Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders. 4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder. 4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder). 4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4. 4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative. 4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall. 4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Share Purchase Agreement (Oddity Tech LTD), Share Purchase Agreement (Oddity Tech LTD)
Shareholder Representative. 4.1. (a) By virtue of their approval of the Transaction and execution or adoption of this Agreement, each Shareholder irrevocably approves of the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Shareholders shall be deemed to have agreed to appoint Partech International Partners SAS as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative for and on behalf of all Shareholdersthe Shareholders to give and receive notices and communications, to authorize payment to any Purchaser Indemnified Party from the Escrow Fund in satisfaction of claims by any Purchaser Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of any Disputes, and each demand resolution or Disputes in accordance with Section 11.8 and comply with orders of them, courts and awards of arbitrators with respect to, any other claim by any Purchaser Indemnified Party against any Shareholder or by any such Shareholder against any Purchaser Indemnified Party or any Dispute between any Purchaser Indemnified Party and any such Shareholder, in each case relating to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed by the Shareholders from time to time upon not less than thirty (30) days prior written notice to Purchaser; provided, however, that the Shareholder Representative may not be removed or any change to the agency made unless holders of a two-thirds interest of the Escrow Fund agree to such removal and to prosecutethe identity of the substituted agent or such change. Notwithstanding the foregoing, defend and settle a vacancy in the position of Shareholder Representative may be filled by the holders of a majority in interest of the Escrow Fund. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderShareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with whose behalf the Waterfall compared Escrow Amount was contributed to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby Escrow Fund shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents Shareholder Representative (collectively, “Shareholder Representative LossesExpenses”). The Shareholder Representative shall have the right to withhold Shareholder Representative Expenses actually incurred from its distribution of the Escrow Fund to the Shareholders, in each case as such provided that a certificate setting forth the Shareholder Representative Loss is suffered or incurred; provided, that in the event that Expenses actually incurred accompanies any such Representative Loss is finally adjudicated to have been directly caused by the frauddistribution. A decision, willful misconductact, gross negligence consent or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount including an amendment, extension or waiver of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above10.3 and Section 10.4 hereof, shall constitute a decision of the provisions Shareholders and shall be final, binding and conclusive upon the Shareholders; and the Escrow Agent and Purchaser may rely upon any such decision, act, consent or instruction of this Section 4 shall applythe Shareholder Representative as being the decision, mutatis mutandisact, consent or instruction of the Shareholders. The Escrow Agent and Purchaser are hereby relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent or instruction of the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Share Purchase Agreement, Share Purchase Agreement (Taleo Corp)
Shareholder Representative. 4.1. By The shareholders of Data Labs, by virtue -------------------------- of their approval of the execution or adoption of this AgreementAgreement under the Delaware Corporation Law, each Shareholder shall be deemed to have irrevocably approves the constitution constituted and appointment ofappointed ▇▇▇▇▇ ▇▇, and hereby irrevocably constitutes and appoints N▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ as a committee, effective as of the Effective Time (together with such person's permitted successors, the “Shareholder Representative”) with all the rights"SHAREHOLDER REPRESENTATIVE"), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, their true and lawful agent, representative agent and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to enter into any and all matters arising out of or agreement in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations transactions contemplated by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion including, without limitation, the resolution of the Escrow Amount as is remaining at the end of the escrow period contemplated indemnity claims under Section 2.8, in accordance with the Waterfall Article IX hereof and in accordance with the Escrow Agreement, and any transactions contemplated by the Escrow Agreement, to exercise all or any of the powers, authority and discretion conferred on it under any such agreement, to waive any terms and conditions of this Agreement any such agreement (other than the consideration to be received by the Data Labs shareholders in the Merger), to give and the Escrow Agreement; receive notices on their behalf and to negotiate and sign all documents in connection be their exclusive representative with the Transaction and amendments theretorespect to any matter, whether before suit, claim, action or after Closing (proceeding arising with respect to any transaction contemplated by any such agreement, including, without limitation, Escrow Agreementthe defense, settlement or compromise of any claim, action or proceeding for which Yurie or the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that Company may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with indemnification and the Shareholder Representative in respect of any matter arising under the Transaction Documentsagrees to act as, and to undertake the Shareholdersduties and responsibilities of, in their relationship such agent and attorney-in-fact. This power of attorney is coupled with the Purchaser, shall be bound by all actions taken by an interest and is irrevocable. The members constituting the Shareholder Representative in connection with such matters. By virtue of executing shall act by majority vote or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4consent. The Shareholder Representative shall not be liable to the Shareholders for any act done action taken or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused not taken by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or it in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and its obligations under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from this Agreement (i) with the funds consent of shareholders who, as of the Effective Time, owned a majority in number of the Expense Fund, outstanding shares of Data Labs Common Stock (treating the Data Labs Preferred Stock on an as converted basis) or (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources absence of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses If one or any other corporate purposes and will not voluntarily make these funds available to its creditors in more of the event members of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by committee acting as the Shareholder Representative shall be unable or unwilling to serve in performing its duties under this Agreement such capacity, any successor thereof shall be named by those persons holding two-thirds of the outstanding shares of the Data Labs Common Stock (treating Data Labs Preferred Stock on an as-converted basis) at the Effective Time, and the agreements ancillary hereto; provided that any portion of successor(s) so named shall serve and exercise the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion powers of the Shareholder Representative’s responsibilitiesRepresentative hereunder. All amounts remaining in If such committee is composed of one person and no other members thereto are so named within 30 days of the Expense Fund upon resignation or termination of the Shareholder Representative’s engagement (and following last resigning member thereof, the completion remaining member of such committee shall serve as the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Merger Agreement (Yurie Systems Inc), Merger Agreement (Yurie Systems Inc)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement(a) The Shareholders agree to appoint one Person to act as their representative, each Shareholder irrevocably approves the constitution attorney in fact and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, proxy with respect to any and all certain matters arising out of or specified in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the "Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices"). The parties have designated Goelet, requests and demands that may be made under and pursuant to this Agreement, LLC as the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the initial Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Representative. The Shareholder Representative may resign at any time, and a Shareholder Representative may be removed at any time by the vote of Shareholders who collectively own more than 50% of the Registrable Securities at such time (the "Majority Holders"). Should In the event of the death, resignation or removal of the Shareholder Representative, a new Shareholder Representative shall be appointed by a vote of Majority Holders, such appointment to become effective upon the written acceptance thereof by the new Shareholder Representative. Any failure by the Majority Holders to appoint a new Shareholder Representative upon the death, resignation or removal of the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, shall not have the effect of releasing the Shareholders who from any liability under this Agreement.
(b) The Shareholder Representative shall have held, immediately prior such powers and authority as are necessary to carry out the functions assigned to the ClosingShareholder Representative under this Agreement; provided, however, that the majority Shareholder Representative will have no obligation to act on behalf of the voting power of the Company on an Shareholders, except as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4expressly provided herein. The Shareholder Representative shall not will at all times be liable entitled to rely on any directions received from the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faithMajority Holders. In all questions arising in respect of any matter arising under this Agreement, the The Shareholder Representative may rely on shall, at the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate expense of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum Shareholders, be entitled to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any lossengage such counsel, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs other agents and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or consultants as they shall deem necessary in connection with the acceptance, performance or administration of the Shareholder Representative’s duties exercising their powers and performing their function hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or absence of bad faith on the part of the Shareholder Representative) shall be entitled to conclusively rely on the opinions and advice of such Persons.
(c) The Shareholder Representative shall not be entitled to any fee, commission or other compensation for the performance of its services hereunder, but shall be entitled to the reimbursement by the Shareholders of all his, her or its fees and expenses incurred as the Shareholder Representative pursuant to Section 4.2 hereof. In connection with this Agreement, and any instrument, agreement or document relating hereto or thereto, and in exercising or failing to exercise all or any of the powers conferred upon the Shareholder Representative hereunder, the Shareholder Representative will reimburse shall incur no responsibility whatsoever to any Shareholder by reason of any error in judgment or other act or omission performed or omitted hereunder or any such other agreement, instrument or document, excepting only responsibility for any act or failure to act which represents willful misconduct. Each Shareholder shall indemnify, pro rata based upon such holder's percentage interest, the Shareholder Representative against all losses, damages, liabilities, claims, obligations, costs and expenses, including reasonable attorneys', accountants' and other experts' or consultant's fees and the amount of any judgment against the Shareholder Representative, of any nature whatsoever, arising out of or in connection with any claim, investigation, challenge, action or proceeding or in connection with any appeal thereof, relating to the acts or omissions of the Shareholder Representative hereunder. The foregoing indemnification shall not apply in the event of any action or proceeding which finally adjudicates the liability of the Shareholder Representative hereunder for his or her gross negligence or willful misconduct. In the event of any indemnification hereunder, upon written notice from Shareholder Representative to the Shareholders as to the existence of a deficiency toward the payment of any such indemnification amount, each such holder shall promptly deliver to the Shareholder Representative full payment of his or her ratable share of the amount of such indemnified Representative Loss to the extent attributable to deficiency, in accordance with such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwiseShareholder's percentage interest. In no event will shall the Shareholder Representative Company be required to advance its own funds on behalf of the Shareholders responsible for any reimbursement or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal indemnification of the Shareholder Representative or Representative.
(d) All of the termination of this Agreement. For the avoidance of doubt indemnities, immunities and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided powers granted to the Shareholder Representative under this Section 4.4Agreement shall survive the termination of this Agreement.
4.5. The Purchaser (e) Notwithstanding anything herein to the contrary, each Shareholder hereby acknowledges that the Company shall not be liable have any responsibility or obligation whatsoever to any such Shareholder for or to any act done other party with respect to or omitted hereunder arising out of any actions taken or any inaction by the Shareholder Representative.
