time to time amended, and to do or refrain from doing all such further action of any of the Equityholders or the Companyacts and things, hereby appoint and to execute all such documents on such Seller’s behalf, as the Equityholders’ Representative shall deem necessary or appropriate in connection with any of the transactions contemplated under this Agreement or the Escrow Agreement, including: (i) to receive all payments (A) made by Purchaser to such Seller under this Agreement and (B) required to be made to such Seller upon release of the funds held in the Indemnification Escrow Account; (ii) to agree upon or compromise any matter related to the calculation of any adjustments to the Initial Purchase Price pursuant to Section 2.3 or otherwise or to other payments to be made; (iii) to act for such Seller with respect to all indemnification matters referred to in this Agreement and the Escrow Agreement, including the right to compromise on behalf of such Seller any indemnification claim made by or against such Seller; (iv) to act for such Seller with respect to all post-Closing matters; (v) to terminate, amend, or waive any provision of this Agreement and the Escrow Agreement in accordance with Section 12.6 and Section 12.7 hereof, as agent applicable (and attorney Section 12 of the Escrow Agreement); (vi) to employ and obtain the advice of legal counsel, accountants and other professional advisors as the Equityholders’ Representative, in fact for his, her or its sole discretion, deems necessary or advisable in the Company and each Equityholderperformance of his, and authorize her or its duties as the Equityholders’ Representative and to rely on their advice and counsel; (ivii) to take all action necessary incur and pay out of the Initial Purchase Price and/or any subsequent payments due to consummate such Seller (including, without limitation, out of payments due to such Seller upon release of the Merger and funds held in the other Indemnification Escrow Account) (1) expenses in connection with the transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement including fees of any claims for which the Equityholders may be required to indemnify Parent or brokers, attorneys and accountants, and any other fees and expenses allocable or in any way relating to such transactions or (2) any indemnification claim made by any of the Purchaser Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to Parties or by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, whether such expenses, fees or indemnification claims are incurred prior or subsequent to Closing; (vviii) consent to retain a portion of the Initial Purchase Price and/or any subsequent payments due to such Seller as a reserve against the payment of expenses incurred in his capacity as Equityholders’ Representative; and (ix) to do or agree to, negotiate, enter into, or, if applicable, contest, prosecute refrain from doing any further act or defend, settlements and compromises of, and demand arbitration and comply with Orders deed on behalf of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions Seller which the Equityholders’ Representative deems necessary or appropriate in connection with the resolution of any dispute his sole discretion relating to the subject matter of this Agreement, Agreement and the Escrow Agreement (including amending or the transactions contemplated by this Agreement, by arbitration, settlement waiving any term or otherwise, provision hereof or thereof) as fully and take or forego completely as any or all actions permitted or required of any Equityholder or necessary in the judgment such Seller could do if personally present and acting. (b) The appointment of the Equityholders’ Representative shall be deemed coupled with an interest and shall be irrevocable, and any other person may conclusively and absolutely rely, without inquiry, upon any actions of the Equityholders’ Representative as the acts of the Sellers in all matters referred to in this Agreement and the Escrow Agreement. Each of the Sellers hereby ratifies and confirms all that the Equityholders’ Representative shall do or cause to be done by virtue of the appointment of the Equityholders’ Representative as Equityholders’ Representative of such Seller. The Equityholders’ Representative shall act for the accomplishment of the foregoing and Sellers on all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of matters set forth in this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or in the Stockholder Related Agreements (other than manner the Non-Competition Agreements)Equityholders’ Representative believes to be in the best interest of the Sellers, provided that but the Equityholders’ Representative shall not be authorized responsible to (1) receive notice of, any such Seller for any loss or take action on behalf damage any such Seller may suffer by reason of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, performance by the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of his duties under this Agreement and the Escrow Agreement. (b) Subject to , other than loss or damage arising from willful misconduct in the Limits on Authority, all decisions and actions taken by performance of such duties. In no event shall the Equityholders’ Representative be liable hereunder or in accordance with this Article IXconnection herewith for any indirect, including without limitation (i) agreements between the punitive, exemplary, special, incidental or consequential damages. The Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding fully protected against the Sellers in relying upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified any written notice, demand, certificate or document that he in writing by such Equityholdergood faith believes to be genuine, and no Equityholder shall have the right to object, dissent, protest including facsimiles or otherwise contest the samecopies thereof. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement Each Seller hereby expressly acknowledges and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge agrees that the Equityholders’ Representative shall not be required is authorized to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority act on behalf of each Equityholder to take such Seller notwithstanding any and all actions on behalf of, execute any and all instruments on behalf ofdispute or disagreement among the Sellers, and execute or waive that any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent Person shall be entitled to rely conclusively on the instructions any and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be all action taken by the Equityholders’ Representative under this AgreementAgreement without liability to, or obligation to inquire of, any of the Escrow Agreement and any Stockholder Related Agreement (other than Sellers. The Equityholders’ Representative may be removed from time to time by the Non-Competition Agreements)Sellers that held at least a majority of the Equity Interests immediately prior to the Closing, and no Equityholder shall have any cause the Equityholders’ Representative may resign by giving written notice to the Sellers and the Purchaser. If the Equityholders’ Representative is so removed, dies, becomes disabled, resigns or otherwise is unable to fulfill his responsibilities as agent of action against Parent for any action taken by Parent the Sellers, or there is a vacancy in reliance upon the instructions or decisions position of the Equityholders’ Representative; (ii) all actions, decisions and instructions then the Sellers that held a majority of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon Equity Interests immediately prior to the Company and all of the Equityholders and no Equityholder shall have any Closing shall, within ten (10) Business Days after such removal, death, disability, resignation or other cause of action against such vacancy, appoint a successor representative reasonably satisfactory to Purchaser. Any successor shall become the Equityholders’ Representative for any action takenpurposes of the Escrow Agreement and this Agreement, decision made or instruction given and each successor Equityholders’ Representative shall have all of the power, authority, rights and privileges conferred by this Agreement upon the original Equityholders’ Representative. No bond shall be required of the Equityholders’ Representative, and the Equityholders’ Representative shall not receive any compensation for its services. The Sellers do hereby jointly and severally agree to indemnify and hold the Equityholders’ Representative harmless from and against any and all liability, loss, cost, damage or expense (including without limitation reasonable attorneys’ fees) reasonably incurred or suffered as a result of the performance of such Equityholders’ Representative’s duties under this Agreement or and the Escrow Agreement except for fraud, gross negligence, any such liability arising out of the willful misconduct or bad faith by of the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the Representative. The provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement Section 12.2 shall be binding upon the executors, heirs, legal Representativesrepresentatives, personal Representativesrepresentatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholderof the Sellers, and any reference references in this Agreement or the Escrow Agreement Section 12.2 to an Equityholder or the Equityholders a Seller shall mean and include the successors to the rights of the Equityholders under this AgreementSellers hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers. All of the indemnities, immunities immunities, releases and rights to indemnification powers granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) under this Agreement shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow FundClosing. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.

Appears in 1 contract

Sources: Equity Purchase Agreement

Equityholders’ Representative. (a) Each of the Equityholders hereby constitutes and irrevocably appoints, effective from and after the date hereof, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as such Equityholder’s agent and attorney-in-fact (in such capacity, the “Equityholders’ Representative”), with full power of substitution to act as Equityholders’ Representative on behalf of the Equityholders to the extent and in the manner set forth in this Agreement. In the event of the resignation of the Equityholders’ Representative, a successor Equityholders’ Representative reasonably satisfactory to Buyer shall thereafter be appointed by an instrument in writing signed by Buyer, each of the Equityholders and such successor Equityholders’ Representative. (b) The Equityholders’ Representative is hereby authorized and empowered to act for, by and on behalf of, any or all of the approval and adoption Equityholders (with full power of substitution in the premises) in connection with (i) the purchase price adjustment set forth in Section 2.4, (ii) the termination of this Agreement as set forth in Section 8.1 and (iii) such other matters as are reasonably necessary for the consummation of the Contemplated Transactions including, without limitation, (A) to direct or receive all payments owing to the Equityholders under this Agreement, (B) to withhold any further action amounts received on behalf of the Equityholders in order to satisfy any actual or potential liabilities of the Equityholders under this Agreement, (C) to make any payments on behalf of the Equityholders and collect from the Equityholders (in accordance with each Equityholder’s Applicable Portion) any amounts paid in settlement of any claims under this Agreement, (D) authorize the delivery or release to Buyer of funds held in the Adjustment Escrow Account and the Indemnity Escrow Account, (E) to terminate, amend, waive any provision of, or abandon, this Agreement or any of the Ancillary Documents, (F) to act as the representative of the Equityholders to review and authorize all claims and disputes or question the accuracy thereof, (G) to negotiate and compromise on their behalf with Buyer any claims asserted hereunder and to authorize payments to be made with respect thereto, (H) to distribute any payments to Equityholders as contemplated by this Agreement, (I) to take such further actions as are authorized in this Agreement or the CompanyAncillary Documents, hereby appoint and (J) in general, do all things and perform all acts, including, without limitation, executing and delivering all agreements (including the Ancillary Documents), certificates, receipts, consents, elections, instructions and other documents contemplated by or deemed by the Equityholders’ Representative to be necessary or desirable in connection with this Agreement, the Ancillary Documents and the Contemplated Transactions. Buyer shall be entitled to rely on such appointment and to treat the Equityholders’ Representative as agent and attorney in the duly appointed attorney-in-fact for the Company and of each Equityholder, and authorize the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be . Notices given to the Equityholders’ Representative in accordance with the provisions of this Agreement shall constitute notice to the Equityholders for all purposes under this Agreement, the Escrow Agreement . The Equityholders’ Representative shall not have any duties or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property responsibilities except those expressly set forth in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, and no implied covenants, agreements, functions, duties, responsibilities, obligations or liabilities shall be read into this Agreement or shall otherwise exist against the Equityholders’ Representative. (vc) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment The appointment of the Equityholders’ Representative is an agency coupled with an interest and is irrevocable and any action taken by the Equityholders’ Representative pursuant to the authority set forth in this Section 10.1 shall be effective and absolutely binding on each Equityholder notwithstanding any contrary action of or direction from such Equityholder, except for actions or omissions of the Equityholders’ Representative constituting intentional fraud. The death or incapacity, or dissolution or other termination of existence, of any Equityholder shall not terminate the authority and agency of the Equityholders’ Representative. Buyer and any other Party to an Ancillary Document in dealing with the Equityholders’ Representative may conclusively rely, without inquiry, upon any act of the Equityholders’ Representative as the act of the Equityholders. (d) Each Equityholder hereby releases the Equityholders’ Representative from, and each Equityholder agrees to indemnify the Equityholders’ Representative against, liability for any action taken or not taken by the Equityholders’ Representative in its capacity as such (including the expenses referred to in Section 10.1(e) hereof), except for the accomplishment liability of the foregoing and all Equityholders’ Representative to an Equityholder for loss which such Equityholder may suffer from the willful misconduct or gross negligence of the Equityholders’ Representative in carrying out its duties hereunder or under the Ancillary Documents. The Equityholders’ Representative shall not be liable to any Equityholder or to any other termsPerson, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) respect to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated taken or omitted to be taken by the Equityholders’ Representative in its role as Equityholders’ Representative under or on behalf of the Equityholders by the terms of in connection with this Agreement or any Ancillary Document, unless such action or omission results from or arises out of intentional fraud or willful misconduct on the Escrow Agreementpart of the Equityholders’ Representative, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized liable to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party any Equityholder in the event that recourse is being sought hereunder directly from such Indemnifying Partythat, (2) agree to make any Indemnifying Party directly liable for any Losses in respect the exercise of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoingits reasonable judgment, the Equityholders’ Representative shall have no obligation believes there will not be adequate resources available to act on behalf of cover potential costs and expenses to contest a claim made by Buyer against the Equityholders, except as expressly provided herein . Buyer acknowledges and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of agrees that the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person is a Party to this Agreement solely for purposes of serving as the “Equityholders’ Representative” and that no claim shall be brought by or on behalf of Buyer against the Equityholders’ Representative may be removed with respect to this Agreement, any Ancillary Document or replaced from time to time, the Contemplated Transactions (it being understood that any covenant or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, agreement that requires performance by the holders of “Parties” or a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ “Party” at or prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject shall not be deemed to the Limits on Authority, all decisions and actions taken require performance by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between unless performance by the Equityholders’ Representative is expressly provided for in such covenant or agreement). (e) The Equityholders’ Representative shall receive no compensation for service as such but shall receive reimbursement from, and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between indemnified from, the Equityholders’ Representative and Parent relating to Expense Amount, by the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article IEquityholders, shall be binding upon all of the Equityholders and in accordance with each such Equityholder’s successors as if expressly confirmed Applicable Portion, for any and ratified in writing by such Equityholderall expenses, charges and no Equityholder shall have the right to objectliabilities, dissentincluding, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholdersbut not limited to, reasonable attorneysRepresentative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group fees (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “Representative LossesExpenses”), 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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, performance or discharge of its duties set forth in this Section 10.1. If the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions amount of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by Expense Amount is less than the Equityholders’ Representative under this AgreementExpenses, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements)each Equityholder hereby agrees to pay, and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actionspay, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive amount equal to the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes product of (i) paying directly or reimbursing such Equityholder’s Applicable Portion, times (ii) the difference between (x) the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto Expenses and (iiy) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemAmount.

