Securityholder Representative. (a) By the adoption of the Merger, and by receiving the benefits thereof, including any consideration payable hereunder, each Holder shall be deemed to have approved and irrevocably appointed Shareholder Representative Services LLC as of the Closing as the representative, agent, proxy, and attorney-in-fact for all of the Holders for all purposes under this Agreement including the full power and authority on the Holders’ behalf: (i) to consummate the Transactions and the other agreements, instruments and documents contemplated hereby or executed in connection herewith; (ii) to negotiate and settle disputes arising under, or relating to, this Agreement and the other agreements, instruments and documents contemplated hereby or executed in connection herewith; (iii) to facilitate the disbursement to the Holders of any funds due to the Holders under this Agreement or otherwise; (iv) to satisfy any and all obligations or liabilities incurred by the Securityholder Representative in the performance of its duties hereunder; (v) make or direct payments of funds from the Securityholder Representative Reserve Fund Amount; (vi) to execute and deliver any amendment or waiver to this Agreement and the other agreements, instruments and documents contemplated hereby or executed in connection herewith (without the prior approval of the Holders); (vii) to give any written direction to the Escrow Agent or Paying Agent; and (viii) to take all other actions to be taken by or on behalf of the Holders in connection with this Agreement and the other agreements, instruments and documents contemplated hereby or executed in connection herewith. The Holders, by approving this Agreement (whether by vote or by execution of a Letter of Transmittal or acceptance of any consideration pursuant to this Agreement), further agree that such agency and proxy are coupled with an interest, are therefore irrevocable without the consent of the Securityholder Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of any Holder. All decisions and actions by the Securityholder Representative shall be binding upon all of the Holders and no Holder shall have the right to object, dissent, protest or otherwise contest the same. The Securityholder Representative shall not have the authority to increase the liability of any Holder on a non pro rata basis. If an allocation is not otherwise provided for in this Agreement, the Securityholder Representative shall facilitate the distribution of funds to the Paying Agent for further distribution to the Stockholders and Non-Employee Optionholders in accordance with the Allocation Certificate, and, with respect to Employee Optionholders, the Securityholder Representative shall facilitate the distribution of funds to the Surviving Corporation in accordance with the Allocation Certificate (for further payment to the Employee Optionholders). Parent may conclusively rely, without independent verification or investigation, upon any such decision or action of the Securityholder Representative as being the binding decision or action of every Holder, and Parent shall not be liable to any Holder or any other Persons for any actions taken or omitted from being taken by them or by Parent in accordance with or reliance upon any such decision or action of the Securityholder Representative. The Securityholder Representative shall have no duties or obligations to the Holders hereunder, except as expressly set forth in this Agreement. (b) The Holders shall indemnify, defend and hold harmless the Securityholder Representative against any reasonable, documented, and out-of-pocket losses, liabilities and expenses (“Representative Losses”) arising out of or in connection with this Agreement and 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 caused by the fraud, gross negligence or willful misconduct of the Securityholder Representative, the Securityholder Representative will reimburse the Holders the amount of such indemnified Representative Loss to the extent attributable to such fraud, gross negligence or willful misconduct. Representative Losses may be recovered by the Securityholder Representative from (i) the Securityholder Representative Reserve Fund Amount and (ii) any other funds that become payable to the Holders under this Agreement at such time as such amounts would otherwise be distributable to the Holders; provided that while the Securityholder Representative may be paid from the aforementioned sources of funds, this does not relieve the Holders from their obligation to promptly pay such Representative Losses as they are suffered or incurred. The Securityholder Representative may, upon receipt of a claim notice or similar that is reasonably likely to give rise to a Representative Loss (as determined in reasonable good faith by the Securityholder Representative), withhold from any distribution of the Securityholder Representative Reserve Fund Amount an amount as may be reasonably expected to cover such Representative Loss until such matter is resolved. In no event will the Securityholder Representative be required to advance its own funds on behalf of the Holders or otherwise. Notwithstanding anything in this Agreement to the contrary, any restrictions or limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-parties otherwise applicable to, the Holders set forth elsewhere in this Agreement are not intended to be applicable to the indemnities provided to the Securityholder Representative hereunder. The foregoing indemnities will survive the Closing, the resignation or removal of the Securityholder Representative