4.6. A total of US$100,000 (f) The Company shall have the right to rely conclusively upon all instructions, requests, consents, elections and other actions taken or omitted to be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred taken by the Shareholder Representative in performing its duties under pursuant to this Agreement and the agreements ancillary any instrument, agreement or document relating hereto; provided that any portion , all of the Expense Fund not ultimately required for the payment of such fees and expenses which actions or omissions shall be delivered by legally binding upon all the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallShareholders.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Registration Rights Agreement (Goelet LLC), Registration Rights Agreement (Pogo Producing Co)
Shareholder Representative. 4.1. By virtue of the execution or adoption For purposes of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and Sky Shareholders hereby irrevocably constitutes and appoints Ndesignate M▇▇▇▇▇▇ ▇▇▇▇▇▇ to serve as the sole and exclusive representative of the Shareholders (the “Shareholder Representative”) with respect to those provisions of this Agreement that contemplate action by the Shareholder Representative, including ancillary agreements such as the Merger Note, Guaranty and Security Agreement; provided, however, that if M▇▇▇▇▇▇ ▇▇▇▇▇▇ at any time is unable, due to incapacity or otherwise, to serve as Shareholder Representative or resigns as Shareholder Representative, then [Name] shall serve as successor Shareholder Representative. Each successor Shareholder Representative, if required to serve, shall sign an acknowledgment in writing agreeing to perform and be bound by all of the rightsprovisions of this Agreement applicable to the Shareholder Representative. Each successor Shareholder Representative shall have all of the power, powers authority, rights and obligations contemplated privileges conferred by this Section 4Agreement upon the original Shareholder Representative, and the term “Shareholder Representative” as used herein shall be deemed to include any successor Shareholder Representative(sRepresentative.
(a) designated under this Section 4 The Shareholder Representative is hereby constituted and appointed as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for and on behalf of all Shareholders, and each of them, the Sky Shareholders with respect to any the performance of his or her duties as the Shareholder Representative. This power of attorney and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement authority hereby conferred is granted and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given irrevocable and shall not be terminated by any act of any Sky Shareholder, by operation of Law, whether by such Sky Shareholder’s death, disability, protective supervision or made any other event. The Shareholder Representative shall promptly deliver to each Sky Shareholder any notice received by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2concerning this Agreement. Without limiting the generality of the foregoing, the Shareholder Representative shall have has full power and authority authority, on behalf of each Sky Shareholder and such Sky Shareholder’s successors and assigns, to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with (i) interpret the terms and conditions provisions of this Agreement and the Escrow documents to be executed and delivered by the Shareholders in connection herewith, including the Merger Note, Guaranty and Security Agreement; , (ii) execute and deliver and receive deliveries of all agreements, certificates, statements, notices, approvals, extensions, waivers, undertakings, amendments, and other documents required or permitted to negotiate and sign all documents be given in connection with the Transaction consummation of the transactions contemplated by this Agreement and amendments theretothe Merger Note, whether before or after Closing Guaranty and Security Agreement (including, without limitation, Escrow including executing this Agreement, the Payment Agent Merger Note, the Guaranty and the Security Agreement, share transfer deeds (iii) receive service of process in connection with any claims under this Agreement, the Merger Note, the Guaranty or the Security Agreement, (iv) agree to, negotiate, enter into settlements and endorsements compromises of, assume the defense of claims, and termination instruments demand arbitration and including amendments that may require price reductions or holdbacks); comply with orders of courts and awards of arbitrators with respect to grantsuch claims, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in the judgment of the Shareholder Representative for the accomplishment of the foregoing, (v) give and receive notices and communications, (vi) object to such deliveries, (viii) distribute the proceeds of the Merger Note and the Security Agreement (if applicable) and any earnings and proceeds thereon and (ix) take all actions necessary or appropriate in the judgment of the Shareholder Representative on behalf of the Sky Shareholders in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement Merger Note, the Guaranty and the Escrow Security Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. (b) The Shareholder Representative may resign at shall have no duties or responsibilities except those expressly set forth herein, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on behalf of any time. Should the Sky Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or shall otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all exist against the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Sky Shareholder Representative, except relating to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectivelythis Agreement for any errors in judgment, “Representative Losses”)negligence, in each case as such Representative Loss is suffered oversight, breach of duty or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss otherwise except to the extent attributable to such fraud, willful misconduct, gross negligence it is finally determined in a court of competent jurisdiction by clear and convincing evidence that the actions taken or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered taken by the Shareholder Representative from (i) constituted actual fraud or were taken or not taken in bad faith. The Shareholder Representative shall be indemnified and held harmless by the funds Sky Shareholders against all losses, including costs of defense, paid or incurred in connection with any action, suit, proceeding or claim to which the Expense Fund, (ii) Shareholder Representative is made a party by reason of the funds in fact that the Escrow Amount at such time Shareholder Representative was acting as such amounts would otherwise be distributable the Shareholder Representative pursuant to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the ShareholdersAgreement; provided, however, that while this section allows the Shareholder Representative shall not be entitled to indemnification hereunder to the extent it is finally determined in a court of competent jurisdiction by clear and convincing evidence that the actions taken or not taken by the Shareholder Representative constituted actual fraud or were taken or not taken in bad faith. The Shareholder Representative shall be held harmless in acting upon any notice, statement or certificate believed by the Shareholder Representative to be paid from genuine and to have been furnished by the aforementioned sources of funds, this does not relieve the Shareholders from their obligation appropriate person and in acting or refusing to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the act in good faith on any matter. The Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything (in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8his capacity as such) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to Incumaker or the Surviving Corporation by reason of this Agreement or the performance the Shareholder Representative’s duties hereunder or otherwise.
(c) Incumaker shall be entitled to rely upon any Shareholder for any act done or omitted hereunder actions taken by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to Representative as the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses duly authorized action of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior each Sky Shareholder with respect to Closing pursuant to any matters set forth in this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 aboveMerger Note, the provisions of this Section 4 shall apply, mutatis mutandis, to Guaranty and the Company (as if it was a Shareholder Representative)Security Agreement.
Appears in 2 contracts
Sources: Merger Agreement (RDE, Inc.), Merger Agreement (uBid Holdings, Inc./New)
Shareholder Representative. 4.1. By virtue (a) Each of the execution or adoption of this AgreementCompany Indemnifying Persons hereby appoints OrbiMed Israel Partners, each Shareholder irrevocably approves the constitution and appointment ofLimited Partnership, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative for and on behalf of all Shareholdersthe Company Indemnifying Persons to give and receive notices and communications, to authorize settlements from the Escrow Shares in satisfaction of Losses incurred by the Innovate Indemnified Parties and to resolve disputes with respect thereto, to object to claims for indemnification, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2)such claims, the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in judgment of the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated or allowed by the terms of this Agreement. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing Representatives’ shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderCompany Shareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders Company Indemnifying Persons shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that expenses of any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder legal counsel retained by the Shareholder Representative.
4.6. (c) A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit decision, act, consent or instruction of the Shareholder Representative, for the Escrow Agent to hold on behalf shall constitute a decision of the Shareholders as a fund for Company Indemnifying Persons and shall be final, binding and conclusive upon the fees Company Indemnifying Persons and expenses Innovate may rely upon any such decision, act, consent or instruction of the Shareholder Representative incurred in connection with this Agreement and as being the agreements ancillary hereto (decision, act, consent or instruction of the “Expense Fund”)Indemnifying Persons. All amounts deposited Parent is hereby relieved from any liability to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable person for any loss of principal of the Expense Fund other than as a result of its gross negligence acts done by them in accordance with such decision, act, consent or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion instruction of the Shareholder Representative’s responsibilities. All amounts remaining .
(d) If the Shareholder Representative shall die, become disabled, dissolve, resign or otherwise be unable or unwilling to fulfill its responsibilities as representative and agent of Company Shareholders, then the Company Shareholders shall, within ten (10) days after such death, disability, dissolution, resignation or other event, appoint a successor Shareholder Representative (by vote or written consent of the Company Shareholders holding in the Expense Fund upon termination aggregate Pro Rata Shares in excess of fifty percent (50%)), and promptly thereafter (but in any event within two (2) Business Days after such appointment) notify Innovate in writing of the identity of such successor. Any such successor so appointed shall become the “Shareholder Representative’s engagement (and following the completion ” for purposes of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Merger Agreement (Innovate Biopharmaceuticals, Inc.), Merger Agreement (Innovate Biopharmaceuticals, Inc.)