Appears in 1 contract

Sources: Securities Purchase Agreement (Kirby Corp)

Equityholders’ Representative. (a) The Equityholders, by By virtue of the approval and adoption of this Agreement and the delivery of the Written Consent, and without any further action of any Equityholder, each Equityholder shall be deemed to have irrevocably constituted and appointed Fortis Advisors LLC (which, by execution of the Equityholders or the Companythis Agreement, hereby appoint accepts such appointment) as the Equityholders’ Representative and as the sole representative, exclusive agent and attorney in attorney-in-fact for and on behalf of the Company Equityholders (in their capacity as such), with full power of substitution, to take all actions on behalf of the Equityholders in connection with this Agreement and each Equityholderthe agreements ancillary hereto, and authorize the Equityholders’ Representative including (i) to take all action necessary to consummate execute and deliver on behalf of the Merger and the other transactions contemplated by Equityholders any amendment, consent or waiver under this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIIITransaction Documents, (ii) to give assert, and receive to agree to resolution of, all notices required to be given to the Equityholders’ Representative claims and disputes hereunder or thereunder, including under this Agreement, the Escrow Agreement or the Stockholder Related AgreementsSection 3.14 and Article 11, (iii) to reviewretain legal counsel and other professional services, negotiate and authorize delivery to Parent at the expense of the General Escrow Property Equityholders, in connection with the performance by the Equityholders’ Representative of this Agreement and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6other Transaction Documents, (iv) object to such claims execute and deliver on the Equityholders’ behalf all documents and instruments which may be executed and delivered pursuant to this AgreementAgreement and the other Transaction Documents, (v) consent to make and receive notices and other communications pursuant to this Agreement and the other Transaction Documents and service of process in any Action arising out of or agree torelated to this Agreement and the other Transaction Documents, (vi) to negotiate, enter intosettle or compromise any Action arising out of or related to this Agreement or the other Transaction Documents or any of the transactions hereunder or thereunder, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, including to take any actions action (or determine not to take action) in connection with the defense, prosecution, settlement, compromise or other resolution of any dispute relating claim hereunder (including any claim for indemnification pursuant to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwiseArticle 11), and take (vii) to do each and every act and exercise all rights that are either (x) necessary or forego any or all actions permitted or required of any Equityholder or necessary appropriate in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, or (viy) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by mandated or on behalf of the Equityholders permitted by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices other Transaction Documents. The Equityholders’ Representative shall use commercially reasonable efforts to keep the Advisory Group reasonably informed with respect to actions of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative pursuant to the authority granted to the Equityholders’ Representative under this Agreement which actions have a material impact on the amounts payable to or the obligations of the Equityholders. The Equityholders’ Representative shall not be authorized entitled to: (i) rely upon any signature believed by it to be genuine and (1iii) receive notice of, or take action reasonably assume that a signatory has proper authorization to sign on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party Equityholder or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”)other party. Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein in this Agreement, in the Exchange Agent Agreement and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Engagement Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement The power of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described attorney granted in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement 12 and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: , (i) are coupled with an interest and is irrevocable, may be delegated by the Equityholders’ Representative and shall be irrevocable and survive the death, incompetence, bankruptcy death or liquidation incapacity of any each Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) Holdback Deferred Initial Amount and the Holdback Indemnity Initial Amount. The Equityholders’ Representative may resign at any time or such agency may be changed by the Equityholders entitled to receive a majority of the Merger Consideration (including in the event of the resignation, death, disability or other incapacity of an Equityholders’ Representative that is an individual), and, following the provision of notice to Parent, the newly appointed representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreementall purposes hereunder, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to such successor shall succeed the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The as the Equityholders’ Representative is not providing any investment supervisionhereunder; provided, recommendations or advice and will not be liable for any loss that if no successor Equityholders’ Representative has been designated prior to the effective date of principal of such resignation, the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available provide an updated Allocation Schedule to its creditors in Parent at the event time of bankruptcysuch resignation. The Equityholders’ Representative is not acting as Neither the removal of, nor the appointment of a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheldsuccessor to, the Equityholders’ Representative shall deliveraffect in any manner the validity or enforceability of any actions taken or agreements, understandings or cause commitments entered into by the prior Equityholders’ Representative, which shall continue to be delivered, effective and binding on the amount remaining Equityholders. The immunities and rights to indemnification in this Article 12 shall survive the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with resignation or removal of the Equityholders’ Representative to facilitate or any member of the payment Advisory Group and the Closing Date and/or any termination of this Agreement. For the avoidance of doubt, any compromise or settlement of any portion matter by the Equityholders’ Representative hereunder shall be binding on, and fully enforceable against, all Equityholders. No bond shall be required of the Equityholders’ Representative. (c) A decision, act, consent or instruction of the Equityholders’ Representative hereunder shall constitute a decision, act, consent or instruction of all of the Equityholders and shall be final, binding and conclusive upon each of the Equityholders and their respective successors, and all defenses which may be available to any Equityholder to contest, negate or disaffirm the action of the Equityholders’ Representative taken in good faith under this Agreement, the Exchange Agent Agreement or the Equityholders’ Representative Engagement Agreement are waived. The Exchange Agent, the Parent Parties and, after the Second Merger Effective Time, the Surviving Company, may rely upon any such decision, act, consent or instruction of the Equityholders’ Representative as being the decision, act, consent or instruction of each and every such Equityholder. The Parent Indemnified Parties are hereby relieved from any Liability to any Person for any acts done by them in accordance with any such decision, act, consent or instruction of the Equityholders’ Representative. Each Equityholder hereby agrees that for any Action arising under this Agreement or any other Transaction Document such Equityholder may be served legal process by registered mail to the address set forth in Section 14.01 for the Equityholders’ Representative (or any alternative address designated to the parties in writing by the Equityholders’ Representative), and that service in such manner shall be adequate and such Equityholder shall not assert any defense of claim that service in such manner was not adequate or sufficient in any court in any jurisdiction. Each Equityholder shall promptly provide written notice to the Equityholders’ Representative of any change of address of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemEquityholder.

Appears in 1 contract

Sources: Merger Agreement (Galaxy Digital Holdings Ltd.)

Equityholders’ Representative. (a) The Equityholders, by the approval and By virtue of their adoption of this Agreement and without any further action of any their approval of the Equityholders principal terms of the Merger, effective only upon the Effective Time, the Company Stockholders have approved ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (such person and any successor or successors being the Company“Equityholders’ Representative”) to act as the initial representative of the Equityholders, hereby appoint and the Equityholders’ Representative as agent and attorney in fact for the Company and each Equityholder, and authorize the Equityholders’ Representative (i) shall be authorized to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions act on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, including with respect to any claims (including the settlement thereof) made by a Parent Indemnified Party for indemnification pursuant to Article X and with respect to any actions to be taken by the Equityholders’ Representative pursuant to the terms of the Escrow Agreement (including, without limitation, the exercise of the power to (i) authorize a payment of the Escrow Fund to a Parent Indemnified Party, (ii) negotiate, enter into settlements and any Stockholder Related Agreement (other than the Non-Competition Agreements)compromises of, and no Equityholder comply with orders of courts with respect to any claims for indemnification and (iii) take all actions necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing). In all matters relating to Article X, the Equityholders’ Representative shall have any cause be the only party entitled to assert the rights of action against the Company Stockholders, and the Equityholders’ Representative shall perform all of the obligations of the Company Stockholders hereunder. The Parent for any action taken by Parent in reliance upon the instructions or Indemnified Parties shall be entitled to rely on all statements, representations and decisions of the Equityholders’ Representative; . The Equityholders’ Representative shall not be entitled to amend this Agreement or take any actions relating to this Agreement prior to the Effective Time. The Equityholders’ Representative may resign upon not less than twenty (ii20) all actions, decisions business days’ prior written notice to Parent and instructions the Equityholders. The Equityholders who are entitled to receive a majority-in-interest of the Escrow Fund may remove the Equityholders’ Representative from time to time upon not less than twenty (20) business days’ prior written notice to Parent. Any vacancy in the position of the Equityholders’ Representative taken in accordance with this Article IX shall may be conclusive and binding upon filled by the Company and all approval of the holders of the Equityholders who are entitled to receive a majority-in-interest of the Escrow Fund. Any successor Equityholders’ Representative shall acknowledge in writing to Parent his, her or its acceptance of his, her or its appointment and no Equityholder shall have any cause obligations as Equityholders’ Representative. If following the removal of action against the Equityholders’ Representative a successor Equityholders’ Representative has not been appointed within thirty (30) business days from a request by Parent, Parent shall have the right to appoint an Equityholders’ Representative to fill any vacancy. (b) The Equityholders shall be bound by all actions taken by the Equityholders’ Representative in his, her or its capacity thereof, except for any action takenthat conflicts with the limitations set forth in subsection (d) below. The Equityholders’ Representative shall promptly, decision made or instruction given and in any event within ten (10) business days, provide written notice to the Equityholders of any action taken on behalf of them by the Equityholders’ Representative pursuant to the authority delegated to the Equityholders’ Representative under this Agreement Section 11.01. The Equityholders’ Representative shall at all times act in his, her or its capacity as Equityholders’ Representative in a manner that the Escrow Agreement Equityholders’ Representative believes to be in the best interest of the Equityholders. Neither the Equityholders’ Representative nor any of its directors, officers, agents or employees, if any, shall be liable to any person for any error of judgment, or any action taken, suffered or omitted to be taken under the Transaction Documents, except for fraudin the case of his, her or its gross negligence, willful misconduct or bad faith or willful misconduct. The Equityholders’ Representative may consult with legal counsel, independent public accountants and other experts selected by him, her or it. The Equityholders’ Representative 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 the Transaction Documents. As to any matters not expressly provided for in the Transaction Documents, the Equityholders’ Representative shall not exercise any discretion or take any action. (c) The Equityholders’ Representative acknowledges and agrees that all information, documents and records disclosed by Parent or the Surviving Corporation pursuant to Section 6.07 or Section 2.04 (collectively, the “Confidential Information”) to the Equityholders’ Representative, Observer or Independent Accounting Firm is confidential and proprietary to Parent and/or the Surviving Corporation, as applicable. The Equityholders’ Representative shall not, and shall use its reasonable efforts to cause the Observer and Independent Accounting Firm not to, use any such Confidential Information for any purpose other than as expressly contemplated pursuant hereto. The Equityholders’ Representative shall not, and shall use its reasonable efforts to cause the Observer and Independent Accounting Firm not to, disclose or provide any such Confidential Information to any third person or party and to take all reasonably necessary measures to prevent any such disclosure. (d) At the Closing, Parent shall deposit with the Equityholders’ Representative an initial amount equal to $100,000 (the “Reserve Account”) and the Equityholders’ Representative shall be entitled to apply such amounts held in the Reserve Account against all of the Equityholders’ Representative’s and Observer’s fees, costs and expenses as expressly set forth herein. The Equityholders’ Representative shall have the right to deposit additional amounts into the Reserve Account from any Merger Consideration received by the Equityholders’ Representative for distribution to the Equityholders and to apply such additional amounts held in the Reserve Account against any additional fees, costs and expenses as expressly set forth herein incurred by the Equityholders’ Representative and the Observer. The Equityholders’ Representative shall have the right to recover (i) normal and customary fees for services rendered by the Equityholders’ Representative (which, in the case of the initial Equityholders’ Representative, shall be $2,000 per month during the period beginning on the Closing Date and ending on the first anniversary of the Closing Date, $1,500 per month during the period beginning on the first anniversary of the Closing Date and ending on the second anniversary of the Closing Date and $1,000 per month thereafter) and all reasonable out-of-pocket costs and expenses incurred by the Equityholders’ Representative in connection with the matters described performance of his, her or its duties under this Agreement and the Transaction Documents and (ii) all fees and expenses due and payable to the Observer pursuant to Section 6.07(c) hereof, from either the Escrow Fund immediately prior to the distribution of any amounts in this Article IX; (iii) the provisions Escrow Fund to the Equityholders, to the extent such amounts are available for distribution, the Reserve Account or from any Merger Consideration received by the Equityholders’ Representative for distribution to the Equityholders. The Equityholders’ Representative may also seek advances from the Equityholders for the reasonable out-of-pocket costs and expenses that the Equityholders’ Representative anticipates incurring on behalf of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have the Equityholders in connection with any Third Party Action or otherwise. Each Equityholder shall, severally and not jointly, hold harmless and reimburse the transactions contemplated by this Agreement, the Escrow Agreement Equityholders’ Representative from and the Stockholder Related Agreements; and (iv) the provisions against such Equityholders’ ratable share of this Article IX any and all actions liabilities, losses, damages, claims, costs or expenses suffered or incurred by the Equityholders’ Representative arising out of or resulting from any action taken or omitted to be taken by the Equityholders’ Representative under this Agreementthe Transaction Documents, other than such liabilities, losses, damages, claims, costs or expenses (including the Escrow Agreement reasonable fees and expenses of any legal counsel retained by the Equityholders’ Representative) arising out of or resulting from the Engagement Agreement Equityholders’ Representative’s gross negligence, bad faith or willful misconduct; provided, however, that no such Equityholder shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors liable in excess of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights ’s pro rata portion of the Equityholders aggregate Merger Consideration. The Equityholders’ Representative and Observer shall have the right to withdraw funds from the Reserve Account to recover any fees and reasonable expenses incurred in connection with their respective duties under this Agreement, whether . In the event there are any remaining funds in the Escrow Account to be distributed to Equityholders immediately prior to the final distribution from the Escrow Account pursuant to testamentary dispositionthe Escrow Agreement, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and the Observer shall be irrevocable entitled to recover any fees and survive reasonable out-of-pocket expenses incurred by the deathEquityholders’ Representative and the Observer in connection with the performance of their respective duties under this Agreement and the Transaction Documents from the Escrow Account prior to the distribution of funds to the Equityholders. In addition, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (ii) rely upon to offset against any signature believed by it to be genuine, and (iii) reasonably assume that a signatory has proper authorization to sign on behalf of the applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination Merger Consideration received by the Equityholders’ Representative that the Expense Fund is no longer required to amount of any such fees and expenses not recovered in the manner provided above. Upon the expiration of the Earn Out Period, any remaining funds in the Reserve Account shall be withheld, distributed by the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with Schedule 2.01(d). (e) Notwithstanding anything to the allocations provided contrary herein or in Section 1.13(b)the Escrow Agreement, provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment is not authorized to, and shall not, accept on behalf of any portion Equityholder any Merger Consideration to which such Equityholder is entitled under this Agreement and the Equityholders’ Representative shall not in any manner exercise, or seek to exercise, any voting power whatsoever with respect to shares of capital stock of the Company now or hereafter owned of record or beneficially by any Equityholder unless the Equityholders’ Representative is expressly authorized to do so in a writing signed by such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemStockholder.