or the termination of this Agreement. The Securityholder 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. (c) Neither the Securityholder Representative nor any of its members, managers, officers, agents or other representatives shall incur any liability to any Holder by virtue of the failure or refusal of such Persons for any reason to consummate the Transactions or relating to the performance of their duties hereunder, except for actions or omissions constituting bad faith or willful misconduct. The Securityholder Representative and its members, managers, officers, agents and other representatives shall have no liability in respect of any Proceeding brought against such Persons by any Holder, regardless of the legal theory under which such liability or obligation may be sought to be imposed, whether sounding in contract or tort, or whether at law or in equity, or otherwise, unless such Persons took or omitted taking any action in bad faith or as a result of willful misconduct. (d) In furtherance of, and without limiting any rights of the Securityholder Representative set forth in, Section 10.19(a)(iv), Section 10.19(a)(v), Section 10.19(b) and Section 10.19(d), the Holders hereby authorize the withholding of the Securityholder Representative Reserve Fund Amount in connection with the allocation and distribution of the Estimated Merger Consideration in accordance with Article II to satisfy potential future obligations of the Holders and expenses incurred by the Securityholder Representative in connection with performing its obligations under this Agreement, the Paying Agent Agreement and the Escrow Agreement. (e) Following the Closing Date, the holders of at least a majority of the outstanding Company Stock (on an as-converted basis) immediately prior to the Effective Time entitled to vote (the “Majority-In-Interest”) may, by written consent, appoint a new representative as the Securityholder Representative. N▇▇▇▇▇, together with a copy of the written consent appointing such new representative and bearing the signatures of the Majority-In-Interest, must be delivered to Parent not less than ten (10) days prior to such appointment. Such appointment will be effective upon the later of the date indicated in the consent or the date such consent is received by Parent. (f) The Securityholder Representative represents and warrants to each other party hereto that: (i) the Securityholder 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 and authority to execute, deliver and perform this Agreement; and (ii) the execution, delivery and performance of this Agreement by the Securityholder Representative (A) has been duly and validly authorized by all necessary action of the Securityholder Representative, its managers, directors, members, partners, officers or equityholders (as applicable) and (B) does not conflict with the organizational documents of the Securityholder Representative or conflict with or result in the breach of, or constitute a default under, any material contract to which the Securityholder Representative is bound; and (iii) this Agreement is a legal, valid and binding obligation of the Securityholder Representative, enforceable against it in accordance with its terms, subject to the laws of agency. (g) The Securityholder Representative may resign at any time. In the event that the Securityholder Representative becomes unable or unwilling to continue in its capacity as Securityholder Representative, or if the Securityholder Representative resigns as the Securityholder Representative, the Majority-In-Interest may by written consent appoint a new representative as the Securityholder Representative. Notice and a copy of the written consent appointing such new representative and bearing the signatures of the Majority-In-Interest must be delivered to Parent. Such appointment will be effective upon the later of the date indicated in the consent or the date such consent is received by Parent.
Appears in 1 contract
Sources: Merger Agreement (CareDx, Inc.)
Securityholder Representative. (a) By the adoption of the MergerEach Supporting Shareholder and each Person party to a Joinder Agreement hereby appoints, and by receiving pursuant to the benefits thereof, including any consideration payable hereunderPlan of Arrangement, each Holder other Company Securityholder shall be deemed to have approved and irrevocably appointed Shareholder Representative Services appointed, Fortis Advisors LLC as its agent, proxy and attorney-in-fact, with full power of substitution, to act on behalf of the Closing Company Securityholders for certain limited purposes, as specified herein (the representative“Securityholder Representative”), agentincluding the full power and authority to act on the Company Securityholders’ behalf as provided in Section 2.17(b). Such agency, proxy, proxy and attorney-in-fact for all of the Holders for all purposes under this Agreement including the full power and authority on the Holders’ behalf: (i) to consummate the Transactions and the other agreements, instruments and documents contemplated hereby or executed in connection herewith; (ii) to negotiate and settle disputes arising under, or relating to, this Agreement and the other agreements, instruments and documents contemplated hereby or executed in connection herewith; (iii) to facilitate the disbursement to the Holders of any funds due to the Holders under this Agreement or otherwise; (iv) to satisfy any and all obligations or liabilities incurred by the Securityholder Representative in the performance of its duties hereunder; (v) make or direct payments