Shareholder Representative. 4.1. By virtue of the execution or adoption and delivery of -------------------------- this Agreement, including counterparts hereof, each Shareholder irrevocably approves the constitution and appointment of, and Stockholder hereby irrevocably constitutes and appoints N▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 III as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for (referred to in this Agreement as the "Representative") of such Stockholder with full powers of substitution to act in the name, place and stead of such Stockholder with respect to the performance on behalf of all Shareholderssuch Stockholder under the terms and provisions of this Agreement, as the same may be from time to time amended, and each of themto do or refrain from doing all such further acts and things, with respect and to any and execute all matters arising out of such documents, as the Representative shall deem necessary or appropriate in connection with any of the transactions contemplated under this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, including without limitation the Escrow Agreement power:
(i) to receive, hold and deliver to Central any of the agreements ancillary hereto following certificates representing the Closing Shares and taking any action or omitting to take action other documents relating thereto on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or such Stockholder;
(ii) to receive on behalf of the Shareholders in accordance herewith shall be given such Stockholder any shares of Central Common Stock issued or made by the Shareholder Representative cash paid to such Stockholder pursuant to this Agreement;
(iii) to execute and deliver all such actionsAncillary Agreements, noticescertificates, and determinations by documents which the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deems necessary or appropriate in connection with the Transaction Documents; consummation of the transactions contemplated by the terms and provisions of this Agreement;
(iv) to act for such Stockholder with respect to all indemnification matters referred to in this Agreement, including the right to compromise or settle any such claims on behalf of such Stockholder;
(v) to amend or waive any provision of this Agreement (including any condition to Closing) in any manner which does not differentiate among the Stockholders;
(vi) to employ and obtain the advice of legal counsel, accountants and other professional advisors as the Representative, in his sole discretion, deems necessary or advisable in the performance of his duties as Representative and to prosecuterely on their advice and counsel;
(vii) to incur any expenses, defend to liquidate and settle withhold assets received on behalf of the Stockholders prior to their distribution to the Stockholders to the extent of any amount which the Representative deems necessary for payment of or as a reserve against expenses, and to pay such expenses or to deposit the same in the Shareholder Representative’s discretion all indemnification disputes an interest-bearing bank account established for such purpose;
(including hiring counsel and other litigation assistance and including in court of law or any other legal proceedingviii) and to receive all notices, requests communications and demands deliveries hereunder on behalf of such Stockholder under this Agreement; and
(ix) to do or refrain from doing any further act or deed on behalf of such Stockholder which the Representative deems necessary or appropriate in his sole discretion relating to the subject matter of this Agreement as fully and completely as any of the Stockholders could do if personally present and acting and as though any reference to a Stockholder or the Stockholders in this Agreement were a reference to the Representative. The appointment of the Representative shall be deemed coupled with an interest and shall be irrevocable, and Central and any other person may conclusively and absolutely rely, without inquiry, upon any action of the Representative as the act of the Stockholders in all matters referred to in this Agreement. Each Stockholder hereby ratifies and confirms all that the Representative shall do or cause to be done by virtue of his appointment as Representative of such Stockholder. The Representative shall act for the Stockholders on all of the matters set forth in this Agreement in the manner the Representative believes to be in the best interest of the Stockholders, but the Representative shall not be responsible to any Stockholder for any loss or damage any Stockholder may be made suffer by reason of the performance by the Representative of his duties under and pursuant to this Agreement, other than loss or damage arising from willful misconduct in the Paying Agent Agreement and the Escrow performance of his duties under this Agreement. From Each of the Stockholders hereby expressly acknowledges and after agrees that the ClosingRepresentative is authorized to act on behalf of such Stockholder notwithstanding any dispute or disagreement among the Stockholders, the Purchaser and that Central shall be entitled to deal exclusively with the Shareholder Representative in respect of rely on any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise under this Agreement without liability to, or obligation to inquire of, any of the power of attorney granted Stockholders. If the Representative resigns or ceases to function in such capacity for any reason whatsoever, then the Shareholder Representative pursuant to this Section 4.2, Stockholder which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the held a majority of the voting power of Shares on the Company on an as converted basis date hereof shall designate in writing to Purchaser appoint a successor; provided, however, that if for any reason no successor has been appointed within five thirty (530) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designateddays, then Purchaser may any Stockholder shall have the right to petition a court of competent jurisdiction to appoint for appointment of a Shareholder to act as new Shareholder Representative hereundersuccessor. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect Stockholders do hereby jointly and severally agree to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless from and against any loss, and all liability, deficiency, damageloss, cost, claim, penalty, fine, forfeiture, damage or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), without limitation attorneys' fees) reasonably incurred or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event performance of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required except for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallwillful misconduct.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Agreement and Plan of Reorganization (Pennington Brooks Iii), Agreement and Plan of Reorganization (Central Garden & Pet Company)
Shareholder Representative. 4.1. By virtue (a) Each of the execution Parties agrees that the Shareholder Representative may enforce, on behalf of the Company, the Company’s rights under Section 4.7. The Shareholder Representative is also entitled to initiate or adoption otherwise file any Action in the courts contemplated by Section 9.5 with respect thereto on behalf of this Agreementthe Company. Each of the Parties acknowledges and agrees that the Shareholder Representative shall be entitled to receive at the same time as received by the Company any notices required to be delivered to the Company with respect to Section 4.7, each Shareholder including, but not limited to, the Adjustment Dispute Notice.
(b) To the maximum extent permitted by applicable Law, the Company irrevocably approves appoints and grants the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) , in its capacity as a Shareholder Representative, with all the rightsfull power, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, Company’s true and lawful agentrepresentative, representative agent and attorney-in-fact for fact, in the Company’s name, place and stead, with full power of substitution, to, from and after the Closing, (i) negotiate any disputes with the Parent with respect to the Disputed Merger Consideration, including on behalf of holders of Company Stock and Company Equity Awards, (ii) bring any claim or Action on behalf of the Company against the Parent with respect to Section 4.7, (iii) defend any claim or action by Parent, on behalf of the Company with respect to the Disputed Merger Consideration or otherwise exercise or enforce any of the Company’s rights under Section 4.7 against the Seller, including on behalf of holders of Company Stock and Company Equity Awards, (iv) execute and deliver all Shareholdersinstruments, deeds, agreements, documents and certificates necessary, advisable or appropriate in the discretion of the Shareholder Representative, as the case may be, to effectuate any of the foregoing, and each (v) direct the Escrow Agent to pay all or a portion of themthe Disputed Merger Consideration in accordance with Section 4.7(h)(iii). The agency and powers of attorney granted herein shall be deemed to be coupled with an interest, shall be irrevocable except that such grant shall automatically terminate with respect to a Person when it is no longer serving as a Shareholder Representative.
(c) Any decision, act, consent, approval or instruction of the Shareholder Representative (then serving at such time) properly given or made pursuant to this Section 9.19 shall constitute a decision, act, consent, approval or instruction of the Company and shall be final, binding and conclusive upon Parent, and the other Parties hereto shall be entitled to conclusively rely upon any representation of the Shareholder Representative with respect to any act, decision, consent, approval or instruction of the Shareholder Representative. Neither the Shareholder Representative, nor any of its officers, directors, employees, partners (general or limited), members, managers or advisors will have any liability to Parent, Merger Subs, or the Company, or any of their respective Affiliates, or any Person acting on behalf of the foregoing, with respect to any and all matters arising out of actions taken, or omitted to be taken, by the Shareholder Representative in such capacity (or its officers, directors, employees, partners (general or limited), members, managers or advisors in connection with this Agreement (excluding pursuant to Section 10.2therewith), the Paying Agent Agreementexcept that a Shareholder Representative will be liable for its fraud as finally determined by a court of competent jurisdiction. The Shareholder shall be entitled to full reimbursement from Parent for all reasonable and documented expenses, the Escrow Agreement disbursements and the agreements ancillary hereto following the Closing advances (including fees and taking any action or omitting to take action on behalf disbursements of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations its external advisors) incurred by or on behalf of the Shareholders Shareholder Representative in accordance herewith shall be given or made by such capacity.
(d) In the event that the Shareholder Representative and all resigns, such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized byautomatically removed and the Company, and shall be binding upon, any and all Shareholders.
4.2. Without limiting on the generality recommendation of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the PurchaserSpecial Committee, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to promptly appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The such Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).[Signature Page Follows]
Appears in 2 contracts
Sources: Agreement and Plan of Merger (Vacasa, Inc.), Agreement and Plan of Merger (Vacasa, Inc.)
Shareholder Representative. 4.1. By virtue (a) The Shareholder shall have the right, exercisable by delivering notice to the Company, to designate one individual to attend all meetings of the execution Board in a non-voting, observer capacity (the “Shareholder Representative”) for so long as (i) the Shareholder and its Affiliates beneficially own in the aggregate at least the Shareholder Representative Threshold Shareholding in the Company, and (ii) the Shareholder and its Affiliates comply in all material respects with the provisions of Sections 2.1 (Standstill), 3.2 (Investment Restrictions) and 3.3 (Transfer Restrictions).
(b) The Company shall (i) provide to the Shareholder Representative notice of all Board meetings and a copy of all materials provided to the members of the Board in their capacity as such at the same time such materials are provided to the members of the Board, and (ii) take reasonable measures to facilitate the Shareholder Representative’s attendance of any such meeting in accordance with this Section 3.1(b); provided, that, notwithstanding any other provision of this Section 3.1, (A) the Shareholder Representative shall agree to hold in confidence all information provided (provided that the Shareholder Representative shall not be restricted in any confidential communications or adoption discussions with or the confidential provision of information to the Shareholder and its Affiliates and their respective directors, officers, employees, accountants, agents, counsel and other representatives), (B) such Shareholder Representative, the Shareholder and its Affiliates shall, in each case to the sole extent that (x) the Shareholder is entitled to designate and has designated the Shareholder Representative pursuant to Section 3.1(a) and (y) such Shareholder Representative has all the rights and benefits under this Agreement, each Shareholder irrevocably approves be subject to the constitution and appointment of, and hereby irrevocably constitutes and appoints NCompany’s ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policies and procedures and shall sign an acknowledgement form stating the agreement to comply with such policies and procedures (it being understood that such ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policies and procedures shall not restrict the Shareholder or its Affiliates from purchasing ADSs or Ordinary Shares during any “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorneyblackout” or similar non-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding trading period if such purchases are made pursuant to Section 10.2), a purchase plan established in accordance with Rule 10b5-1 of the Paying Agent Agreement, Exchange Act) and (C) the Escrow Agreement and Shareholder Representative may be excluded from all or a portion of any meeting or from receiving all or a portion of any materials provided to the agreements ancillary hereto following member of the Closing and taking Board (x) to the extent that the presence of the Shareholder Representative at such meeting or any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement portion thereof or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made receipt by the Shareholder Representative and all of such actionsmaterials or any portion thereof, noticesas the case may be, could reasonably be expected to result in, based on the advice of the Company’s external counsel, the loss of attorney-client privilege in relation to the Company, its Subsidiaries or its Affiliates, or (y) to the extent the subject matter to be discussed at the meeting concerns (1) the Company’s rights under agreements with the Shareholder or its Affiliates or (2) matters related to business competition between the Company or its Subsidiaries, on the one hand, and determinations by the Shareholder or its Affiliates, on the other hand; it being understood that the Shareholder Representative shall conclusively be deemed to have been authorized by, not constitute a member of the Board and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall not be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documentsvote on, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirmsconsent to, any action taken by the Shareholder Representative in the exercise of the power of attorney granted matters presented to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Board. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for For the avoidance of doubt, in all cases subject to the aggregate first sentence of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipmentSection 3.1(b), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence regular or bad faith on the part special meeting of the Shareholder RepresentativeBoard is convened, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may Company shall be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative deemed to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection full compliance with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 3.1(b), if the Shareholder Representative is given notice in the same form and manner as, and a copy of the same materials as and when provided to, the members of the Board and the Company takes reasonable measures to facilitate the Shareholder Representative’s attendance of any such meeting in accordance with this Section 3.1(b).
(c) The Company acknowledges and agrees that the Shareholder Representative shall applynot, mutatis mutandisacting solely in the capacity of an observer of the Board and in compliance with this Section 3.2, owe to the Company (as if it was a Shareholder Representative)any fiduciary duty.