Appears in 1 contract

Sources: Merger Agreement (Mgi Pharma Inc)

Equityholders’ Representative. (a) The Equityholders, by Appointment. By virtue of the approval and adoption of this Agreement by the Company’s stockholders, and without any further action of any Equityholder, each Equityholder shall be deemed to have irrevocably constituted and appointed ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (and by execution of this Agreement such Person hereby accepts such appointment) to act as the Equityholders or Representative under this Agreement in accordance with the Company, hereby appoint terms of this Section 10.1 and (ii) the Equityholders’ Equityholders Representative as agent and attorney in attorney-in-fact for the Company and each Equityholder, and authorize the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders (in their capacity as such), with full power of substitution, to act in the name, place and take stead of each Equityholder with respect to Section 2.7, Section 2.8, Section 6.2, Section 6.8, Article IX and to facilitate the consummation of the transactions contemplated hereby, including the taking by the Equityholders Representative of any and all additional action as is contemplated actions and the making of any decisions required or permitted to be taken by or the Equityholders Representative under Section 2.7, Section 2.8, Section 6.2, Section 6.8, Article IX (it being understood that the Equityholders shall have no right to pursue any claim on behalf of any Company Indemnified Party in respect of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (Arights granted to Company Indemnified Parties under Section 6.6) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action accept on behalf of each Equityholder service of process and any notices required to be served on the applicable Indemnifying Party in Equityholders. All such actions shall be deemed to be facts ascertainable outside the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of Agreement and shall be binding on the Equityholders in as a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf matter of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedulecontract Law. The Person serving as the Equityholders’ Representative power of attorney granted in this Section 10.1 is coupled with an interest and is irrevocable, may be removed delegated by the Equityholders Representative and shall survive the death or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor incapacity of each Equityholder. Such agency may be appointed, changed by the holders of a majority in interest of the aggregate value Company Common Stock as of property then held in Closing. For the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal avoidance of the Equityholders’ Representative or doubt, any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense compromise or settlement of claims for which any matter by the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, hereunder shall be binding upon on, and fully enforceable against, all Equityholders. No bond shall be required of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such EquityholderRepresentative, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders Representative shall receive no compensation for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faithhis services. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damagemay designate another Person, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement upon whose instruction Parent and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent Surviving Company shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative rely, without any investigation or inquiry, as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions having been taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be not taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all authority of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwiseRepresentative. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.

Appears in 1 contract

Sources: Merger Agreement (Turnstone Biologics Corp.)

Equityholders’ Representative. (a) The EquityholdersIn order to efficiently administer the transactions contemplated hereby, including the defense and/or settlement of any claims for which the Indemnifying Equityholders may be required to indemnify Zipcar and/or the Surviving Corporation pursuant to Article VI hereof, the Company Shareholders, by the approval and adoption of this Agreement and without any further action of any in consideration of the Equityholders or receipt of the CompanyMerger Shares, hereby appoint designate Alps as the representative of the Indemnifying Equityholders’ Representative as agent (the “Equityholders’ Representative”). (b) The Indemnifying Equityholders by the approval and attorney adoption of this Agreement and in fact for consideration of the Company and each Equityholder, and receipt of the Merger Shares authorize the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreementhereby, or the defense (ii) to defend and/or settlement of settle any claims for which the Indemnifying Equityholders may be required to indemnify Parent or any other Indemnified Party Zipcar and/or the Surviving Corporation pursuant to Article VIIIVI hereof and to assert and/or settle any claims for which the Indemnifying Equityholders may seek indemnification from Zipcar pursuant to Article VI hereof, (iiiii) to give and receive all notices required to be given to under the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Company Equityholders by the terms of this Agreement or Agreement. (c) In the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided event that the Equityholders’ Representative shall not be resigns from such position, the Company Shareholders holding, after the Closing, a majority of the outstanding Merger Shares held by the Indemnifying Equityholders are authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from and shall select another representative to fill such Indemnifying Party, (2) agree vacancy and such substituted representative shall be deemed to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, be the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for all purposes of clarity, there are no obligations of this Agreement and the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as documents delivered pursuant hereto. (d) All decisions and actions by the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements any agreement between the Equityholders’ Representative and Parent Zipcar relating to the defense or settlement of any claims for which the Indemnifying Equityholders may be required to indemnify Parent Zipcar and/or the Surviving Corporation pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article IVI hereof, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such EquityholderCompany Shareholders, and no Equityholder Company Shareholder shall have the right to object, dissent, protest or otherwise contest the same. (ce) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the The Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall not have any liability or obligation to any of the parties to this Agreement Parties or to the Indemnifying Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement hereunder as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Indemnifying Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group it harmless against any damage, loss, cost, liability, fees liability or expenses (including fees, disbursements and costs expense incurred without fraud or willful misconduct on the part of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of its duties hereunder. (f) By his, her or its approval of the Equityholders’ Representative’s duties under Merger and this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith receipt of the Equityholders’ RepresentativeMerger Shares, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Indemnifying Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agreeagrees, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent Zipcar shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent Zipcar and/or the Surviving Corporation pursuant to Article VIIIVI hereof, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) or any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements)hereunder, and no Equityholder party hereunder shall have any cause of action against Parent Zipcar for any action taken by Parent Zipcar in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Indemnifying Equityholders and no Indemnifying Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement Agreement, except for fraud, gross negligence, fraud or willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IXSection 1.9; (iii) the provisions of this Article IX Section 1.9 are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Indemnifying Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and; (iv) remedies available at law for any breach of the provisions of this Section 1.9 are inadequate; therefore, the Equityholders’ Representative, Zipcar and the Surviving Corporation shall be entitled to seek temporary and permanent injunctive relief without the necessity of proving damages if any of the Equityholders’ Representative, Zipcar and/or the Surviving Corporation brings an action to enforce the provisions of this Section 1.9; (v) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement Section 1.9 shall be binding upon the executors, heirs, legal Representativesrepresentatives, personal Representativesrepresentatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Indemnifying Equityholder, and any reference references in this Agreement or the Escrow Agreement to an Indemnifying Equityholder or the Indemnifying Equityholders shall mean and include the successors to the any Indemnifying Equityholder’s rights of the Equityholders under this Agreementhereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise.; and (fvi) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheetentitled, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing at the Equityholders’ Representative Representative’s written request, to reimbursement by each Indemnifying Equityholder for any third-party such Indemnifying Equityholder’s Pro Rata Share of all expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination incurred by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemcapacity.

Appears in 1 contract

Sources: Merger Agreement (Zipcar Inc)