of funds from the Securityholder Representative Reserve Fund Amount; (vi) to execute and deliver any amendment or waiver to this Agreement and the other agreements, instruments and documents contemplated hereby or executed in connection herewith (without the prior approval of the Holders); (vii) to give any written direction to the Escrow Agent or Paying Agent; and (viii) to take all other actions to be taken by or on behalf of the Holders in connection with this Agreement and the other agreements, instruments and documents contemplated hereby or executed in connection herewith. The Holders, by approving this Agreement (whether by vote or by execution of a Letter of Transmittal or acceptance of any consideration pursuant to this Agreement), further agree that such agency and proxy are coupled with an interest, are therefore irrevocable without the consent of the Securityholder Representative Representative, except as provided in Section 2.17(d), and shall survive be binding upon the heirs, executors, administrators, legal representatives, successors and permitted assigns of each Company Securityholder and shall not be affected by, and shall survive, the death, incapacity, bankruptcy, dissolution or liquidation of any HolderCompany Securityholder. All decisions decisions, actions, consents and actions instructions by the Securityholder Representative shall be binding upon all of the Holders Company Securityholders, and no Holder Company Securityholder shall have the right to objectobject to, dissentdissent from, protest or otherwise contest the same. The Securityholder Representative shall not have the authority to increase the liability of any Holder on a non pro rata basis. If an allocation is not otherwise provided for in this Agreementsuch decision, the Securityholder Representative shall facilitate the distribution of funds to the Paying Agent for further distribution to the Stockholders and Non-Employee Optionholders in accordance with the Allocation Certificateaction, and, with respect to Employee Optionholders, the Securityholder Representative shall facilitate the distribution of funds to the Surviving Corporation in accordance with the Allocation Certificate (for further payment to the Employee Optionholders)consent or instruction. Parent may conclusively relyand Sub shall be entitled to rely on any decision, without independent verification action, consent or investigation, upon any such decision or action instruction of the Securityholder Representative as being the binding decision decision, action, consent or action instruction of every Holderthe Company Securityholders, and Parent shall not be liable and Sub are hereby relieved from any liability to any Holder Person for acts done by them in reliance thereon.
(b) The Securityholder Representative shall have such powers and authority as are necessary to carry out the functions assigned to him, her or it under this Agreement. Without limiting the generality of the foregoing, the Securityholder Representative shall have full power, authority and discretion to: (i) consummate the Transactions; (ii) negotiate disputes arising under, or relating to, this Agreement, the Plan of Arrangement and the Ancillary Agreements to which it will be a party (including pursuant to Article IX); (iii) authorize disbursement to the Company Securityholders of any funds, shares of Parent Common Stock or other Persons for Parent securities received on behalf of the Company Securityholder under this Agreement, the Plan of Arrangement or the Ancillary Agreements to which it will be a party (including pursuant to Section 2.11(e), Section 2.12(e) or Article IX); (iv) authorize the withholding of any amounts received by the Company Securityholders under this Agreement or otherwise to satisfy any and all obligations or liabilities incurred by the Company Securityholders or the Securityholder Representative in the performance of their duties hereunder (including pursuant to this Section 2.17 and Article IX); (v) execute and deliver any amendment or waiver to this Agreement and the Ancillary Agreements to which it will be a party (without the prior approval of the Company Securityholders) other than with respect to this Section 2.17; and (vi) take all other actions taken or omitted from being to be taken by them or by Parent in accordance with or reliance upon any such decision or action on behalf of the Securityholder RepresentativeCompany Securityholders in connection with this Agreement (including pursuant to Article IX) and the Ancillary Agreements to which it will be a party. The Securityholder Representative shall have no duties or obligations hereunder, including any fiduciary duties, except those set forth herein, and such duties and obligations shall be determined solely by the express provisions of this Agreement. The Securityholder Representative shall be entitled to: (i) rely upon the Consideration 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 Company Securityholder or other party. The powers, immunities and rights to indemnification granted to the Holders Securityholder Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, except as expressly set forth incompetence, bankruptcy, dissolution or liquidation of the respective Company Securityholder and shall be binding on any heirs, executors, administrators, legal representatives, successors and permitted assigns of each Company Securityholder; and (ii) shall survive the delivery of an assignment by any Company Securityholder of the whole or any fraction of his, her or its interest in this Agreementthe Indemnity Escrow Fund.