Appears in 2 contracts
Sources: Cooperation Agreement (Naspers LTD), Share Purchase Agreement (Naspers LTD)
Shareholder Representative. 4.1. By The Selling Parties, by virtue of their execution and delivery of this Agreement or, with respect to Selling Parties that are not signatories to this Agreement, by virtue of approval of this Agreement and the execution or adoption Merger by the Shareholders in accordance with the requirements of Delaware Law and by their acceptance of any Merger Consideration due to them, will be deemed to have irrevocably constituted and appointed, effective as of the date of this Agreement, each Shareholder irrevocably approves IBF (together with its permitted successors, the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “"Shareholder Representative”) with all the rights"), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, their true and lawful agent, representative agent and attorney-in-fact for and on behalf of all Shareholdersfact, and the Shareholder Representative, by its execution of this Agreement shall be deemed to have accepted such appointment, to enter into any agreement in connection with the transactions contemplated by this Agreement or the Escrow Agreement, to exercise all or any of the powers, authority and discretion conferred on it under any such agreement, to act as proxy for each Selling Party in connection with any shareholder approvals required in connection with the transactions contemplated by this Agreement, to waive or modify any terms and conditions of themany such agreement (other than payment of the Merger Consideration due at Closing), to give and receive notices on their behalf, and to be their exclusive representative with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2)matter, the Paying Agent Agreementsuit, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any claim, action or omitting proceeding arising with respect to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsany transaction contemplated by any such agreement, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreementthe assertion, prosecution, defense, settlement or compromise of and claim, action or proceeding for which any Shareholder, Purchaser, or the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that Merger Sub may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with indemnification and the Shareholder Representative in respect of any matter arising under the Transaction Documentsagrees to act as, and to undertake the Shareholdersduties and responsibilities of, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such mattersagent and attorney-in-fact. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the This power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being is coupled with an interest, interest and is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4irrevocable. The Shareholder Representative shall not be liable for any action taken or not taken by him in his capacity as Shareholder Representative either (i) with the consent of stockholders who, as of the date of this Agreement, own a majority in number of the outstanding shares of Company voting stock (considered on an as converted basis), or (ii) in the absence of its own willful misconduct. If the Shareholder Representative shall be unable or unwilling to serve in such capacity, its successor shall be named by those persons holding a majority of the shares of Company voting stock outstanding immediately prior to the Shareholders for Effective Time who shall serve and exercise the powers of Shareholder Representative hereunder. Solely with respect to any act done or omitted hereunder actions taken by the Shareholder Representative in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreementsuch, the Shareholder Representative may rely on shall have no liability to Purchaser, the advice Company or any of counsel and any action their respective affiliates except for claims based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence fraud or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder actions by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Acquisition Agreement (Ibf Vi Guaranteed Income Fund), Acquisition Agreement (Sunset Brands Inc)
Shareholder Representative. 4.1. By (a) Each of the Equityholders, by virtue of the execution or adoption of this AgreementAgreement and thereby the Merger by the Company Shareholder Approval, each hereby appoints GF Private Equity Group, LLC and shall have irrevocably constituted and appointed (and by its execution of this Agreement as Shareholder irrevocably approves Representative, GF Private Equity Group, LLC hereby accepts its appointment) as the constitution true, exclusive and appointment of, lawful agent and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ attorney-in-fact (the “Shareholder Representative”) ), of the Equityholders receiving consideration hereunder to act in the name, place and stead of the Equityholders in connection with all the rights, powers and obligations transactions contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions provisions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, and to act on behalf of the Payment Agent Equityholders in any Proceeding involving this Agreement, share transfer deeds to do or refrain from doing all such further acts and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); things, and to grant, provide, negotiate and sign execute all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be such documents as the Shareholder Representative shall deem necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to transactions contemplated by this Agreement, including the Paying Agent power:
(i) to act for the Equityholders with regard to matters pertaining to indemnification referred to in this Agreement, including the power to compromise any indemnity claim on behalf of the Company Shareholders and to transact matters of litigation or other Proceedings;
(ii) to execute and deliver all amendments, waivers, ancillary agreements, stock powers, certificates and documents that the Shareholder Representative deems necessary or appropriate in connection with the consummation of the transactions contemplated by this Agreement;
(iii) to execute and deliver all amendments and waivers to this Agreement and that the Escrow Agreement. From and Shareholder Representative deems necessary or appropriate, whether prior to, at or after the Closing;
(iv) to receive funds for the payment of expenses of the Equityholders and apply such funds in payment for such expenses;
(v) to do or refrain from doing any further act or deed on behalf of the Equityholders that the Shareholder Representative deems necessary or appropriate in its sole discretion relating to the subject matter of this Agreement as fully and completely as the Equityholders could do if personally present; and
(vi) to receive service of process in connection with any claims under this Agreement.
(b) The Shareholder Representative may be removed or replaced only upon delivery of written notice to the Surviving Corporation by the Company Shareholders holding at least a majority of outstanding shares of Company Common Stock as of immediately prior to the Effective Time. Parent, the Purchaser shall be entitled to deal exclusively with Surviving Corporation and any other Person may conclusively and absolutely rely, without inquiry, upon any action, decision, consent or instruction of the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees matters referred to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3herein. The Shareholder Representative may resign at act in reliance upon any time. Should instruction, notice, certification, demand, consent, authorization, receipt, power of attorney or other writing delivered to it by any other person other than itself without being required to determine the Shareholder Representative die, become legally incapacitated authenticity or bankrupt, dissolve, liquidate validity thereof or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her steadthe correctness of any fact stated therein, the Shareholders who have held, immediately prior to the Closing, the majority propriety or validity of the voting power service thereof, or the jurisdiction of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased court issuing any judgment or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunderorder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect Representative may act in reliance upon any signature believed by it to potential or contingent liabilities of the Shareholders hereunder).
4.4be genuine, and may assume that such person has been properly authorized to do so. The Shareholder Representative shall not be liable to act for the Shareholders for any act done or omitted hereunder Equityholders on all of the matters set forth in its capacity as this Agreement in the manner the Shareholder Representative, except Representative believes to be in the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect best interests of any matter arising the Equityholders and consistent with the obligations under this Agreement, but the Shareholder Representative shall not be responsible to the Equityholders for any Damages the Equityholders may rely on suffer by the advice performance of counsel and any action based upon such reliance shall relieve its duties under this Agreement, other than Damage arising from willful violation of the law or gross negligence in the performance of its duties under this Agreement as determined by a non-appealable order or judgment of a court or tribunal of competent jurisdiction. Each of the Equityholders agrees that the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from entitled to recover any indemnifiable amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest hereunder or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees out-of-pocket costs and expenses reasonably incurred by the Shareholder Representative on demand in performing connection with actions taken by the Shareholder Representative pursuant to the terms hereof (including the hiring of legal counsel or advisors and the incurring of legal fees and other costs) from the Shareholder Representative Expense Fund. In the event such recovery is precluded or unattainable for over thirty days after demand thereof from the Shareholder Representative Expense Fund, each of the Equityholders severally shall indemnify and hold harmless and shall reimburse Shareholder Representatives from and against such Equityholder’s ratable share of any and all liabilities, losses, damages, claims, costs or expenses suffered or incurred by the Shareholder Representative arising out of or resulting from any action taken or omitted to be taken by the Shareholder Representative under this Agreement or the Escrow Agreement, other than such liabilities, losses, damages, claims, costs or expenses determined by a non-appealabe order or judgment of a court or tribunal of competent jurisdiction arising out of or resulting from the Shareholder Representative’s willful violation of the law or gross negligence in the performance of its duties under this Agreement and Agreement. The Shareholder Representative may consult with legal counsel of its selection in the agreements ancillary hereto; provided that event of any portion dispute or question as to the meaning or construction of any of the Expense Fund not ultimately required for provisions hereof or its duties hereunder, and it shall incur no liability to the payment Equityholders in acting in accordance with the opinion and instructions of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallcounsel.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Merger Agreement (Mellanox Technologies, Ltd.), Merger Agreement
Shareholder Representative. 4.1(a) D. E. Shaw Composite Side Pocket Series I, L.L.C. is hereby appointed to serve as the initial Shareholder Representative with respect to the matters expressly set forth in this Article X and by its signature below it hereby acknowledges such appointment and agrees to serve in such capacity on the terms and subject to the conditions set forth herein. By virtue Effective only upon the Effective Time, the Shareholder Representative (including any successor or successors thereto) shall act as the representative of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment ofFormer Company Stockholders, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and shall be authorized to act on behalf of the Former Company Stockholders and to take any and all Shareholders, and each of them, actions required or permitted to be taken by the Shareholder Representative under this Article X with respect to any and all matters arising out of or in connection with this Agreement claims (excluding including the settlement thereof) made by any Buyer Indemnitee for indemnification pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing Article X (including, without limitation, Escrow Agreementthe exercise of the power to agree to, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to, any claims for indemnification). The Shareholder Representative shall be the Payment Agent Agreement, share transfer deeds only party entitled to assert the rights of the Former Company Stockholders hereunder and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion Representative shall perform all indemnification disputes of the obligations (including hiring counsel and other litigation assistance and including in court than payment) of law or any other legal proceeding) and to receive all notices, requests and demands that may be made the Former Company Stockholders under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser Article X. Any Person shall be entitled to deal exclusively with rely on all statements, representations and decisions of the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, Representative.
(b) The Former Company Stockholders shall be bound by all actions taken by the Shareholder Representative in connection with such mattershis, her or its capacity thereof. By virtue of executing or adopting this Agreement, each The Shareholder agrees to ratify and confirmRepresentative shall promptly, and hereby ratifies and confirmsin any event within 10 Business Days, provide written notice to the Former Company Stockholders of any action taken on behalf of them by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided authority delegated to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser Article X. Neither the Shareholder Representative nor any of its directors, officers, agents or employees, if any, shall not be liable to any Shareholder person for any act done error of judgment, or any action taken, suffered or omitted hereunder by to be taken under this Agreement, except in the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result case of its gross negligence or willful misconduct. The Shareholder Representative will shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement.
(c) Each Former Company Stockholder shall, severally and not jointly, hold these funds separate harmless and reimburse the Shareholder Representative from its corporate fundsand against such Former Company Stockholder’s ratable share of any and all liabilities, will not use these funds for its operating losses, damages, claims, costs or expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in (including the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all reasonable fees and expenses reasonably of any legal counsel retained by the Shareholder Representative) suffered or incurred by the Shareholder Representative in performing its duties arising out of or resulting from any action taken or omitted to be taken by the Shareholder Representative under this Agreement and the agreements ancillary heretoAgreement; provided provided, however, that any no such Former Company Stockholder shall be so liable in excess of such Former Company Stockholder’s pro rata portion of the Expense Fund Merger Consideration. The Shareholder Representative shall not ultimately required be entitled to any compensation for the payment of his, her or its services in such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallcapacity.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 2 contracts
Sources: Merger Agreement (Babyuniverse, Inc.), Merger Agreement (eToys Direct, Inc.)