Equityholders’ Representative. (a) The Equityholders10.6.1 Except as otherwise provided in this Agreement, by any right or action that may be taken at the approval and adoption of this Agreement and without any further action of any election of the Equityholders or the Company, hereby appoint will be taken by the Equityholders’ Representative as agent and attorney in fact for on behalf thereof. The initial Equityholders’ Representative will be Shareholder Representative Services LLC. The Equityholders’ Representative may resign at any time. Upon its resignation, the holders of a majority of the voting power of the Company and each Equityholder, and authorize Securities at the time of Closing may designate a successor Equityholders’ Representative. Any Equityholders’ Representative so designated must be reasonably acceptable to the Purchaser. 10.6.2 Any change in the Equityholders’ Representative (i) to take all action necessary to consummate will become effective upon notice in accordance with Section 10.2. The Equityholders will indemnify and hold the Merger Purchaser Indemnified Parties and their Representatives harmless from any claim of any Equityholder arising out of any act or omission by the other Equityholders’ Representative in connection with the transactions contemplated by this Agreement and the Escrow Agreement. 10.6.3 Except as otherwise provided in this Agreement, any right or action that may be taken at the defense and/or settlement election of any claims for which the Equityholders may will be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to taken by the Equityholders’ Representative under this Agreementon behalf thereof. Each of the Equityholders hereby irrevocably appoints the Equityholders’ Representative, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate agent and authorize delivery to Parent attorney-in-fact of each of the General Escrow Property Equityholders for the purposes of acting in the name and stead of such Equityholder in: (a) paying any associated costs and expenses of the Designated Escrow Property in satisfaction of claims transactions hereunder required to be paid by Parent such Equityholder; (b) giving and set off of Milestone Payments pursuant receiving all notices permitted or required by this Agreement and acting on Equityholders’ behalf hereunder for all purposes specified herein; (c) agreeing with the Purchaser as to Section 8.6, (iv) object to such claims pursuant any amendments to this AgreementAgreement which the Equityholders’ Representative may deem necessary or advisable, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders including the extension of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions time in connection with the resolution of any dispute relating which to this Agreement, or consummate the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required the waiver of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, closing conditions; (vid) consult with employing legal counsel, independent public accountants ; (e) paying any legal and any other experts selected fees and expenses incurred by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreementconsummating the transactions contemplated by this Agreement; (f) defending or settling claims arising under this Agreement; and (g) making, scheduleexecuting, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to timeacknowledging, or if and delivering all such Person resigns from its position as contracts, orders, receipts, notices, requests, instructions, certificates, letters, and other writings, and in general doing all things and taking all actions which the Equityholders’ Representative, then a successor in its sole discretion, may consider necessary or proper in connection with or to carry out the terms of this Agreement, as fully as if such Equityholders were personally present and acting. This power of attorney and all authority conferred hereby is granted and conferred subject to the interests of the other Parties to this Agreement, and in consideration of those interests and for the purpose of completing the transactions contemplated hereby, this power of attorney and all authority conferred hereby shall be appointedirrevocable and shall not be terminated by Equityholders or by operation of Law, whether by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal termination of the Equityholders’ Representative or by the occurrence of any member of the Advisory Group and the Closing and/or other event. If any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on AuthorityEquityholder should die or become incompetent or incapacitated, or any other event should occur, all decisions and actions taken by the Equityholders’ Representative in accordance with pursuant to this Article IXAgreement shall be as valid as if such death, including without limitation (i) agreements between incompetence, or incapacity or other event had not occurred, regardless of whether the Purchaser or the Equityholders’ Representative, or any of them, shall have received notice of such death, incompetence, incapacity, or other event. The Equityholders’ Representative will be promptly reimbursed by the Equityholders for all reasonable expenses, disbursements and advances incurred by the Equityholders’ Representative in such capacity upon demand and Parent relating shall have no obligation under any circumstances to advance funds to the defense or settlement of claims Equityholders for which the Equityholders may be required to indemnify Parent pursuant to Article VIII any such expenses, disbursements and (ii) agreements between the advances. The Equityholders’ Representative and Parent relating will incur no liability of any kind with respect to the Escrow Agreement any action or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing omission by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties Representative’s services pursuant to this Agreement or to and any agreements ancillary hereto, except in the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as event of liability directly resulting from the Equityholders’ Representative while acting in good faith, without Representative’s gross negligence or willful misconduct, and in the exercise of reasonable judgment, and . The Equityholders’ Representative shall not be liable for any act done action or omitted omission pursuant to the advice of counsel shall be conclusive evidence of such good faithcounsel. The Equityholders shall Equityholders, severally and not jointly jointly, agree to indemnify and defend hold harmless the Equityholders’ Representative Group for and hold the Equityholders’ Representative Group harmless against from any damageand all losses, lossliabilities, costdamages, liabilityclaims, fees or penalties, fines, forfeitures, actions, fees, costs and expenses (including fees, disbursements the fees and costs expenses of counsel and other skilled professionals experts and in connection with seeking recovery from insurerstheir staffs and all expense of document location, judgmentsduplication and shipment) (collectively, fines or amounts paid in settlement“Representative Losses”) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under execution and performance of this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “Representative Losses”)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 gross negligence, negligence or willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, negligence or willful misconduct or bad faithmisconduct. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from (i) the funds in the Expense Fund, Fund and second, from any distribution of (ii) the General Escrow Fund, Designated amounts in the Adjustment Escrow Fund or Milestone Payment and Indemnity Escrow Fund at such time as remaining amounts would otherwise be distributable to the Equityholders at the time of distributionEquityholders; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may beaforementioned sources of funds, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance termination of any of its powers, rights, duties or privileges or pursuant to this Agreement. 10.6.4 Notwithstanding anything in this Agreement to the contrary, the Escrow any claim, action or dispute (whether under Section 9.1 or otherwise) between Purchaser and one or more or individual Equityholders for breach of a representation and warranty under Article IV, breach of a covenant or agreement under this Agreement or the transactions contemplated hereby or thereby. FurthermoreFraud committed by such individual Equityholder(s) and not by all Equityholders, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with fundsbrought and maintained by Purchaser directly against such individual Equityholder(s), security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power no duties or authority with respect to such claims. For the avoidance of doubt and authority on behalf of each Equityholder notwithstanding anything in this Agreement to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights ofthe contrary, the limitations on liability of the Equityholders under set forth elsewhere in this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition are not intended to be applicable to the foregoing, and solely indemnities provided to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this AgreementSection 10.6.3. 10.6.5 At the Closing, the Escrow Agreement and any Stockholder Related Agreement Purchaser will wire US$75,000.00 (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii“Expense Fund”) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the deathas a Selling Expense, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund which will be used for the purposes of (i) paying directly directly, or reimbursing the Equityholders’ Representative for for, any third-third party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Groupagreements hereto. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, gross negligence or willful misconduct or bad faithmisconduct. The Equityholders’ 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 Equityholders’ Representative is not acting Contemporaneous with or as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly soon as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by completion of the Equityholders’ Representative that the Expense Fund is no longer required to be withheldRepresentative’s duties, the Equityholders’ Representative shall deliver, or cause to be delivered, will deliver the amount remaining in balance of the Expense Fund to the Paying Agent, Payments Administrator for further distribution to the Equityholders. For tax purposes, the Expense Fund will be treated as having been received and voluntarily set aside by the Equityholders in accordance with at the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment time of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemClosing.

Appears in 1 contract

Sources: Merger Agreement (Connecture Inc)

Equityholders’ Representative. (ai) The EquityholdersEach Equityholder hereby authorizes, by directs and appoints (and each other holder of Company Capital Stock pursuant to the approval terms of such Stockholder’s Transmittal Letter and adoption of this the Joinder Agreement and without any further action each other Optionholder pursuant to the terms of any such Optionholder’s Option Cancellation Agreement shall authorize direct and appoint) Actua USA Corporation to act as sole and exclusive agent, attorney-in-fact and representative of the Equityholders or (the Company, hereby appoint “Equityholders’ Representative”) and authorizes and directs the Equityholders’ Representative as agent and attorney in fact for the Company and each Equityholder, and authorize the Equityholders’ Representative to (iA) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of (including executing and delivering any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing documents, incurring any costs and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions expenses on behalf of the Equityholders and take making any and all additional action as is contemplated determinations) which may be required or permitted by this Agreement to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow AgreementEquityholders, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments exercise such other rights, power and authority, as are authorized, delegated and granted to the Equityholders’ Representative pursuant to this Agreement, the Escrow Agreement Agreement, the Paying Agent Agreement, any Transmittal Letter or any Option Cancellation Agreement, and (C) exercise such rights, power and authority as are incidental to the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”)foregoing. Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and herein, in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Paying Agent Agreement and the Escrow Agreement. (b) Subject to the Limits on Authoritydocuments contemplated hereby and thereby. Any such actions taken, all decisions exercises of rights, power or authority, and actions taken any decision or determination made by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article Iconsistent therewith, shall be absolutely and irrevocably binding upon all of the Equityholders on each Equityholder, and each such Equityholder’s successors successors, as if expressly confirmed and ratified in writing by such Equityholderholder personally had taken such action, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (exercised such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties power or privileges authority or pursuant to this Agreement, the Escrow Agreement made such decision or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, determination in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses such holder’s capacity and liabilities all defenses which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject available to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each any Equityholder to take any and all actions on behalf ofcontest, execute any and all instruments on behalf of, and execute negate or waive any and all rights of, disaffirm the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative good faith under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) waived. The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (ias defined below) hereunder (x) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, thereto and (iiy) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (gii) Each Equityholder agrees that neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees (collectively, the “Equityholders’ Representative Group”), shall be liable for any actions taken or omitted to be taken under or in connection with this Agreement, the Escrow Agreement, the Paying Agent Agreement or any Equityholders’ Representative engagement agreement, or the transactions contemplated hereby or thereby, except for such actions taken or omitted to be taken resulting from the Equityholders’ Representative’s willful misconduct. Furthermore, each Equityholder shall indemnify, defend and hold harmless, severally (and not jointly), pro rata based upon such Equityholder’s Pro Rata Share, from and against any and all losses, claims, damages, liabilities, fees, costs, expenses (including reasonable attorneys’ fees and expenses of other skilled professionals and in connection with seeking recovery from insurers), judgments, fines or amounts paid in settlement (collectively, “Representative Expenses”) paid or incurred by the Equityholders’ Representative in connection with the performance of its obligations as Equityholders’ Representative, including in the defense of any indemnification claim brought against the Responsible Persons under Section 8. The payment of such expenses shall first be made by the Equityholders’ Representative out of the Reserve Account, second, from any distribution of the Indemnity Escrow Fund otherwise distributable to the Equityholders at the time of distribution, and thereafter the Equityholders’ Representative shall be entitled to: have the right to demand payment with respect to such expenses from each Equityholder severally (i) rely and not jointly), pro rata based upon the Closing Spreadsheet, (ii) rely upon any signature believed by it to be genuine, and each such Equityholder’s Pro Rata Share. (iii) reasonably assume that a signatory has proper authorization to sign on behalf The Reserve Account shall be held by the Equityholders’ Representative as agent and for the benefit of the applicable Equityholder or other party. (h) The Expense Fund will Equityholders in a segregated client account and shall be used (A) for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses Representative Expenses incurred pursuant to this Agreement, the Escrow AgreementAgreement or any Equityholders’ Representative letter agreement, the Engagement Agreement and any agreement ancillary hereto and or (iiB) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earningsGroup. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable shall have no responsibility or liability for any loss of principal of the Expense Fund Reserve Account other than as a result of its negligence, gross negligence or willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcymisconduct. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense FundReserve Account, and has no tax reporting or income distribution obligationsobligations hereunder. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the The Equityholders’ Representative shall deliver, or cause to be delivered, the amount release all amounts remaining in the Expense Fund Reserve Account to the Paying Agent, Agent (for further distribution to the Equityholders Stockholders) and the Company (for further distribution to the Optionholders) for further distribution to the Equityholders, in each case in accordance with the allocations provided Distribution Waterfall, upon the later of the Release Date (as defined in the Escrow Agreement) or the resolution of all indemnification claims against the Responsible Persons still pending as of the Release Date. (iv) The Parties agree that Parent and Merger Sub and, following the Closing, the Surviving Corporation, shall be entitled to rely on any action taken by the Equityholders’ Representative, on behalf of each of the Equityholders, pursuant to this Section 1.13(b9(i) (each, an “Authorized Action”), providedand that each Authorized Action shall be binding on each Equityholder as fully as if such Equityholder had taken such Authorized Action. The Equityholders agree to pay, based on their respective Pro Rata Shares, and to indemnify and hold harmless, based on their respective Pro Rata Shares, the Parent Group from and against any Losses which they may suffer, sustain, or become subject to, as the result of any claim by any Person that Parent an Authorized Action is not binding on, or enforceable against, any Equityholder. (v) The Equityholders’ Representative shall be entitled to: (A) rely upon the Distribution Waterfall, (B) rely upon any signature believed by it to be genuine, and (C) reasonably cooperate with assume that a signatory has proper authorization to sign on behalf of the applicable Equityholder or other party. The Equityholders’ Representative may resign at any time following the Closing Date, and may be removed or replaced by the vote of the Equityholders who, immediately prior to the Effective Time, held at least a majority of the outstanding shares of Company Capital Stock, in each case upon five (5) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative to facilitate and the payment Closing and/or any termination of any portion of such payment that is payable to Company Optionholders who are current or former employees this Agreement, the Escrow Agreement and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemthe Paying Agent Agreement.

Appears in 1 contract

Sources: Merger Agreement (Actua Corp)