(bc) The Holders shall indemnify, defend and hold harmless power of attorney granted by each Company Securityholder to the Securityholder Representative against is not intended to be a continuing power of attorney within the meaning of and governed by the Substitute Decisions Act (Ontario), or any reasonable, documentedsimilar power of attorney under equivalent legislation in any of the provinces or territories of Canada (a “CPOA”). The execution of this Agreement and/or approval of the Arrangement Resolution by a Company Securityholder shall not terminate any such CPOA granted by such Company Securityholder previously and shall not be terminated by the execution by such Company Securityholder in the future of a CPOA, and out-of-pocket losses, liabilities and expenses (“Representative Losses”) arising out of or in connection with this Agreement and each Company Securityholder hereby agrees not to take any related agreements, in each case as such Representative Loss is suffered or incurred; provided that action in the event that future which results in the termination of the power of attorney granted hereby.
(d) The Securityholder Representative may resign at any such Representative Loss is finally adjudicated to have been caused time, and may be removed for any reason or no reason by the fraudvote or written consent of Selling Shareholders holding a majority of the Company Shares as of the Closing Time on an as converted to Common Share basis (the “Majority Securityholders”), gross negligence with the prior consent of Parent, not to be unreasonably withheld. In the event of the death, incapacity, resignation or willful misconduct removal of the Securityholder Representative, the a new Securityholder Representative will reimburse shall be appointed by the Holders vote or written consent of the amount Majority Securityholders, with the prior consent of Parent, not to be unreasonably withheld. Notice of such indemnified Representative Loss to vote or a copy of the extent attributable to written consent appointing such fraud, gross negligence or willful misconduct. Representative Losses may be recovered by the new Securityholder Representative from (i) shall be sent to Parent, such appointment to be effective upon the later of the date indicated in such consent or the date such consent is received by Parent; provided, that until such notice is received, Parent and Sub shall be entitled to rely on the decisions, actions, consents and instructions of the prior Securityholder Representative Reserve Fund Amount and (ii) any other funds that become payable to the Holders under this Agreement at such time as such amounts would otherwise be distributable to the Holders; provided that while the Securityholder Representative may be paid from the aforementioned sources of funds, this does not relieve the Holders from their obligation to promptly pay such Representative Losses as they are suffered or incurreddescribed in Section 2.17(a). The Securityholder Representative may, upon receipt of a claim notice or similar that is reasonably likely immunities and rights to give rise to a Representative Loss (as determined indemnification set out in reasonable good faith by the Securityholder Representative), withhold from any distribution of the Securityholder Representative Reserve Fund Amount an amount as may be reasonably expected to cover such Representative Loss until such matter is resolved. In no event will the Securityholder Representative be required to advance its own funds on behalf of the Holders or otherwise. Notwithstanding anything in this Agreement to the contrary, any restrictions or limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-parties otherwise applicable to, the Holders set forth elsewhere in this Agreement are not intended to be applicable to the indemnities provided to the Securityholder Representative hereunder. The foregoing indemnities will Section 2.17(e) shall survive the Closing, the resignation or removal of the Securityholder Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement. The Securityholder 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.
(c) Neither the Securityholder Representative nor any of its members, managers, officers, agents or other representatives shall incur any liability to any Holder by virtue of the failure or refusal of such Persons for any reason to consummate the Transactions or relating to the performance of their duties hereunder, except for actions or omissions constituting bad faith or willful misconduct. The Securityholder Representative and its members, managers, officers, agents and other representatives shall have no liability in respect of any Proceeding brought against such Persons by any Holder, regardless of the legal theory under which such liability or obligation may be sought to be imposed, whether sounding in contract or tort, or whether at law or in equity, or otherwise, unless such Persons took or omitted taking any action in bad faith or as a result of willful misconduct.
(d) In furtherance of, and without limiting any rights of the Securityholder Representative set forth in, Section 10.19(a)(iv), Section 10.19(a)(v), Section 10.19(b) and Section 10.19(d), the Holders hereby authorize the withholding of the Securityholder Representative Reserve Fund Amount in connection with the allocation and distribution of the Estimated Merger Consideration in accordance with Article II to satisfy potential future obligations of the Holders and expenses incurred by the Securityholder Representative in connection with performing its obligations under this Agreement, the Paying Agent Agreement and the Escrow Agreement.