Shareholder Representative. 4.1. By virtue (a) The approval by the Shareholders of the execution or adoption principal terms of this Agreement, each the Merger shall automatically and without any further action on the part of any Shareholder irrevocably approves constitute the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (of the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Representative as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for and on behalf each of all the Shareholders, to give and each of themreceive notices and communications, with respect to authorize payment to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, Indemnified Party from the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by Fund or on behalf of the Shareholders in accordance herewith shall be given or made satisfaction of claims by the Shareholder Representative any Indemnified Party, to object to such payments, to bring any claim for indemnification on behalf of any Company Indemnified Party, to agree to, negotiate, enter into settlements and all such actions, noticescompromises of, and determinations by the Shareholder Representative shall conclusively be deemed demand arbitration and comply with orders of courts and awards of arbitrators with respect to have been authorized bysuch claims, to assert, negotiate, enter into settlements and compromises of, and shall be binding upondemand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any Shareholder or by any such Shareholder against any Indemnified Party or any dispute between any Indemnified Party and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and any such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8Shareholder, in accordance with the Waterfall and in accordance with the terms and conditions of each case relating to this Agreement and or the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments theretotransactions contemplated hereby, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed by the Shareholders from time to time upon not less than thirty (30) days’ prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed unless holders of a majority in interest of the Escrow Fund agree to such removal and to prosecute, defend and settle the identity of the substituted agent. A vacancy in the position of Shareholder Representative may be filled by the holders of a majority in interest of the Escrow Fund. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for his services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderShareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders on whose behalf the Escrow Fund was constituted shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents Shareholder Representative (collectively, “Shareholder Representative LossesExpenses”). Promptly after the Termination Date, in each case as such Representative Loss is suffered or incurred; providedand subject to Section 9.6, any shares of Parent Common Stock that remains available in the event Escrow Fund shall constitute security for the indemnification obligations set forth in the immediately preceding sentence and shall be released to the Shareholder Representative upon delivery by the Shareholder Representative to Parent and the Escrow Agent prior to the Termination Date of a certificate signed by the Shareholder Representative: (1) stating that the Shareholder Representative is entitled to such indemnity payment, (2) specifying in reasonable detail the basis of such claim, and (3) accompanied by any additional documentation evidencing the validity of the Shareholder Representative Expenses reasonably requested by the Escrow Agent, Parent or any Shareholder. A decision, act, consent or instruction of the Shareholder Representative shall constitute a decision of the Shareholders and shall be final, binding and conclusive upon the Shareholders; and the Escrow Agent and Parent may rely upon any such decision, act, consent or instruction of the Shareholder Representative Loss is finally adjudicated as being the decision, act, consent or instruction of the Shareholders. The Escrow Agent and Parent are hereby relieved from any liability to have been directly caused any Person for any acts done by the fraudthem in accordance with such decision, willful misconductact, gross negligence consent or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption of signing this Agreement, each Parent Shareholder shall have irrevocably approves authorized and appointed the constitution and appointment ofShareholder Representative as such Person’s representative, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative exclusive agent and attorney-in-fact for and to act on behalf of all Shareholders, and each of them, such Person with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, and the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of any and all Shareholders actions and make any decisions required or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall permitted to be given or made taken by the Shareholder Representative pursuant to this Agreement or the Escrow Agreement, including the exercise of the power to, at or after the Closing:
(i) give and all such actionsreceive notices and communications;
(ii) authorize disbursements of cash from the Escrow Amount and direct distributions from the Seller;
(iii) agree to, noticesnegotiate, enter into settlements and compromises of, and determinations by comply with or otherwise handle any matters described in Section 2.06;
(iv) agree to, negotiate, enter into settlements and compromises of, litigate and comply with or otherwise handle any matters described in Article VIII;
(v) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement and the Escrow Agreement;
(vi) engage, employ, or appoint any agents or representatives (including attorneys, accountants, and consultants) to assist it in complying with its duties and obligations; and
(vii) take all actions necessary or appropriate in the good faith judgment of the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2for the accomplishment of the following. Without limiting the generality of Notwithstanding the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent no obligation to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion act on behalf of the Escrow Amount Parent Shareholders, except as is remaining at the end of the escrow period contemplated under Section 2.8, expressly provide in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; .
(b) The Shareholder Representative shall be entitled to negotiate rely upon any signature believed by it to be genuine and reasonably assume that a signatory has proper authorization to sign all documents in connection with the Transaction and amendments thereto, whether before on behalf of a Parent Shareholder or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreementparty. From and after the Closing, the Purchaser Buyer shall be entitled to deal exclusively with the Shareholder Representative in respect on all matters relating to this Agreement, as described herein (including Section 2.06 and Article VIII) and shall be entitled to rely conclusively (without further evidence of any matter arising under the Transaction Documentskind whatsoever) on any document executed or purported to be executed on behalf of any Parent Shareholder, and the Shareholders, in their relationship with the Purchaser, shall on any other action taken or purported to be bound by all actions taken on behalf of any Parent Shareholder by the Shareholder Representative in connection with Representative, as being fully binding upon such mattersPerson and such Person’s successors. By virtue No Parent Shareholder shall have the right to object to, dissent from, protest, or otherwise contest the same and all defenses which may be available to any Parent Shareholder to contest, negate, or disaffirm the action of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative taken in good faith under this Agreement or the exercise Escrow Agreement are hereby waived. The provisions of this Section, including the power of attorney granted hereby, and the powers, immunities and rights to indemnification granted to the Shareholder Representative pursuant to this Section 4.2hereunder: (i) are independent and severable, which power of attorney, being are irrevocable and coupled with an interestinterest and shall not be terminated by any act of any one or more Parent Shareholders or by operation of Law, is irrevocable whether by death or other event; and (ii) shall survive the deathdelivery of an assignment by any Parent Shareholder of the whole or any fraction of his, incapacity her, or incompetence of each such Shareholderits interest in the Escrow Amount.
4.3. (c) The Shareholder Representative may resign at any time. Should , and may be removed for any reason or no reason by the vote or written consent of a majority in interest of the Parent Shareholders according to each Parent Shareholder’s Pro Rata Fraction (the “Majority Holders”); provided, however, in no event shall the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, removed without the Shareholders who have held, Majority Holders having first appointed a new Shareholder Representative which shall assume such duties immediately prior to upon the Closing, the majority removal of the voting power Shareholder Representative. In the event of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days death, incapacity, resignation, dissolution, or removal of the Shareholder Representative, a single Person to replace the deceased or legally incapacitated or otherwise similarly unable new Shareholder Representative as shall be appointed by the successor vote or written consent of the Majority Holders. Notice of such vote or a copy of the written consent appointing such new Shareholder Representative hereundershall be sent to Buyer, such appointment to be effective upon the later of the date indicated in such consent or the date such notice is received by Buyer; provided, however, that until such notice is received, Buyer shall be entitled to rely on the decisions and actions of the prior Shareholder Representative. If at any time there The immunities and rights to indemnification shall not be a survive the resignation or removal of the Shareholder Representative and the Closing and/or any termination of this Agreement and the Escrow Agreement.
(d) The parties hereto and the Parent Shareholders fail to designate in writing a successor acknowledge and agree that the Shareholder Representative within five (5) Business Days after receipt will have no Liability to, and will not be liable for any Losses of, any party or any Parent Shareholder for any actions, omissions or obligations of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including or in connection with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representativetransactions described herein, except to the extent caused by its such Losses are proven and adjudicated to be the direct result of willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred misconduct by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties its obligations hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwiseAgreement. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Parent Shareholders or otherwise. The Shareholders acknowledge and agree that Nothing herein shall limit the foregoing indemnities will survive the resignation or removal liability of the any person serving as Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything for liability such person may have in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders their capacity as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallParent Shareholder.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Asset Purchase Agreement (Hunt J B Transport Services Inc)
Shareholder Representative. 4.1. By virtue of the execution or adoption For purposes of this AgreementAgreement the shareholders of SoftMagic, each Shareholder irrevocably approves without any further action on the constitution and part of any such shareholder, shall be deemed to have consented to the appointment of, and hereby irrevocably constitutes and appoints Nof ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Sant'▇▇▇▇ as the representative of such shareholders (the “"Shareholder Representative”) with all the rights"), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholderseach such shareholder, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative of any and all actions and the making of any decisions required or permitted to be taken by him under this Agreement, including, without limitation, the exercise of the power to (i) execute the Escrow Agreement, (ii) authorize delivery to Puma of the Escrow Shares, or any portion thereof, in satisfaction of Indemnification Claims, (iii) agree to, negotiate, enter into settlements and compromises of and comply with orders of courts and awards of arbitrators with respect to such actionsIndemnification Claims, notices(iv) resolve any Indemnification Claims, and determinations by (v) take all actions necessary in the judgment of the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any for the accomplishment of the foregoing and all Shareholders.
4.2. Without limiting the generality of the foregoingother terms, the Shareholder Representative shall have full power conditions and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions limitations of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement. Accordingly, the Payment Agent AgreementShareholder Representative has unlimited authority and power to act on behalf of each shareholder of SoftMagic with respect to this Agreement and the Escrow Agreement and the disposition, share transfer deeds settlement or other handling of all Indemnification Claims, rights or obligations arising from and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and taken pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect The shareholders of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall SoftMagic will be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees and Puma shall be entitled to ratify and confirm, and hereby ratifies and confirms, rely on any action taken by or decision of the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Representative. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including will incur no liability with respect to potential any action taken or contingent liabilities of suffered by him in reliance upon any notice, direction, instruction, consent, statement or other document believed by him to be genuine and to have been signed by the Shareholders hereunderproper person (and shall have no responsibility to determine the authenticity thereof).