Equityholders’ Representative. (a) The Equityholders, By virtue of the approval of the Merger and this Agreement by the approval and adoption of this Agreement Equityholders and without any further action of any of the Equityholders or the Company, the Company hereby appoint irrevocably constitutes and appoints Fortis Advisors LLC as the Equityholders’ sole, exclusive, true and lawful agent and attorney-in-fact (the “Equityholders’ Representative”), and each Equityholder irrevocably constitutes and appoints the Equityholders Representative as his/her/its sole, exclusive, true and lawful agent and attorney-in-fact, with full power of substitution to act in such Equityholder’s name, place and stead with respect to all transactions contemplated by and all terms and provisions of this Agreement and the Escrow Agreement, and to act on such Equityholder’s behalf in any dispute, litigation or arbitration involving this Agreement and the Escrow Agreement, and to do or refrain from doing all such further acts and things, and execute all such documents, on such Equityholder’s behalf, as the Equityholders’ Representative as agent and attorney deems necessary or appropriate in fact for connection with the Company and each Equityholder, and authorize the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreement, including the power: (i) to execute and deliver this Agreement and the Escrow Agreement and any and all amendments, waivers or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, modifications hereof and thereof; (ii) to give and receive all notices required to be given waive any condition to the Equityholders’ Representative under obligations of such Equityholder to consummate the transactions contemplated by this Agreement, the Escrow Agreement or and the Stockholder Related Agreements, Equityholders’ Representative Engagement Agreement; (iii) to reviewexecute and deliver all ancillary agreements, negotiate certificates and authorize delivery documents, and to Parent make representations and warranties therein, on behalf of such Equityholder that the Equityholders’ Representative deems necessary or appropriate in connection with the consummation of the General transactions contemplated by this Agreement, the Escrow Property Agreement and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, Equityholders’ Representative Engagement Agreement; (iv) with respect to any claims for indemnification made by Parent hereunder, agree to, object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, into settlements and compromises of, and demand arbitration litigation of and comply with Orders orders and awards of courts with respect to such claims; (v) with respect to any disputes regarding Milestone Events or otherwise hereunder, agree to, object to, negotiate, enter into settlements and compromises of, and demand litigation of and comply with orders and awards of courts and awards of arbitrators with respect toto such disputes; and (vi) to do or refrain from doing any further act or deed on behalf of such Equityholder as is assigned, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating delegated or charged to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for or that the accomplishment Equityholders’ Representative otherwise deems necessary or appropriate in its sole discretion relating to the subject matter of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that and the Equityholders’ Representative shall not be authorized to (1) receive notice ofEngagement Agreement, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from as fully and completely as such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”)Equityholder could do if personally present. Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein herein, in the Escrow Agreement and in the Escrow Agreement, the Equityholders’ Representative Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Company Disclosure Schedule. Letter, other than pursuant to Exhibit D. All such actions set forth or described in this Section 9.11(a) will be deemed to be facts ascertainable outside this Agreement and will be binding on the Equityholders. (b) The Person serving as powers, immunities and rights to indemnification granted to the Equityholders’ Representative hereunder (i) are deemed coupled with an interest and will be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the Indemnity Escrow Fund. Parent, its Affiliates and any other Person may conclusively and absolutely rely, without inquiry, upon any action of the Equityholders’ Representative on behalf of the Equityholders in all matters referred to herein. All notices delivered by Parent or the Company (following the Closing) to the Equityholders’ Representative (whether pursuant hereto or otherwise) for the benefit of the Equityholders will constitute notice to the Equityholders. (c) The Equityholders’ Representative will act for the Equityholders on all of the matters set forth in this Agreement in the manner the Equityholders’ Representative believes to be removed or replaced from time to timein the best interest of the Equityholders as a whole and consistent with its obligations under this Agreement, or if such Person resigns from its position as but neither the Equityholders’ Representative, nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”), will be responsible to the Equityholders for any loss or damages it or they may suffer by reason of the performance by the Equityholders’ Representative of its duties under this Agreement, under the Escrow Agreement or under the Equityholders’ Representative Engagement Agreement, other than loss or damage arising from fraud, bad faith, gross negligence or willful misconduct by the Equityholders’ Representative. (d) If the Equityholders’ Representative resigns or is otherwise similarly unable to carry out its duties hereunder, then the Equityholders with an aggregate Pro Rata Portion of at least 50.1% (the “Requisite Equityholders”) will, within five Business Days, appoint a new Equityholders’ Representative. The Requisite Equityholders may at any time, for any reason or no reason, remove the Equityholders’ Representative. If at any time there is not a Equityholders’ Representative and the Equityholders fail to designate in writing a successor may be appointed, by the holders Equityholders’ Representative within twenty (20) Business Days after receipt of a majority written request delivered by Parent to the Requisite Equityholders requesting that a successor Equityholders’ Representative be designated in interest of the aggregate value of property writing, then held in the General Escrow Fund upon Parent may appoint a new Equityholders’ Representative hereunder (who will not less than thirty (30) days’ prior written notice to be affiliated with Parent). The immunities and rights to indemnification of the Equityholders’ Representative Group shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (be) Subject to the Limits on AuthorityAll actions, all decisions and actions taken by instructions of the Equityholders’ Representative in accordance with this Article IXtaken, including without limitation (i) agreements between made or given pursuant to the authority granted to the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII this Section 9.11 will be conclusive and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders each Equityholder and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall will have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders . Each Equityholder, by the execution and delivery of any Stockholder Consent, Letter of Transmittal or Cancellation Agreement, as applicable, will be deemed to have entered into an engagement agreement (the “Engagement Agreement”) with approved, confirmed and ratified any action taken by the Equityholders’ Representative to provide direction in the exercise of the power-of-attorney granted to the Equityholders’ Representative in connection pursuant to this Section 9.11, which power-of-attorney, being coupled with its services under this Agreementan interest, is irrevocable and will survive the Escrow Agreement and the Engagement Agreement death, incapacity or incompetence of each such Equityholder. (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the f) The Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or will not be liable to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement hereunder in its capacity as the Equityholders’ Representative while acting in good unless caused by fraud, bad faith, without gross negligence or willful misconductmisconduct by the Equityholders’ Representative. The Equityholders’ Representative will not have any fiduciary, agency or other duties to the Equityholders and its only obligations will be as expressly set forth in this Agreement. The Equityholders’ Representative is serving in that capacity solely for purposes of administrative convenience, and in is not personally liable for any of the exercise obligations of reasonable judgmentthe Equityholders hereunder, and any act done or omitted pursuant Parent and the Company agree that they will not look to the advice underlying assets of counsel shall be conclusive evidence the Equityholders’ Representative for the satisfaction of such good faithany obligations of the Equityholders (or any of them). The Equityholders shall severally will severally, in accordance with their respective Pro Rata Portions (and not jointly jointly), indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group on demand harmless against any damagedamages, losslosses, costclaims, liabilityliabilities, fees or fees, costs, expenses (including fees, disbursements and costs of counsel and other skilled professionals and incurred in connection with seeking recovery from insurers), judgments, fines or amounts paid in settlementsettlement (collectively, the “Equityholders’ Representative Expenses”) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance acceptance, performance or administration of the Equityholders’ Representative duties hereunder, under the Escrow Agreement or under the Equityholders’ Representative Engagement Agreement, including the reasonable fees and expenses of any legal counsel, accountants, auditors and other professionals or advisors retained by the Equityholders’ Representative, in each case as such Equityholders’ Representative Expenses are incurred, which rights will survive the resignation or removal of the Equityholders’ Representative, except to the extent caused by fraud, bad faith, gross negligence or willful misconduct by the Equityholders’ Representative. The Equityholders’ Representative will be entitled to retain its own counsel and other professional advisers in connection with the acceptance, performance or administration of the Equityholders’ Representative’s duties hereunder, under this Agreement, the Escrow Agreement and or under the Equityholders’ Representative Engagement Agreement (collectively, or the “Representative Losses”), in each case as such Representative Loss is suffered or incurred, provided, that in the event that exercise of any such Representative Loss is finally adjudicated to have been directly caused by the gross negligence, willful misconduct or bad faith of the Equityholders’ Representative’s rights hereunder, under the Escrow Agreement or under the Equityholders’ Representative Engagement Agreement, and will reimburse further be entitled to withdraw from the Equityholders Representative Expense Amount the amount of any Equityholders’ Representative Expenses, and in the event that the Representative Expense Amount has been fully depleted, the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses Expenses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, withdrawn from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment amounts otherwise distributable to the Equityholders Equityholders, at the time of distribution; such distribution (provided, that while nothing in this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not Section 9.11(f) shall relieve the Equityholders from of their obligation to promptly pay such Equityholders’ Representative Losses Expenses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise). In the event of any ambiguity or uncertainty hereunder, the Equityholders’ Representative may, in its sole and reasonable discretion, refrain from taking any action, unless the Equityholders’ Representative receives written instructions, signed by the Advisory Group (in accordance with the terms of the Equityholders’ Representative Engagement Agreement), that eliminate such ambiguity or uncertainty. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (dg) Subject If the Equityholders’ Representative elects to take any other action under this Agreement that may require the Limits on Authoritypayment of amounts out of the Representative Expense Amount, including for any attorneys, accountants, auditors or other advisors, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take may refrain from taking any and all actions on behalf ofsuch action until such time as the Equityholders’ Representative, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition upon seven days’ notice to the foregoingAdvisory Group, and solely to receives written commitments signed by the extent consistent Advisory Group (in accordance with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions terms of the Equityholders’ Representative as to (AEngagement Agreement) the settlement for payment of any claims for indemnification by Parent pursuant to Article VIIIsuch expenses, (B) actions taken in respect which case all Equityholders will pay their Pro Rata Portion of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken such estimated expenses. Any such initial notice by the Equityholders’ Representative under this Agreementto the Advisory Group will include a statement of the balance of the Representative Expense Amount, the Escrow Agreement and any Stockholder Related Agreement (other than good faith estimate of the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken reasonable expenses to be incurred by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; , the amount by which the estimated expenses to be incurred exceed the balance of the Representative Expense Amount, and each Equityholder’s Pro Rata Portion of such excess expense amount. Each Equityholder will deliver its Pro Rata Portion of any excess expense amount by wire transfer of immediately available funds, using the wire instructions identified in any such initial notice, no later than ten days following the date on which the Equityholders’ Representative gives such Equityholder notice of the receipt of commitments signed by the Advisory Group (ii) all actions, decisions and instructions in accordance with the terms of the Equityholders’ Representative taken Engagement Agreement) for payment of such excess expenses; provided, however, that no Equityholder will be required to make any payments, individually or in accordance with the aggregate, pursuant to this Article IX Section 9.11(g) in excess of 95% of the Merger Consideration previously received by such Equityholder. Any amounts thus paid will increase the balance of the Representative Expense Amount. (h) The Representative Expense Amount shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith held by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest a segregated client account and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: used (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses Equityholders’ Representative Expenses incurred pursuant to this Agreement, the Escrow Agreement or the Equityholders’ Representative Engagement Agreement, the Engagement Agreement and any agreement ancillary hereto and or (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable shall have no responsibility or liability for any loss of principal of the Representative Expense Fund Amount other than as a result of its negligencefraud, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy, gross negligence or willful misconduct. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Representative Expense FundAmount, and has no tax reporting or income distribution obligations. The Equityholders will not receive any interest on the Representative Expense Amount and assign to the Equityholders’ Representative any such interest. Subject to Advisory Group approval, the Equityholders’ Representative may contribute funds to the Representative Expense Amount from any consideration otherwise distributable to the Equityholders. As promptly soon as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination determined by the Equityholders’ Representative that the Representative Expense Fund Amount is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, distribute the amount remaining in the Representative Expense Fund Amount (if any) to the Paying AgentAgent and/or Parent, as applicable, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders. (i) The Equityholders’ Representative shall have reasonable access to facilitate information about the payment Surviving Corporation and the reasonable assistance of the Company’s former officers and employees for purposes of performing its duties and exercising its rights hereunder; provided, however, that neither Parent nor the Surviving Corporation shall be obligated to provide such access or information if it determines, in its reasonable judgment, that doing so would jeopardize the protection of attorney-client privilege. The Equityholders’ Representative shall take reasonable steps to ensure that any portion information provided by the Parent or the Surviving Corporation pursuant to this Agreement is not disclosed to any competitor of such payment that is payable to Company Optionholders who are current the Parent or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.the Surviving Cor

Appears in 1 contract

Sources: Merger Agreement (Bioverativ Inc.)

Equityholders’ Representative. (a) The Equityholders, by the approval and adoption of this Agreement and without any further action of any of the Equityholders or the Company, hereby appoint Parties have agreed that it is desirable to designate the Equityholders’ Representative to act on behalf of the Equityholders for certain limited purposes, as agent specified herein. The execution and attorney in fact for delivery of this Agreement by the Company Equityholders shall, to the maximum extent permitted under applicable Law, constitute irrevocable ratification and each Equityholder, approval of such designation by the Equityholders and authorize authorization of the Equityholders’ Representative to serve in such capacity (i) including to take settle any and all action necessary to consummate the Merger and the other transactions contemplated by disputes with Parent under this Agreement and the Escrow Agreement), or and shall also constitute a reaffirmation, approval, acceptance and adoption of, and an agreement to comply with and perform, all of the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give acknowledgments and receive all notices required to be given to agreements made by the Equityholders’ Representative under on behalf of the Equityholders in this Agreement, Agreement and the other documents delivered in connection herewith (including the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment ). The designation of the Equityholders’ Representative for is coupled with an interest, and, except as set forth in the accomplishment immediately preceding sentence, such designation is irrevocable and shall not be affected by the death, incapacity, illness, bankruptcy, dissolution or other inability to act on behalf of any of the foregoing and Equityholders. A new Equityholders’ Representative may be appointed at any time by the vote of Persons which collectively own all of the other termsEquity Interests as of immediately prior the Closing, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at such appointment to become effective upon the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders written acceptance thereof by the terms new Equityholders’ Representative. Written notice of this Agreement any resignation or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices appointment of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized delivered by the Equityholders’ Representative to Parent promptly after such action is taken. (1b) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the The Equityholders’ Representative shall have no obligation such powers and authority as are necessary or appropriate to act carry out the functions assigned to it under this Agreement and in any other document delivered in connection herewith (including the Escrow Agreement), including all (and the exclusive) power and authority to settle any and all disputes with Parent under this Agreement and the Escrow Agreement and to amend this Agreement and the other agreements contemplated hereby in any and all respects on behalf of all of the Equityholders, except as expressly provided herein and in the Escrow Agreementeach case, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to timedetermines in its sole discretion, or which settlements and amendments shall bind all of the Equityholders hereto as if such Person resigns from its position as Equityholders made such settlement or executed such amendment. Parent, the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement Surviving Corporation and the Escrow Agreement. (b) Subject Agent shall be entitled to rely on the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between independent inquiry into the Equityholders’ Representative and Parent relating to the defense or settlement capacity of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreementso act. All actions, the Escrow Agreement notices, communications and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred determinations by the Equityholders’ Representative and arising to carry out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 functions shall conclusively be deemed to have been directly caused by the gross negligenceauthorized by, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheldupon, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.