(e) Following Certain Company Securityholders have entered into an engagement agreement with the Closing DateSecurityholder Representative to provide direction to the Securityholder Representative in connection with the performance of its services under this Agreement and the Escrow Agreement (such Company Securityholders, including their individual representatives, collectively hereinafter referred to as the “Advisory Group”). Neither the Securityholder Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the holders “Securityholder Representative Group”), shall be liable to any Company Securityholders for any losses arising out of at least a majority or in connection with the acceptance or administration of the outstanding Company Stock (Securityholder Representative’s duties hereunder or under any Securityholder Representative engagement agreement absent gross negligence or willful misconduct on an as-converted basis) immediately prior to the Effective Time entitled to vote (the “Majority-In-Interest”) may, by written consent, appoint a new representative as part of the Securityholder Representative. N▇▇▇▇▇, together with a copy By virtue of the written consent appointing such new representative Arrangement and/or the Joinder Agreements, each Company Securityholder, severally but not jointly, shall be deemed to have agreed to indemnify, defend and bearing hold harmless the signatures Securityholder Representative Group from and against any losses, liabilities, damages, claims, costs, fees, amounts paid in settlement expenses (including reasonable legal fees and costs of other skilled professionals and in connection with seeking recovery from insurers), judgments, fines and amounts incurred by the Securityholder Representative Group arising out of actions taken or omitted to be taken in the Securityholder Representative’s capacity as the Securityholder Representative (except for those arising out of the Majority-In-InterestSecurityholder Representative’s gross negligence or willful misconduct), must be delivered to Parent not less than ten including the costs and expenses of investigation and defense of claims (10) days prior to such appointmentcollectively, the “Securityholder Representative Expenses”). Such appointment will Securityholder Representative Expenses may be effective upon recovered first, from the later Expense Fund, second, from any distribution of the date indicated Indemnity Escrow Fund or Contingent Amount otherwise distributable to the Selling Shareholders at the time of distribution, and third, directly from the Selling Shareholders. The Company Securityholders acknowledge that the Securityholder Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the consent exercise or the date such consent is received by Parentperformance of any of its powers, rights, duties or privileges or administration of its duties.
(f) The Securityholder Representative represents Prior to Closing, the Company and warrants to each other party hereto that: (i) the Securityholder Representative will agree upon an amount (Athe “Expense Fund Amount”) 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 and authority to execute, deliver and perform this Agreement; and (ii) the execution, delivery and performance of this Agreement be held by the Securityholder Representative (A) has been duly and validly authorized for the purposes described below. The Expense Fund Amount shall be held by all necessary action of the Securityholder Representative, its managers, directors, members, partners, officers or equityholders (as applicable) and (B) does not conflict with the organizational documents of the Securityholder Representative or conflict with or result as agent and for the benefit of the Company Securityholders in a segregated client account and shall be used for the breach ofpurposes of paying directly, or constitute a default under, any material contract to which reimbursing the Securityholder Representative for, any Securityholder Representative Expenses incurred pursuant to this Agreement, the Escrow Agreement or any Securityholder Representative letter agreement (the “Expense Fund”). The Securityholder Representative will hold the Expense Fund separate from its corporate funds and will not voluntarily make it available to its creditors in the event of bankruptcy. The Securityholder Representative is bound; not providing any investment supervision, recommendations or advice and (iii) this Agreement is a legal, valid and binding obligation shall have no responsibility or liability for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Securityholder RepresentativeRepresentative is not acting as a withholding agent or in any similar capacity in connection with the Expense Fund, enforceable against it and shall have no tax reporting or income distribution obligations hereunder. As soon as reasonably determined by the Securityholder Representative that the Expense Fund is no longer required to be withheld, the Securityholder Representative shall distribute the remaining Expense Fund (if any) to the Exchange Agent for distribution to the Selling Shareholders in accordance with its terms, subject to the laws of agencytheir Pro Rata Percentage.
(g) The Securityholder Representative may resign at any time. In the event that the Securityholder Representative becomes unable or unwilling to continue in its capacity as Securityholder Representative, or if the Securityholder Representative resigns as the Securityholder Representative, the Majority-In-Interest may by written consent appoint a new representative as the Securityholder Representative. Notice and a copy of the written consent appointing such new representative and bearing the signatures of the Majority-In-Interest must be delivered to Parent. Such appointment will be effective upon the later of the date indicated in the consent or the date such consent is received by Parent.
Appears in 1 contract