4.4. The Shareholder Representative shall not be liable to the Shareholders , nor for any act done other action or omitted hereunder in its capacity as the Shareholder Representativeinaction, except to the extent caused by its his own willful misconduct, bad faith or gross negligence or bad faithnegligence. In all questions arising in respect of any matter arising under this Agreement or the Escrow Agreement, the Shareholder Representative may rely on the advice of counsel counsel, and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and will not jointly (based on each Shareholder’s pro rata share be liable to anyone for anything done, omitted or suffered in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred good faith by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as based on such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earningsadvice. The Shareholder Representative will not be liable for required to take any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or action involving any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for expense unless the payment of such fees and expenses shall be delivered by expense is made or provided for in a manner satisfactory to him. At any time during the term of the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion Agreement, holders of a majority of the Escrow Shares can appoint a new Shareholder Representative’s responsibilitiesRepresentative by written consent by sending notice and a copy of the written consent appointing such new Shareholder Representative signed by holders of a majority of the Escrow Shares to Puma and the Escrow Agent. All amounts remaining Such appointment will be effective upon the later of the date indicated in the Expense Fund upon termination of consent or the Shareholder Representative’s engagement (date such consent is received by Puma and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallAgent.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Puma Technology Inc)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption of this Agreement, and without any further action of any of the Shareholders, including, for the avoidance of doubt, each Shareholder irrevocably approves holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients, Phantom Award Holders or the constitution and appointment ofCompany, and hereby irrevocably constitutes and appoints NGulliver ▇▇▇ ▇▇▇▇▇ is hereby irrevocably nominated, constituted and appointed as the exclusive representative, agent and true and lawful attorney-in-fact of each of the Shareholders, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders (the “Shareholder Representative”), with full power of substitution by the Shareholders or, following the Closing, by the Founders (and, if so substituted, the Shareholder Representative and/or the Founders will promptly notify Parent of such substitution) to act in the name, place and stead of the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders with respect to this Agreement, as the same may be from time to time amended, and with respect to the transactions contemplated hereby; to act as “purchaser representative” (as defined in Rule 501(i) of Regulation D under the Securities Act) for any Shareholder, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holder, Transaction Bonus Unit Recipient or Phantom Award Holder that is not an Accredited Investor; and to do or refrain from doing all such acts and things, and to execute all such documents (including any amendments to this Agreement and any requests, notices, waivers and consents), in each case as the rightsShareholder Representative shall deem necessary, powers and obligations appropriate or desirable in connection with this Agreement, any agreements contemplated by this Section 4, Agreement or any of the transactions contemplated hereby or thereby; and any successor Shareholder Representative(sto enforce and protect (or refrain from enforcing) designated under this Section 4 as the sole, exclusive, true rights and lawful agent, representative and attorney-in-fact for and on behalf interests of all the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and each of themPhantom Award Holders (including by asserting or defending any claim, with respect to consenting to, compromising or settling any and all matters such claim or conducting any negotiation regarding any such claim) arising out of or under or in connection with any manner relating to this Agreement, any agreements contemplated by this Agreement or any of the transactions contemplated hereby or thereby.
(excluding pursuant b) All decisions, actions (or failures to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any take an action or omitting to take action on behalf omissions of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsan action), notices, instructions and communications and determinations by or on behalf of the Shareholders in accordance herewith Shareholder Representative shall be final, binding and conclusive on the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders and may be relied upon by Parent, Merger Sub and their Affiliates as the decisions, actions (or failures to take an action or omissions of an action), notices, instructions and communications of the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders. The Shareholder Representative and each Shareholder, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holder, Transaction Bonus Unit Recipient and Phantom Award Holder shall be entitled to disregard any notices or communications given or made by the Shareholder Representative and all such actionsany Shareholder, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitationfor the avoidance of doubt, Escrow Agreementeach holder of unvested Restricted Shares, the Payment Agent AgreementOption Holder, share transfer deeds Transaction Bonus Unit Recipient and endorsements and termination instruments and including amendments that may require price reductions Phantom Award Holder not given or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in made through the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to any of the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder RepresentativeShareholders, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided thatincluding, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders for any act done or omitted by the Shareholder Representative in all cases the aggregate good faith pursuant to this Agreement or any agreement ancillary hereto or any mistake of fact or Law unless caused by the Shareholder Representative’s indemnity coverage from knowing and material willful misconduct in the Shareholders signing performance of its duties under this Agreement or otherwise bound hereby shall sum to 100%) indemnify Agreement. The Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders will indemnify, defend and hold harmless the Shareholder Representative from and hold the Shareholder Representative harmless against any lossand all losses, liabilityliabilities, deficiencydamages, damageclaims, costpenalties, claimfines, penaltyforfeitures, fineactions, forfeiturefees, or expense costs and expenses (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment)) (collectively, or actions incurred by the Shareholder “Representative and Losses”) arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder execution and under the Transaction Documents (collectively, “Representative Losses”)performance of this Agreement and any agreements ancillary hereto, in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, knowing and material willful misconduct, gross negligence or bad faith on the part misconduct of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders the amount of such indemnified Representative Loss to the extent attributable to such fraud, knowing and material willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Shareholder Representative Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the ShareholdersAmount; provided, that while this section Section 9.16(b) allows the Shareholder Representative to be paid from the aforementioned sources of fundssource, this does not relieve the Shareholders Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its any of his own funds on behalf of the Shareholders Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding Notwithstanding anything in this Agreement to the contrary, the any restrictions or limitations on liability or indemnification obligations ofof the Shareholders, or provisions limiting including, for the recourse against non-recourse parties otherwise applicable toavoidance of doubt, the Shareholders each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.59.16. The Purchaser foregoing indemnities will survive the Closing, the resignation or removal of the Shareholder Representative or the termination of this Agreement. In taking any action or refraining from taking any action whatsoever the Shareholder Representative shall be protected in relying upon any notice, paper or other document reasonably believed by it to be genuine, or upon any evidence reasonably deemed by it to be sufficient. The Shareholder Representative may consult with counsel in connection with its duties and shall be fully protected in any act taken, suffered or permitted by it in good faith in accordance with the advice of counsel. Parent, Merger Sub and their respective Affiliates shall not be liable to in any Shareholder manner whatsoever for any act done action taken or omitted hereunder not taken in reliance upon the actions taken or not taken or communications or writings given or executed by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative(c) The Shareholders, including, for the Escrow Agent to hold on behalf avoidance of the Shareholders as a fund for the fees doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders Phantom Award Holders will not receive any interest or earnings on the Shareholder Representative Expense Fund Amount and irrevocably transfer and assign to the Shareholder Representative any ownership right that they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Shareholder Representative Expense Fund Amount other than as a result of its gross negligence or knowing and material willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Shareholder Representative Expense Fund Amount shall be available for the payment of all fees and expenses reasonably incurred retained by the Shareholder Representative for such time as the Shareholder Representative shall determine in performing its duties under this Agreement and his sole discretion. Any amounts from the agreements ancillary hereto; provided Shareholder Representative Expense Amount that any portion of remain unused through the Expense Fund not ultimately required for date determined by the payment of such fees and expenses Shareholder Representative pursuant to the preceding sentence shall be delivered by the Escrow Agent to the Paying Agent for further distribution distributed to the Shareholders based on in accordance with their ownership interests in the Waterfall following Company and entitlement to consideration in accordance with the completion terms of this Agreement. For tax purposes, the Shareholder Representative Expense Amount will be treated as having been received and voluntarily set aside by the Shareholders, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holders, Transaction Bonus Unit Recipients and Phantom Award Holders at the time of Closing.
(d) The grant of authority provided for herein (i) is coupled with an interest and shall be irrevocable and survive the death, incompetency, bankruptcy or liquidation of any Shareholder, including, for the avoidance of doubt, each holder of unvested Restricted Shares, Option Holder, Transaction Bonus Unit Recipient and Phantom Award Holder and (ii) shall survive the consummation of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfalltransactions contemplated hereby.
4.7. To the extent required in order for the Company to exercise rights (e) Any Action against Parent or any of its subsidiaries that is brought by or on behalf of a Shareholder, including, for the Shareholders prior to Closing pursuant avoidance of doubt, each holder of unvested Restricted Shares, Option Holder, Transaction Bonus Unit Recipient or Phantom Award Holder, either individually or as a group, with respect to this Agreement, including Agreement or the exercise of the right to waive rights or termination transactions contemplated by this Agreement pursuant to Section 3 above, may be brought only by the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)Representative and/or either Founder.
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N(a) The Parties have agreed that it is desirable to designate ▇▇▇▇▇ ▇▇▇▇▇▇ (and if ▇▇▇▇▇ ▇▇▇▇▇▇ is unable or unwilling to serve, then ▇▇▇▇ ▇▇▇▇▇▇) to serve as the representative of the holders of the Company Stock (the “Shareholder Representative”) with all for certain limited purposes as set forth herein. The approval of this Agreement by the rightsholders of the Company Stock will constitute ratification and approval of such designation. The Shareholder Representative will have such power and authority necessary to carry out the functions assigned to the Shareholder Representative under this Agreement and the Escrow Agreement, powers including the power and obligations contemplated by this Section 4authority:
(i) to execute and deliver the Escrow Agreement, and to enter into any successor amendments, modifications and/or waivers in respect thereof;
(ii) to enforce, defend and protect the rights and interests of the holders of the Company Stock following the Closing under Article IX of this Agreement and under the Escrow Agreement, and to take any and all actions that the Shareholder Representative(s) designated Representative believes are necessary or appropriate under Article IX of this Section 4 as Agreement and under the sole, exclusive, true and lawful agent, representative and attorney-in-fact Escrow Agreement for and on behalf of all Shareholdersthe holders of the Company Stock, including, without limitation, asserting, pursuing or defending any claim by or against Parent or the Surviving Corporation, consenting to, compromising or settling any such claim, and each of themconducting negotiations with Parent or Surviving Corporation; and
(iii) to make, with respect execute, acknowledge and deliver all such other agreements, notices, requests, instructions and other writings, and, in general, to do any and all matters arising out of things and to take any and all actions that the Shareholder Representative may consider necessary or proper in connection with this Agreement (excluding pursuant to Section 10.2), carrying out the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf responsibilities of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions Article IX of this Agreement and the Escrow Agreement; .
(b) The Shareholder Representative will be entitled to negotiate engage such counsel, experts and sign all documents other agents as the Shareholder Representative deems necessary or proper in connection with performing its obligations hereunder and under the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, and will be promptly reimbursed by the Payment Agent Agreementholders of the Company Stock for all reasonable expenses, share transfer deeds disbursements and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken advances incurred by the Shareholder Representative in connection with such matterscapacity upon demand, pro rata based upon each such holder’s share of the Company Stock as of the Closing. By virtue Each holder of executing or adopting this Agreementthe Company Stock shall indemnify and hold harmless the Shareholder Representative, each Shareholder agrees to ratify pro rata based upon such holder’s share of all Company Stock as of the Closing, from any and confirm, and hereby ratifies and confirms, any action taken all Damages that are incurred by the Shareholder Representative in as a result of actions taken, or actions not taken, by the exercise Shareholder Representative herein, except to the extent that such Damages arise from the gross negligence or willful misconduct of the power Shareholder Representative.