Appears in 1 contract

Sources: Agreement and Plan of Merger (Hampshire Group LTD)

Equityholders’ Representative. (a) The Equityholders, by By virtue of the approval and adoption of this Agreement by the Required Equityholder Vote and the delivery of the Written Consent, and without any further action of any Equityholder, each Equityholder shall be deemed to have irrevocably constituted and appointed Westmoor Trail Partners LLC (which, by execution of the Equityholders or the Companythis Agreement, hereby appoint accepts such appointment) to act as the Equityholders’ Representative and as the sole and exclusive agent and attorney in attorney-in-fact for and on behalf of the Company and each EquityholderEquityholders (in their capacity as such), and authorize the Equityholders’ Representative (i) with full power of substitution, to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement actions on behalf of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to the Equityholders’ Representative under in connection with this Agreement, the Escrow Agreement and any agreement executed with the Exchange Agent, including (i) to execute and deliver on behalf of the Equityholders any amendment, consent or waiver under this Agreement and the Stockholder Related Agreementsother Transaction Documents, (ii) to assert, and to agree to resolution of, all claims and disputes hereunder or thereunder, including under Section 2.10 and Article X hereof, (iii) to review, negotiate retain legal counsel and authorize delivery to Parent other professional services in connection with the performance by the Equityholders’ Representative of the General Escrow Property this Agreement and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6other Transaction Documents, (iv) object to such claims execute and deliver on the Equityholders’ behalf all documents and instruments which may be executed and delivered pursuant to this AgreementAgreement and the other Transaction Documents, (v) consent to make and receive notices and other communications pursuant to this Agreement and the other Transaction Documents and service of process in any Action arising out of or agree torelated to this Agreement and the other Transaction Documents, (vi) to negotiate, enter intosettle or compromise any Action arising out of or related to this Agreement or the other Transaction Documents or any of the transactions hereunder or thereunder, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, including to take any actions action (or determine not to take action) in connection with the defense, prosecution, settlement, compromise or other resolution of any dispute relating claim for indemnification pursuant to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwiseArticle X, and take (vii) to do each and every act and exercise all rights that are either (x) necessary or forego any or all actions permitted or required of any Equityholder or necessary appropriate in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, or (viy) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by mandated or on behalf of the Equityholders permitted by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”)Transaction Documents. Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and herein, in the Escrow AgreementAgreement and in any agreement with the Exchange Agent, the Engagement Agreementand, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary other agreement, scheduleany Schedule or Exhibit hereto, exhibit or the Company Disclosure Schedule. (b) The power of attorney granted in this Article X and the powers, immunities and rights to indemnification granted to the Equityholders’ Representative hereunder (i) are coupled with an interest and shall be irrevocable, may be delegated by the Equityholders’ Representative and shall survive the death or incapacity of each Equityholder and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the Escrow Accounts, the Expense Account or any other consideration to be received by such Equityholder hereunder. The Person serving Equityholders’ Representative may resign at any time. Such agency may be changed, and, if the Equityholders’ Representative resigns or is otherwise incapable of fulfilling its duties hereunder or under the Escrow Agreement or any agreement with the Exchange Agent, such agency shall be changed, by a majority of the Equityholders (as determined by their respective share Indemnification Share) as of such time (including in the event of the resignation, death, disability or other incapacity of an Equityholders’ Representative that is an individual), and, following the provision of notice to Parent, the newly appointed representative shall be the Equityholders’ Representative for all purposes hereunder, and any such successor shall succeed the Equityholders’ Representative as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parenthereunder. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and any agreement with the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”)Exchange Agent. Neither the removal of, nor the appointment of a successor to, the Equityholders’ Representative nor its membersshall affect in any manner the validity or enforceability of any actions taken or agreements, managers, directors, officers, contractors, agents and employees nor any member of understandings or commitments entered into by the Advisory Group (collectively, the “prior Equityholders’ Representative Group”) Representative, which shall have any liability or obligation continue to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as be effective and binding on the Equityholders’ Representative while acting in good faith. For the avoidance of doubt, without gross negligence any compromise or willful misconduct, and in the exercise settlement of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred matter by the Equityholders’ Representative hereunder shall be binding on, and arising out of or in connection with the acceptance or administration of the fully enforceable against, all Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith . No bond shall be required of the Equityholders’ Representative, and the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss shall not receive any compensation for its services other than pursuant to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the that certain Equityholders’ Representative by the EquityholdersEngagement Agreement, any such Representative Losses may a true and complete copy of shall be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable provided to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to Parent promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. following execution thereof. (c) The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement Agreement, the Equityholders’ Representative Engagement Agreement, any agreement with the Exchange Agent or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions; provided that each Equityholder shall provide the Equityholders’ Representative with his, her or its Indemnification Share, security or indemnities in respect of any actions required to be taken and payments to be made on behalf of the Equityholders’ Representative or the Equityholders by the Equityholders’ Representative pursuant to the terms of this Agreement. (d) Subject A decision, act, consent or instruction of the Equityholders’ Representative hereunder shall constitute a decision, act, consent or instruction of all of the Equityholders and shall be final, binding and conclusive upon each of the Equityholders and their successors, and all defenses which may be available to any Equityholder to contest, negate or disaffirm the action of the Equityholders’ Representative taken under this Agreement, the Escrow Agreement, the Equityholders’ Representative’s engagement agreement or any agreement with the Exchange Agent are waived. The Escrow Agent, Exchange Agent, Parent or Merger Sub, the Surviving Corporation, may rely upon any such decision, act, consent or instruction of the Equityholders’ Representative as being the decision, act, consent or instruction of each and every such Equityholder. The Parent Indemnified Parties are hereby relieved from any Liability to any Person for any acts done by them in accordance with any such decision, act, consent or instruction of the Equityholders’ Representative. Each Equityholder hereby agrees that for any Action arising under this Agreement or any other Transaction Document such Equityholder may be served legal process by registered mail to the Limits on Authorityaddress set forth in Section 13.01 for the Equityholders’ Representative (or any alternative address designated to the parties in writing by the Equityholders’ Representative), and that service in such manner shall be adequate and such Equityholder shall not assert any defense of claim that service in such manner was not adequate or sufficient in any court in any jurisdiction. Each Equityholder shall promptly provide written notice to the Equityholders’ Representative of any change of address of such Equityholder. (e) Without limiting the generality of the foregoing and for the avoidance of doubt, for purposes of Article X, if indemnification is sought against any Equityholder as an Indemnifying Party hereunder, then, in either such case, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments act on behalf of, and execute or waive any and all rights receive notice on behalf of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements)such Equityholder. (ef) The Equityholders’ Representative, by approval solely in its capacity as the representative of the Equityholders, represents and adoption warrants to Parent and Merger Sub, as of this Agreementthe date hereof and as of the Closing Date, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), thatas follows: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite limited liability company power and authority and all permits required to carry on its business in all material respects as to currently conducted; (Aii) the settlement execution and delivery of any claims for indemnification this Agreement by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claimsthe Equityholders’ Representative, and (C) any other actions required or permitted to be taken the performance by the Equityholders’ Representative under this Agreementof its obligations hereunder, have been duly authorized by all necessary corporate action on the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions part of the Equityholders’ Representative; (iiiii) all actions, decisions this Agreement has been duly executed and instructions delivered by the Equityholders’ Representative and this Agreement constitutes a legally valid and binding obligation of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action Representative, enforceable against the Equityholders’ Representative for any action takenin accordance with its terms (subject to applicable bankruptcy, decision made or instruction given by the Equityholdersinsolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditorsRepresentative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions rights generally and general principles of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreementsequity); and (iv) the provisions execution and delivery of this Article IX the Transaction Documents to which it is (or will be) a party by the Equityholders’ Representative, and all actions taken the performance by the Equityholders’ Representative of its obligations thereunder do not and will not (A) conflict with or result in a violation of the Governing Documents of the Equityholders’ Representative, (B) violate any Applicable Law or (C) require any consent or approval that has not been given or other action that has not been taken by any Person under this Agreement, the Escrow Agreement or the Engagement Agreement shall be any Contract binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow FundRepresentative. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon Each Equityholder, by its acceptance of its share of the Closing SpreadsheetCash Consideration and Closing Equity Consideration payable at Closing hereunder, (ii) rely upon any signature believed by it accepts and agrees to be genuine, and (iii) reasonably assume that a signatory has proper authorization to sign on behalf of the applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined bound by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had provisions set forth in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemthis Article XI.

Appears in 1 contract

Sources: Merger Agreement (StoneX Group Inc.)

Equityholders’ Representative. (a) The Equityholders, by By virtue of the approval and adoption of this Agreement by the Equityholders, and without any further action of any of the Equityholders Equityholder or the Company, each Equityholder shall be deemed to have irrevocably hereby appoint made, constituted and initially appointed Fortis Advisors LLC (the Equityholders’ Representative Representative”) as their exclusive agent and attorney in true and lawful attorney-in-fact for with full power of substitution to do on behalf of Equityholders any and all things, including executing any and all documents, which may be necessary, convenient or appropriate to facilitate the Company and each Equityholder, and authorize consummation of the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property Equityholders’ Representative Engagement Agreement and the Designated Escrow Property in satisfaction of claims by Parent other Transaction Documents, including: (i) receiving and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims providing notices and communications pursuant to this AgreementAgreement and the other Transaction Documents; (ii) administering this Agreement and the other Transaction Documents, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions in connection with including the resolution of any disputes or claims; (iii) making determinations to settle any dispute relating as to the calculation of the Purchase Price; (iv) resolving, settling or compromising claims for indemnification asserted against the Equityholders pursuant to Article 7; (v) agreeing to waivers of conditions and obligations under this AgreementAgreement and the other Transaction Documents; (vi) asserting claims for indemnification under Article 7 and resolving, settling or compromising any such claim (including engaging counsel and other advisors in connection therewith); and (vii) performing each and every act and exercising any and all rights which the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions Equityholders collectively are permitted or required of any Equityholder to do or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of exercise under this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and herein, in the Escrow Agreement, in the Equityholders’ Representative Engagement Agreement or in the Paying Agent Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as . (b) If the Equityholders’ Representative is of the opinion that the Equityholders’ Representative requires further authorization or advice from the Equityholders on any matters concerning this Agreement, the Equityholders’ Representative is entitled to seek such further authorization from the Advisory Group prior to acting on the Equityholders’ behalf. (c) Parent will be fully protected in dealing with the Equityholders’ Representative with respect to this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby and may rely upon the authority of the Equityholders’ Representative to act as the exclusive agent of Equityholders for all purposes under this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby. The powers, immunities and rights to indemnification granted to the Equityholders’ Representative hereunder: (i) are coupled with an interest and will be removed irrevocable by any Equityholder in any manner or replaced for any reason and will not be affected by the disability or incapacity of the principal pursuant to any applicable Legal Requirement and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholders of the whole or any fraction of his, her or its interest in the Indemnity Escrow Funds or Earnout Payments. The Equityholders’ Representative will have no individual liability to Parent under this Agreement arising from time to time, or if such Person resigns from its position the Equityholders’ Representative’s actions as the Equityholders’ Representative, then a successor . (d) Any Equityholders’ Representative may be appointed, resign at any time by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice delivered to the Advisory Group (as defined herein) and to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. If at any time there is no Person acting as the Equityholders’ Representative for any reason, Equityholders will promptly designate a new Person to act as the Equityholders’ Representative and notify Parent in writing of such determination. Following the time that Parent is notified that the Equityholders’ Representative has resigned and until such time as a new Person is designated to act as the Equityholders’ Representative as provided herein and Parent is so notified in writing, Equityholders will collectively act as the Equityholders’ Representative, with decisions made in the manner specified in Section 4.13(b). (be) Subject The initial Equityholders’ Representative identified in Section 4.13(a) above acknowledges it has carefully read and understands this Section 4.13, hereby accepts such appointment and designation, and represents that it will act in its capacity as the Equityholders’ Representative in compliance with and conformance to the Limits provisions of this Section 4.13. The Equityholders’ Representative shall be entitled to: (i) rely upon the Final Allocation Schedule, (ii) rely upon any signature believed by it to be genuine, and (iii) reasonably assume that a signatory has proper authorization to sign on Authority, all decisions and behalf of the applicable Equityholder or other party. All actions taken by the Equityholders’ Representative in accordance with under this Article IXAgreement, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, Equityholders’ Representative Engagement Agreement shall be binding upon all of the Equityholders each Equityholder and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no all defenses which may be available to any Equityholder shall have to contest, negate or disaffirm the right to objectaction of the Equityholders’ Representative taken in good faith under this Agreement, dissent, protest the Escrow Agreement or otherwise contest the sameEquityholders’ Representative Engagement Agreement are waived. (cf) Certain Equityholders have entered into an engagement agreement (the “Equityholders’ Representative Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Equityholders’ Representative Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither The Equityholders’ 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 the other Transaction Documents or the Equityholders’ Representative’s duties hereunder or thereunder, and neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have ), will incur any liability or obligation Liability to Equityholders and will be fully protected with respect to any of action taken, omitted or suffered by the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to Equityholders’ Representative in good faith under this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting Engagement Agreement or in good faith, without gross negligence or willful misconduct, and in accordance with the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence opinion of such good faith. counsel. (g) The Equityholders shall severally indemnify, defend and not jointly indemnify and defend hold harmless the Equityholders’ Representative Group from and hold the Equityholders’ Representative Group harmless against any damageand all losses, lossclaims, costdamages, liabilityliabilities, fees or 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 paid in settlementsettlement (collectively, the “Equityholders’ Representative Expenses”) incurred by without gross negligence or willful misconduct on the part of the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of its duties hereunder, under the Escrow Agreement or under the Equityholders’ Representative’s Representative Engagement Agreement. Any such Equityholders’ Representative Expenses incurred by the Equityholders’ Representative in connection with the performance of the applicable duties under this Agreement, the Escrow Agreement and or the Equityholders’ Representative Engagement Agreement (collectively, the “Representative Losses”), in each case as such Representative Loss is suffered or incurred, provided, that in the event that including any such Representative Loss is finally adjudicated to have been directly caused fees and expenses of legal counsel retained by the gross negligence, willful misconduct or bad faith Equityholders’ Representative) will not be the personal obligations of the Equityholders’ RepresentativeRepresentative but will be payable and will be promptly paid or reimbursed first, from the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligenceExpense Funds, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Indemnity Escrow Fund, Designated Escrow Fund Funds or Milestone Payment Earnout Payments otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the and thereafter by Equityholders, in accordance with each such Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwisePro Rata Portion thereof. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement, the Equityholders’ Representative Engagement Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (gh) The Equityholders’ Representative Expense Funds shall be entitled to: used (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses Equityholders’ Representative Expenses incurred pursuant to this Agreement, the Escrow Agreement, the Equityholders’ Representative Engagement Agreement and or any agreement ancillary hereto and other Transaction Document, or (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable shall have no responsibility or liability for any loss of principal of the Equityholders’ Representative Expense Fund Funds other than as a result of its gross negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcyfraud. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Equityholders’ Representative Expense Fund, Funds and has no tax Tax reporting or income distribution obligations. As promptly as reasonably practicable (and in The Equityholders will not receive any event within three (3) Business Days) following the reasonable determination by interest on the Equityholders’ Representative that Expense Funds and assign to the Expense Fund is no longer required Equityholders’ Representative any such interest. Subject to be withheldapproval of the Advisory Group, the Equityholders’ Representative may contribute funds to the Equityholders’ Representative Expense Funds from any consideration otherwise distributable to the Equityholders, and the Equityholders’ Representative shall deliver, or cause to be delivered, the amount distribute any funds remaining in the Equityholders’ Representative Expense Fund Funds to the Paying AgentAgent (and, with respect to amounts payable in respect of Company Options and Promised Option Units, to the Surviving Corporation for payment through its payroll system), as applicable, for further distribution to the Equityholders in accordance with such Equityholder’s Pro Rata Portion of such amount at such time as the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with Representative determines there are no further expenses of the Equityholders’ Representative with respect to facilitate its duties hereunder. (i) The Equityholders’ Representative shall not directly or indirectly use or disclose to another Person any Proprietary Information of or relating to Parent, or any Acquired Company received by the payment Equityholders’ Representative in connection with this Agreement, except in connection with evaluating or disputing the Final Closing Statement and discharging its duties under this Agreement. Confidential information shall not include information that: (i) enters the public domain through no fault of the Equityholders’ Representative or any portion of its Affiliates; (ii) was known to the Equityholders’ Representative prior to such disclosure; (iii) is independently developed by the Equityholders’ Representative without the use of such payment confidential information; (iv) becomes known to the Equityholders’ Representative on a non-confidential basis from a third party permitted to disclose such information; (v) is necessary to enforce or defend the Equityholders’ Representative’s or Equityholders rights under this Agreement or to defend any claim under this Agreement; or (vi) is required by legal process or other applicable Law to be disclosed. If the Equityholders’ Representative is required by legal process or other applicable Law to disclose such information, then the Equityholders’ Representative shall provide Parent notice thereof within a reasonable time before complying with the disclosure requirement so that is payable the Parent (or, if applicable, its Affiliate or an Acquired Company) may seek an appropriate protective Order, and the Equityholders’ Representative will reasonably cooperate, at Parent’s sole cost and expense, with the efforts of Parent (or, if applicable, its Affiliate or an Acquired Company) to Company Optionholders obtain the protective Order. Notwithstanding anything in this Agreement to the contrary, following Closing, the Equityholders’ Representative shall be permitted to disclose information to employees, advisors, agents or consultants of the Equityholders’ Representative and to Equityholders, in each case who have a need to know such information, provided that such Persons are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemconfidentiality obligations with respect thereto that are substantially similar to the confidentiality obligations including within this Section 4.13(i).

Appears in 1 contract

Sources: Merger Agreement (Hill-Rom Holdings, Inc.)

Equityholders’ Representative. (a) The Equityholders, by the approval and adoption of this Agreement and without any further action of any of the Equityholders or the Company, hereby appoint the Equityholders’ Representative as agent and attorney in fact for is hereby designated to act following the Company and each Equityholder, and authorize the Equityholders’ Representative (i) to take all action necessary to consummate the Merger and the other transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement of any claims for which the Equityholders may be required to indemnify Parent or any other Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, (v) consent or agree to, negotiate, enter into, or, if applicable, contest, prosecute or defend, settlements and compromises of, and demand arbitration and comply with Orders of courts and awards of arbitrators Closing with respect to, such claims, resolve any such claims, take any actions in connection with the resolution of any dispute relating to this Agreement, or the transactions contemplated by this Agreement, by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Equityholder or necessary in the judgment of the Equityholders’ Representative for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of issues arising under this Agreement or and, to the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or the Stockholder Related Agreements (other than the Non-Competition Agreements), provided that the Equityholders’ Representative shall not be authorized to (1) receive notice of, or take action on behalf of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoingextent set forth herein, the Equityholders’ Representative shall take, and is hereby authorized to take, any and all actions that he believes are necessary or appropriate under this Agreement as permitted above, as fully as if the Equityholders were acting on their own behalf and with the same force and effect, including, without limitation, by: i. Consenting to, compromising or settling any and all claims arising under this Agreement; ii. Conducting negotiations with the Purchaser and its representatives regarding such claims; iii. Performing all of his obligations under this Agreement; iv. Waiving, modifying, amending or supplementing provisions of this Agreement and the obligations of the Purchaser hereunder; v. Taking any and all other actions specified in or contemplated by this Agreement; and vi. Engaging counsel, accountants or other representatives in connection with the foregoing matters. The Purchaser shall have no obligation the right to act on behalf rely upon all actions taken or omitted to be taken by either one of the individuals acting as the Equityholders’ Representative in respect of this Agreement and the transactions contemplated hereby, all of which actions or omissions shall be legally binding upon the Equityholders, except as expressly provided herein and the Purchaser shall not be liable for any action taken or not taken in good faith reliance on a communication or other instruction from the Escrow Agreement, Equityholders’ Representative. (b) Under no circumstances shall the Engagement Agreement, and Equityholders’ Representative have any liability to any Equityholder for purposes of clarity, there are no obligations any act or omission to act of the Equityholders’ Representative in any ancillary agreementsuch capacity, schedule, exhibit or unless the Disclosure Schedule. The Person serving as party asserting such liability is able to prove that the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders was guilty of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. (b) Subject to the Limits on Authority, all decisions and actions taken by the Equityholders’ Representative in accordance with this Article IX, including without limitation (i) agreements between the Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified in writing by such Equityholder, and no Equityholder shall have the right to object, dissent, protest or otherwise contest the same. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge that the Equityholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority on behalf of each Equityholder to take any and all actions on behalf of, execute any and all instruments on behalf of, and execute or waive any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent shall be entitled to rely conclusively on the instructions and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement and any Stockholder Related Agreement (other than the Non-Competition Agreements), and no Equityholder shall have any cause of action against Parent for any action taken by Parent in reliance upon the instructions or decisions of the Equityholders’ Representative; (ii) all actions, decisions and instructions of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon the Company and all of the Equityholders and no Equityholder shall have any cause of action against the Equityholders’ Representative for any action taken, decision made or instruction given by the Equityholders’ Representative under this Agreement or the Escrow Agreement except for fraud, gross negligence, willful misconduct or bad faith by the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement shall be binding upon the executors, heirs, legal Representatives, personal Representatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholder, and any reference in this Agreement or the Escrow Agreement to an Equityholder or the Equityholders shall mean and include the successors to the rights of the Equityholders under this Agreement, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers, immunities and rights to indemnification granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow Fund. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheetto payment of or reimbursement for any and all costs and expenses incurred in connection with, (ii) rely upon arising out of, resulting from or incident to any signature believed by it act or omission to be genuine, and (iii) reasonably assume that a signatory has proper authorization to sign on behalf act of the applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant in his capacity as such, except to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined extent caused by the Advisory Groupgross negligence or willful misconduct of the Equityholders’ Representative. The Equityholders will not receive any interest or earnings on Such costs and expenses shall be paid solely out of the Expense Fund and irrevocably transfer and assign to Holdback as contemplated herein. (c) If at any time the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative his successor is not providing any investment supervision, recommendations unwilling or advice and will not be liable for any loss of principal of the Expense Fund other than unable to serve as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheldRepresentative, the a new Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the promptly designated. The new Equityholders’ Representative shall be designated by the approval of Stockholders who collectively held at least a majority of Threewide’s Series C Preferred Stock outstanding immediately prior to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll systemClosing.

Appears in 1 contract

Sources: Merger Agreement (Move Inc)