(c) All amounts received by the Shareholder Representative on behalf of attorney granted the holders of the Company Stock (whether under this Agreement or the Escrow Agreement), will be promptly paid by the Shareholder Representative to the holders of the Company Stock, in accordance with Section 1.7; provided, however, that the Shareholder Representative will be entitled to set off any amounts payable to the Shareholder Representative under Section 10.13(b) against amounts otherwise payable to holders of the Company Stock pursuant to this Section 10.13(c).
(d) Parent and Surviving Corporation shall have the right to rely upon all actions taken or not taken by the Shareholder Representative pursuant to this Section 4.2Agreement and the Escrow Agreement, all of which power of attorney, being coupled with an interest, is irrevocable and actions or omissions shall survive be legally binding upon the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power holders of the Company on an as converted basis shall designate in writing to Purchaser within five Stock.
(5e) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a the Shareholder Representative and resigns, dies or becomes incapable of acting, the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt holders of a written request delivered by Purchaser to majority of the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court Company Stock as of competent jurisdiction to appoint a Shareholder the Closing shall choose another holder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4Agreement.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Goldleaf Financial Solutions Inc.)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) Each Catapult Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints Nconfirms the appointment of D▇▇▇▇ ▇▇▇▇▇ (as the “Shareholder Representative”) with all the rights, powers ” and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative his/its agent and attorney-in-fact for with full power of substitution to act from and after the date of this Agreement and to do any and all things and execute any and all documents on behalf of all Shareholderssuch Catapult Shareholder that may be necessary, convenient or appropriate to facilitate the consummation of the transactions contemplated by this Agreement, including but not limited to: (i) execution of the other documents and each certificates pursuant to this Agreement; (ii) receipt of thempayments under or pursuant to this Agreement, with respect to any and all matters arising out of or in connection accordance with this Agreement Agreement, subject to the terms hereof; (excluding iii) receipt and forwarding of notices and communications pursuant to Section 10.2)this Agreement; (iv) administration of the provisions of this Agreement; (v) giving or agreeing to, the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding uponCatapult Shareholder, any and all Shareholders.
4.2. Without limiting the generality of the foregoingconsents, waivers, amendments or modifications deemed by the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8Representative, in accordance with the Waterfall his sole and in accordance with the terms and conditions of absolute discretion, to be necessary or appropriate under this Agreement and the Escrow Agreement; to negotiate and sign all execution or delivery of any documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documentstherewith; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law vi) amending (or waiving any provisions of) this Agreement or any other legal proceeding) and document contemplated hereby to receive all notices, requests and demands that may be made under and delivered to Cerberus pursuant to this Agreement; (vii) taking actions the Shareholder Representative is expressly authorized to take pursuant to the other provisions of this Agreement; (viii) disputing or refraining from disputing, the Paying Agent on behalf of such Catapult Shareholder relative to any amounts to be received or paid by such Catapult Shareholder under this Agreement, any claim made by Cerberus under this Agreement; (ix) negotiating and compromising, on behalf of such Catapult Shareholder, any dispute that may arise under, and exercising or refraining from exercising any remedies available under, this Agreement; (x) executing, on behalf of such Catapult Shareholder, any settlement agreement, release or other document with respect to such dispute or remedy; and (xi) engaging attorneys, accountants, agents or consultants on behalf of such Catapult Shareholder in connection with this Agreement and the Escrow Agreement. From and after the Closing, the Purchaser paying any fees related thereto.
(b) Cerberus shall be entitled to deal exclusively fully protected in dealing with the Shareholder Representative in respect under this Agreement and may rely upon the authority of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees capacity to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise act on behalf of the power of attorney granted Catapult Shareholders. Any payment by Cerberus to the Shareholder Representative pursuant to the extent authorized under this Section 4.2Agreement, which power of attorneyshall be considered a payment by Cerberus to the Catapult Shareholders, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholderas applicable.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5c) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Catapult Shareholders in its capacity as such, for any liability of the Catapult Shareholders or for any error of judgment, or any act done or step taken or omitted hereunder by it that it believed to be in good faith or for any mistake in fact or law, or for anything which it may do or refrain from doing in connection with this Agreement. The Shareholder Representative may seek the advice of legal counsel in the event of any dispute or question as to the construction of any of the provisions of this Agreement or its duties hereunder, and, without limiting the foregoing, D▇▇▇▇ ▇▇▇▇ shall incur no Liability in its capacity as the Shareholder Representative, except and shall be fully protected with respect to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share taken, omitted or suffered by it in good faith in accordance with the Waterfall compared advice of such counsel.
(d) Each Catapult Shareholder, severally and not jointly, hereby agrees to indemnify the Shareholder Representative (in its capacity as such) against, and to hold the Shareholder Representative (in its capacity as such) harmless from, its relative pro rata shares percentage of any and all Shareholders signing this Agreement Losses of whatever kind which may at any time be imposed upon, incurred by or otherwise bound hereby; provided that, for asserted against the avoidance of doubt, Shareholder Representative in all cases the aggregate such capacity in any way relating to or arising out of the Shareholder Representative’s indemnity coverage from the Shareholders signing action or failure to take action pursuant to this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance herewith or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), therewith in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4capacity.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Agreement and Plan of Merger (Cerberus Cyber Sentinel Corp)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption approval of the Merger and this Agreement by the Indemnifying Parties, each of the Indemnifying Parties shall be deemed to have agreed to appoint, and by signing this Agreement, each Shareholder irrevocably approves the constitution and appointment ofEnterprise Partners VI, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 LP as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact of each Indemnifying Party, as the Shareholder Representative for and on behalf of all Shareholdersthe Indemnifying Parties, to give and receive notices and communications, to agree to the adjustment (if any) of the Aggregate Consideration Amount pursuant to the terms of Section 2.6(h) hereof, to authorize payment to any Indemnified Party from the Escrow Fund, as appropriate, in satisfaction of claims by any Indemnified Party, to object to the foregoing adjustments or payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to such claims, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any Indemnifying Party or by any such Indemnifying Party against any Indemnified Party, any dispute between any Indemnified Party and all matters arising out of or any such Indemnifying Party, any dispute relating to the Company Assumed Liabilities Report, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreementtransactions contemplated hereby, FOIA confidential treatment requested: [***] indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. All actions, notices, communications Confidential treatment has been requested with respect to such omitted portions. and determinations by to take all other actions that are either (i) necessary or on behalf appropriate in the judgment of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actionsfor the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed by the Indemnifying Parties from time to time upon not less than thirty (30) days prior written notice to Parent; provided, noticeshowever, and determinations by that the Shareholder Representative shall conclusively may not be deemed removed unless holders of at least a two-thirds interest of the Escrow Fund agree to have been authorized by, such removal and shall be binding upon, any and all Shareholders.
4.2to the appointment of a new Shareholder Representative. Without limiting the generality of Notwithstanding the foregoing, the Shareholder Representative shall have full power the right to resign upon at least sixty (60) days’ prior written notice to Parent and authority to: from and after the ClosingIndemnifying Parties; provided, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreementhowever, and such portion that if holders of at least a two-thirds interest of the Escrow Amount as is remaining at Fund shall not have appointed a new Shareholder Representative within such sixty (60) day period (the end of “Vacancy Date”), then from the escrow period contemplated under Section 2.8Vacancy Date until the date on which such holders shall have appointed a new Shareholder Representative, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement such Indemnifying Parties shall be deemed to have authorized, and the Escrow Agreement; Agent shall, deliver payment to negotiate and sign all documents in connection with Parent pursuant to the Transaction and amendments thereto, whether before or after Closing (includingterms of Section 8.4(f) hereof, without limitation, Escrow Agreement, regard to the Payment Agent Agreement, share transfer deeds provisions of Section 8.4(g) and endorsements and termination instruments and including amendments that may require price reductions or holdbacksSection 8.4(h); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise . No bond shall be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderIndemnifying Parties.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder as Shareholder Representative while acting in its capacity as good faith. The Indemnifying Parties on whose behalf the Shareholder Representative, except Total Escrow Amount was contributed to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance Escrow Fund shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents Shareholder Representative (collectively, “Shareholder Representative LossesExpenses”). The Indemnifying Parties have agreed to pay the out-of-pocket expenses (including attorney’s fees and court costs) of the Shareholder Representative in this Article VIII (“Shareholder Representative Deposit”). The Shareholder Representative shall deduct $50,000 from the Merger Cash and establish and maintain such amount in a separate escrow account (the “Shareholder Representative Account”) for the Shareholder Representative Deposit solely for the purposes of paying, in each case as from time-to-time, 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 out-of-pocket expenses incurred by the fraudShareholder Representative in connection with performing and exercising its duties, willful misconductrights and responsibilities under this Agreement on behalf of the Indemnifying Parties and distributing any remaining Shareholder Representative Deposit to the Indemnifying Parties in accordance with their respective contribution to the Shareholder Representative Deposit. The Shareholder Representative hereby acknowledges and agrees that the Shareholder Representative Deposit shall be used strictly in accordance with the terms and provisions of this Agreement.
(c) Concurrent with the final distribution of the Total Escrow Amount, gross negligence the Shareholder Representative shall be entitled to receive the amounts due and payable to the Shareholder Representative or bad faith on to such other parties pursuant to this Article VIII (to the part extent such amounts have not theretofore been paid from the Shareholder Representative Deposit). The Indemnifying Parties shall be entitled to receive any remaining Shareholder Representative Deposit after giving effect to the distributions above. A decision, act, consent or instruction of the Shareholder Representative, including an amendment, extension or waiver of this Agreement pursuant to Section 9.3 and Section 9.4 hereof, shall constitute a decision of the Shareholder Representative will reimburse Indemnifying Parties and shall be final, binding and conclusive upon the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, Indemnifying Parties; and Parent may rely upon any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Funddecision, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholdersact, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered consent or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal instruction of the Shareholder Representative as being the decision, act, consent or instruction of the termination Indemnifying Parties. Parent, Sub and Exchange Agent is hereby relieved from any liability to any person for any acts done by them in accordance with such decision, act, consent or instruction of this Agreementthe Shareholder Representative. For FOIA confidential treatment requested: [***] indicates that certain information contained herein has been omitted and filed separately with the avoidance of doubt Securities and notwithstanding Exchange Commission. Confidential treatment has been requested with respect to such omitted portions.