Equityholders’ Representative. (a) The By the execution and delivery of this Agreement, including counterparts hereof, each Seller hereby irrevocably constitutes and appoints ▇▇▇▇ ▇▇▇▇▇▇▇▇ as the true and lawful agent and attorney-in-fact (the “Equityholders’ Representative”) of such Seller with full powers of substitution to act in the name, by place and stead of such Seller with respect to the approval performance on behalf of such Seller under the terms and adoption provisions of this Agreement and without any the Escrow Agreement, as the same may be from time to time amended, and to do or refrain from doing all such further action of any of the Equityholders or the Companyacts and things, hereby appoint and to execute all such documents on such Seller’s behalf, as the Equityholders’ Representative shall deem necessary or appropriate in connection with any of the transactions contemplated under this Agreement or the Escrow Agreement, including: (i) to receive all payments (A) made by Purchaser to such Seller under this Agreement and (B) required to be made to such Seller upon release of the funds held in the Indemnification Escrow Account; (ii) to agree upon or compromise any matter related to the calculation of any adjustments to the Initial Purchase Price pursuant to Section 2.3 or otherwise or to other payments to be made; (iii) to act for such Seller with respect to all indemnification matters referred to in this Agreement and the Escrow Agreement, including the right to compromise on behalf of such Seller any indemnification claim made by or against such Seller; (iv) to act for such Seller with respect to all post-Closing matters; (v) to terminate, amend, or waive any provision of this Agreement and the Escrow Agreement in accordance with Section 12.6 and Section 12.7 hereof, as agent applicable (and attorney Section 12 of the Escrow Agreement); (vi) to employ and obtain the advice of legal counsel, accountants and other professional advisors as the Equityholders’ Representative, in fact for his, her or its sole discretion, deems necessary or advisable in the Company and each Equityholderperformance of his, and authorize her or its duties as the Equityholders’ Representative and to rely on their advice and counsel; (ivii) to take all action necessary incur and pay out of the Initial Purchase Price and/or any subsequent payments due to consummate such Seller (including, without limitation, out of payments due to such Seller upon release of the Merger and funds held in the other Indemnification Escrow Account) (1) expenses in connection with the transactions contemplated by this Agreement and the Escrow Agreement, or the defense and/or settlement including fees of any claims for which the Equityholders may be required to indemnify Parent or brokers, attorneys and accountants, and any other fees and expenses allocable or in any way relating to such transactions or (2) any indemnification claim made by any of the Purchaser Indemnified Party pursuant to Article VIII, (ii) to give and receive all notices required to be given to Parties or by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Stockholder Related Agreements, (iii) to review, negotiate and authorize delivery to Parent of the General Escrow Property and the Designated Escrow Property in satisfaction of claims by Parent and set off of Milestone Payments pursuant to Section 8.6, (iv) object to such claims pursuant to this Agreement, whether such expenses, fees or indemnification claims are incurred prior or subsequent to Closing; (vviii) consent to retain a portion of the Initial Purchase Price and/or any subsequent payments due to such Seller as a reserve against the payment of expenses incurred in his capacity as Equityholders’ Representative; and (ix) to do or agree to, negotiate, enter into, or, if applicable, contest, prosecute refrain from doing any further act or defend, settlements and compromises of, and demand arbitration and comply with Orders deed on behalf of courts and awards of arbitrators with respect to, such claims, resolve any such claims, take any actions Seller which the Equityholders’ Representative deems necessary or appropriate in connection with the resolution of any dispute his sole discretion relating to the subject matter of this Agreement, Agreement and the Escrow Agreement (including amending or the transactions contemplated by this Agreement, by arbitration, settlement waiving any term or otherwise, provision hereof or thereof) as fully and take or forego completely as any or all actions permitted or required of any Equityholder or necessary in the judgment such Seller could do if personally present and acting. (b) The appointment of the Equityholders’ Representative shall be deemed coupled with an interest and shall be irrevocable, and any other person may conclusively and absolutely rely, without inquiry, upon any actions of the Equityholders’ Representative as the acts of the Sellers in all matters referred to in this Agreement and the Escrow Agreement. Each of the Sellers hereby ratifies and confirms all that the Equityholders’ Representative shall do or cause to be done by virtue of the appointment of the Equityholders’ Representative as Equityholders’ Representative of such Seller. The Equityholders’ Representative shall act for the accomplishment of the foregoing and Sellers on all of the other terms, conditions and limitations of this Agreement, (vi) consult with legal counsel, independent public accountants and other experts selected by it, solely at the cost and expense of the Equityholders and (vii) to make decisions on behalf of the Equityholders and take any and all additional action as is contemplated to be taken by or on behalf of the Equityholders by the terms of matters set forth in this Agreement or the Escrow Agreement, including, without limitation regarding (A) indemnification claims, Direct Claims, Third-Party Claims, Notices of Third-Party Claims and Notices of Direct Claims and (B) amendments to this Agreement, the Escrow Agreement or in the Stockholder Related Agreements (other than manner the Non-Competition Agreements)Equityholders’ Representative believes to be in the best interest of the Sellers, provided that but the Equityholders’ Representative shall not be authorized responsible to (1) receive notice of, any such Seller for any loss or take action on behalf damage any such Seller may suffer by reason of the applicable Indemnifying Party in the event that recourse is being sought hereunder directly from such Indemnifying Party, (2) agree to make any Indemnifying Party directly liable for any Losses in respect of a claim for indemnification that is being sought hereunder directly from such Indemnifying Party or (3) treat any of the Equityholders in a manner that is different or disproportionate from one another (the “Limits on Authority”). Notwithstanding the foregoing, performance by the Equityholders’ Representative shall have no obligation to act on behalf of the Equityholders, except as expressly provided herein and in the Escrow Agreement, the Engagement Agreement, and for purposes of clarity, there are no obligations of the Equityholders’ Representative in any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The Person serving as the Equityholders’ Representative may be removed or replaced from time to time, or if such Person resigns from its position as the Equityholders’ Representative, then a successor may be appointed, by the holders of a majority in interest of the aggregate value of property then held in the General Escrow Fund upon not less than thirty (30) days’ prior written notice to Parent. The immunities and rights to indemnification shall survive the resignation or removal of the Equityholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of his duties under this Agreement and the Escrow Agreement. (b) Subject to , other than loss or damage arising from willful misconduct in the Limits on Authority, all decisions and actions taken by performance of such duties. In no event shall the Equityholders’ Representative be liable hereunder or in accordance with this Article IXconnection herewith for any indirect, including without limitation (i) agreements between the punitive, exemplary, special, incidental or consequential damages. The Equityholders’ Representative and Parent relating to the defense or settlement of claims for which the Equityholders may be required to indemnify Parent pursuant to Article VIII and (ii) agreements between the Equityholders’ Representative and Parent relating to the Escrow Agreement or the determination of Parent’s payment obligations under Section 1.5 or Section 1.13 or any other matter relating to Article I, shall be binding fully protected against the Sellers in relying upon all of the Equityholders and each such Equityholder’s successors as if expressly confirmed and ratified any written notice, demand, certificate or document that he in writing by such Equityholdergood faith believes to be genuine, and no Equityholder shall have the right to object, dissent, protest including facsimiles or otherwise contest the samecopies thereof. (c) Certain Equityholders have entered into an engagement agreement (the “Engagement Agreement”) with the Equityholders’ Representative to provide direction to the Equityholders’ Representative in connection with its services under this Agreement, the Escrow Agreement Each Seller hereby expressly acknowledges and the Engagement Agreement (such Equityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Equityholders’ Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the “Equityholders’ Representative Group”) shall have any liability or obligation to any of the parties to this Agreement or to the Equityholders for any act done or omitted pursuant to this Agreement, the Escrow Agreement or the Engagement Agreement as the Equityholders’ Representative while acting in good faith, without gross negligence or willful misconduct, and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith. The Equityholders shall severally and not jointly indemnify and defend the Equityholders’ Representative Group and hold the Equityholders’ Representative Group harmless against any damage, loss, cost, liability, fees or expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers, judgments, fines or amounts paid in settlement) incurred by the Equityholders’ Representative and arising out of or in connection with the acceptance or administration of the Equityholders’ Representative’s duties under this Agreement, the Escrow Agreement and the Engagement Agreement (collectively, the “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 gross negligence, willful misconduct or bad faith of the Equityholders’ Representative, the Equityholders’ Representative will reimburse the Equityholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, willful misconduct or bad faith. If not paid directly to the Equityholders’ Representative by the Equityholders, any such Representative Losses may be recovered by the Equityholders’ Representative first from the Expense Fund, and second, from any distribution of the General Escrow Fund, Designated Escrow Fund or Milestone Payment otherwise distributable to the Equityholders at the time of distribution; provided, that while this section allows the Equityholders’ Representative to be paid from the Expense Fund, General Escrow Fund, Designated Escrow Fund or Milestone Payment, as the case may be, this does not relieve the Equityholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Equityholders’ Representative from seeking any remedies available to it at law or otherwise. The Equityholders acknowledge agrees that the Equityholders’ Representative shall not be required is authorized to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Equityholders’ Representative shall not be required to take any action unless the Equityholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Equityholders’ Representative against the costs, expenses and liabilities which may be incurred by the Equityholders’ Representative in performing such actions. (d) Subject to the Limits on Authority, the Equityholders’ Representative shall have full power and authority act on behalf of each Equityholder to take such Seller notwithstanding any and all actions on behalf of, execute any and all instruments on behalf ofdispute or disagreement among the Sellers, and execute or waive that any and all rights of, the Equityholders under this Agreement, the Escrow Agreement and the Stockholder Related Agreements (other than the Non-Competition Agreements). (e) The Equityholders, by approval and adoption of this Agreement, agree, in addition to the foregoing, and solely to the extent consistent with Section 9.1(a), that: (i) Parent Person shall be entitled to rely conclusively on the instructions any and decisions of the Equityholders’ Representative as to (A) the settlement of any claims for indemnification by Parent pursuant to Article VIII, (B) actions taken in respect of indemnification claims, Direct Claims, Third-Party Claims and Notices of Claims, and (C) any other actions required or permitted to be all action taken by the Equityholders’ Representative under this AgreementAgreement without liability to, or obligation to inquire of, any of the Escrow Agreement and any Stockholder Related Agreement (other than Sellers. The Equityholders’ Representative may be removed from time to time by the Non-Competition Agreements)Sellers that held at least a majority of the Equity Interests immediately prior to the Closing, and no Equityholder shall have any cause the Equityholders’ Representative may resign by giving written notice to the Sellers and the Purchaser. If the Equityholders’ Representative is so removed, dies, becomes disabled, resigns or otherwise is unable to fulfill his responsibilities as agent of action against Parent for any action taken by Parent the Sellers, or there is a vacancy in reliance upon the instructions or decisions position of the Equityholders’ Representative; (ii) all actions, decisions and instructions then the Sellers that held a majority of the Equityholders’ Representative taken in accordance with this Article IX shall be conclusive and binding upon Equity Interests immediately prior to the Company and all of the Equityholders and no Equityholder shall have any Closing shall, within ten (10) Business Days after such removal, death, disability, resignation or other cause of action against such vacancy, appoint a successor representative reasonably satisfactory to Purchaser. Any successor shall become the Equityholders’ Representative for any action takenpurposes of the Escrow Agreement and this Agreement, decision made or instruction given and each successor Equityholders’ Representative shall have all of the power, authority, rights and privileges conferred by this Agreement upon the original Equityholders’ Representative. No bond shall be required of the Equityholders’ Representative, and the Equityholders’ Representative shall not receive any compensation for its services. The Sellers do hereby jointly and severally agree to indemnify and hold the Equityholders’ Representative harmless from and against any and all liability, loss, cost, damage or expense (including without limitation reasonable attorneys’ fees) reasonably incurred or suffered as a result of the performance of such Equityholders’ Representative’s duties under this Agreement or and the Escrow Agreement except for fraud, gross negligence, any such liability arising out of the willful misconduct or bad faith by of the Equityholders’ Representative in connection with the matters described in this Article IX; (iii) the Representative. The provisions of this Article IX are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Equityholder may have in connection with the transactions contemplated by this Agreement, the Escrow Agreement and the Stockholder Related Agreements; and (iv) the provisions of this Article IX and all actions taken by the Equityholders’ Representative under this Agreement, the Escrow Agreement or the Engagement Agreement Section 12.2 shall be binding upon the executors, heirs, legal Representativesrepresentatives, personal Representativesrepresentatives, successor trustees and successors of each Equityholder as if expressly confirmed and ratified in writing by such Equityholderof the Sellers, and any reference references in this Agreement or the Escrow Agreement Section 12.2 to an Equityholder or the Equityholders a Seller shall mean and include the successors to the rights of the Equityholders under this AgreementSellers hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise. (f) The powers. All of the indemnities, immunities immunities, releases and rights to indemnification powers granted to the Equityholders’ Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Equityholder and shall be binding on any successor thereto, and (ii) under this Agreement shall survive the delivery of an assignment by any Equityholder of the whole or any fraction of his, her or its interest in the General Escrow FundClosing. (g) The Equityholders’ Representative shall be entitled to: (i) rely upon the Closing Spreadsheet, (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 applicable Equityholder or other party. (h) The Expense Fund will be used for the purposes of (i) paying directly or reimbursing the Equityholders’ Representative for any third-party expenses pursuant to this Agreement, the Escrow Agreement, the Engagement Agreement and any agreement ancillary hereto and (ii) as otherwise determined by the Advisory Group. The Equityholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Equityholders’ Representative any ownership right that they may otherwise have had in any such interest or earnings. The Equityholders’ Representative is not providing any investment supervision, recommendations or advice and will not be liable for any loss of principal of the Expense Fund other than as a result of its negligence, willful misconduct or bad faith. The Equityholders’ Representative will hold these funds separate from its corporate funds and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The Equityholders’ Representative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, and has no tax reporting or income distribution obligations. As promptly as reasonably practicable (and in any event within three (3) Business Days) following the reasonable determination by the Equityholders’ Representative that the Expense Fund is no longer required to be withheld, the Equityholders’ Representative shall deliver, or cause to be delivered, the amount remaining in the Expense Fund to the Paying Agent, for further distribution to the Equityholders in accordance with the allocations provided in Section 1.13(b), provided, that Parent shall reasonably cooperate with the Equityholders’ Representative to facilitate the payment of any portion of such payment that is payable to Company Optionholders who are current or former employees and subject to Tax withholding through Parent’s or its Affiliate’s payroll system.

Appears in 1 contract

Sources: Equity Purchase Agreement (Gsi Group Inc)