(d) Notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable have no authority to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred any Indemnifying Party in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside any claim by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable an Indemnified Party seeking recovery for any loss of principal Losses outside of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallFund.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue (a) In order to administer efficiently (i) the adjustment to the number of Acquisition Shares, (ii) the waiver of any condition to the obligations of the execution or adoption of this Agreement, each Shareholder irrevocably approves Shareholders to consummate the constitution and appointment oftransactions contemplated hereby, and (iii) the defense and/or settlement of any claims for which the Shareholders may be required to indemnify the Buyer or the Company pursuant to Section 7 hereof, the Shareholders hereby irrevocably constitutes and appoints N▇designate Mart▇▇ ▇▇▇▇ ▇▇ their representative (the “"Shareholder Representative”").
(b) The Shareholders hereby authorize the Shareholder Representative (i) to make all decisions relating to the adjustment to the number of Acquisition Shares, (ii) to take all action necessary in connection with the waiver of any condition to the obligations of the Shareholders to consummate the transactions contemplated hereby, or the defense and/or settlement of any claims for which the Shareholders may be required to indemnify the Buyer or the Company pursuant to Section 7 hereof, (iii) to give and receive all the rights, powers and obligations contemplated by notices required to be given under this Section 4Agreement, and any successor Shareholder Representative(s(iv) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to take any and all matters arising out of or in connection with this Agreement (excluding pursuant additional action as is contemplated to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations be taken by or on behalf of the Shareholders in accordance herewith shall be given by the terms of this Agreement or made by the Escrow Agreement.
(c) In the event that the Shareholder Representative dies, becomes unable to perform his responsibilities hereunder or resigns from such position, Shareholders holding, prior to the Closing, a majority of the Shares as set forth on SCHEDULE I attached hereto shall select another representative to fill such vacancy and such substituted representative shall be deemed to be the Shareholder Representative for all such actions, notices, purposes of this Agreement.
(d) All decisions and determinations actions by the Shareholder Representative shall conclusively be deemed to have been authorized bybinding upon all of the Shareholders, and no Shareholder shall be binding uponhave the right to object, any and all Shareholdersdissent, protest or otherwise contest the same.
4.2. Without limiting the generality (e) By their execution of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and Shareholders agree that:
(1) the Escrow Agreement. From and after the Closing, the Purchaser Buyer shall be entitled able to deal exclusively with rely conclusively on the instructions and decisions of the Shareholder Representative in respect relating to the adjustment of the number of Acquisition Shares and the settlement of any matter arising under claims for indemnification by the Transaction Documents, and Buyer or the Shareholders, in their relationship with the Purchaser, shall Company pursuant to Section 7 hereof or any other actions required or permitted to be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirmhereunder, and hereby ratifies and confirms, no party hereunder shall have any cause of action against the Buyer for any action taken by the Shareholder Representative Buyer in reliance upon the exercise instructions or decisions of the power Shareholder Representative;
(2) all actions, decisions and instructions of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power shall be conclusive and binding upon all of attorney, being coupled with an interest, is irrevocable the Shareholders and no Shareholder shall survive the death, incapacity or incompetence have any cause of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should action against the Shareholder Representative diefor any action taken, become legally incapacitated decision made or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, instruction given by the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice except for fraud or willful breach of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of by the Shareholder Representative’s indemnity coverage from ;
(3) the provisions of this Subsection 1.06 are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Shareholder may have in connection with the transactions contemplated by this Agreement;
(4) remedies available at law for any breach of the provisions of this Subsection 1.06 are inadequate; therefore, the Buyer and the Company shall be entitled to temporary and permanent injunctive relief without the necessity of proving damages if either the Buyer or the Company brings an action to enforce the provisions of this Subsection 1.06; and
(5) the provisions of this Subsection 1.06 shall be binding upon the executors, heirs, legal representatives and successors of each Shareholder, and any references in this Agreement to a Shareholder or the Shareholders signing this Agreement shall mean and include the successors to the Shareholders' rights hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise bound hereby shall sum to 100%otherwise.
(f) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the All fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to shall be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings in proportion to their ownership of Shares as set forth on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary SCHEDULE I attached hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Share Purchase Agreement (International Integration Inc)
Shareholder Representative. 4.1. By virtue (a) The Shareholder Representative will act as the agent of the execution Sellers in connection with, and to facilitate the consummation of the transactions contemplated by, this Agreement and the other documents contemplated hereby, and in connection with the activities to be performed on behalf of the Sellers under this Agreement, and will have the full power and authority to settle and resolve any disputes which may arise hereunder and to agree to or adoption modify the methodology or timeframe by which such disputes are to be resolved. Each of the Sellers hereby authorizes the Shareholder Representative to take any action on the Sellers’ behalf in connection with the Sellers’ performance or enforcement of this Agreement, each including (i) negotiating, settling or compromising any adjustment to the Purchase Price, including under Section 2.3, (ii) performing all covenants to be performed by the Sellers hereunder, (iii) negotiating, asserting, prosecuting, settling or compromising on behalf of the Sellers any claim for indemnification against MFRM or the Buyer, (iv) negotiating, defending, settling or compromising on behalf of the Sellers any claims against any Seller arising under this Agreement or (v) entering into the Escrow Agreement and negotiating, asserting, prosecuting, defending, settling or compromising on behalf of the Sellers any disputes or claims that may arise under the Escrow Agreement. MFRM and the Buyer shall be entitled to rely exclusively upon the communications of the Shareholder irrevocably approves Representative relating to the constitution foregoing matters and appointment of, such communications shall be deemed to be made on behalf of any or all Sellers and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (neither MFRM nor the “Buyer shall be required to comply with any instructions or communications from a Seller even if such instructions or communications are contrary to the instructions or communications of the Shareholder Representative”.
(b) Neither MFRM nor the Buyer (a) need be concerned with all the rights, powers and obligations contemplated by this Section 4, and any successor authority of the Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and Representative to act on behalf of all ShareholdersSellers as provided hereunder, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith b) shall be given held liable or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, accountable in any and all Shareholders.
4.2. Without limiting the generality manner for any act or omission of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholdercapacity.
4.3. (c) The Shareholder Representative may resign at any time. Should the Shareholder Representative dieSellers agree to, become legally incapacitated or bankruptjointly and severally, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, losses or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions damages incurred by the Shareholder Representative (including reasonable fees and expenses of any legal counsel retained by the Shareholder Representative) arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder. The Shareholder Representative shall not have any liability to any Seller or other Person arising out of or relating to the Shareholder Representative’s actions under this Agreement, the Escrow Agreement or any other certificate, exhibit, annex, schedule or other document or agreement delivered or entered into in connection with this Agreement, or with respect to any other matter in this Agreement, the Escrow Agreement or any other certificate, exhibit, annex, schedule or other document or agreement delivered or entered into in connection with this Agreement, including any of his negligent acts or omissions.
(d) Unless a Seller or other Person entitled to receive payments from or at the direction of the Shareholder Representative hereunder and under the Transaction Documents (collectively, “Representative Losses”), has provided in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated writing wire transfer instructions to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse shall pay any amounts due to such Person from the Shareholders Shareholder Representative by check payable to the amount order of such indemnified Representative Loss to the extent attributable Person and mailed to such fraud, willful misconduct, gross negligence Person’s last known address. The Shareholder Representative may rely on the wire transfer instructions or bad faith. If not paid directly notice address provided by each Seller in writing until such time as such Seller provides written notice of new wire transfer instructions or notice address to the Shareholder Representative by (which shall be effective only upon the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder receipt thereof by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will shall not be responsible or otherwise liable for any loss of principal of the Expense Fund other than misdirected payments (or to see that any Person receives any such payment) under this Agreement because such Person’s wire transfer instructions or notice address is incorrect, illegible or outdated.
(e) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall serve as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and until he resigns or is otherwise unable or unwilling to serve. In the agreements ancillary hereto; provided event that any portion a Shareholder Representative resigns from such position or is otherwise unable or unwilling to serve, the Sellers shall select, by the vote or consent of Sellers whose aggregate Allocation Percentages immediately prior to the Expense Fund not ultimately required for Closing exceed 50%, a successor representative to fill such vacancy, shall provide prompt written notice to the payment Buyer of such fees change and expenses such substituted representative shall then be delivered by the Escrow Agent deemed to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of be the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination Representative for all purposes of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Purchase and Sale Agreement (Mattress Firm Holding Corp.)
Shareholder Representative. 4.1. By virtue of The Shareholders have irrevocably made, constituted and appointed the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution Representative as their agent and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact fact, for such person and in such person's name, (i) to execute and deliver to the Buyer on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or on behalf of all such Shareholders which the Shareholder Representative deems appropriate in his discretion in connection with the Transaction Documents; and to prosecutethis Escrow Agreement as effectively as such person could act for himself, defend and settle in the Shareholder Representative’s discretion all indemnification disputes herself or itself, (including hiring counsel and other litigation assistance and including in court of law or any other legal proceedingii) and to receive all notices, requests claim notices and demands that may be made all of the notices and communications directed to such person under and pursuant to this Agreement, the Paying Agent Escrow Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, take any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve (or to appoint his or her successor determine to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5take no action) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity thereto as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on deem appropriate in his discretion as effectively as such person could act for himself, herself or itself, including, without limitation, the advice settlement or compromise of counsel any dispute relating to the Escrow Agreement or the Escrow Fund, or any other dispute or controversy relating to this Escrow Agreement, and any action based upon (iii) to execute and deliver all instruments and documents of every kind incident to the foregoing to all intents and purposes and with the same effect as such reliance shall relieve person could do personally, and each Shareholder has ratified and confirms as his, her or its own act, all that the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared do or cause to be done pursuant to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the provisions hereof. Each Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum has further agreed to 100%) indemnify and defend the Shareholder Representative and to hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, cost or expense (including suffered or incurred without negligent conduct or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the his duties as Shareholder Representative’s duties hereunder , including the costs and under the Transaction Documents (collectivelyexpenses incurred by such Shareholder Representative in defending against any claim of liability in connection herewith. The Shareholder Representative is specifically authorized to reimburse himself for any and all such loss, “Representative Losses”)liability, in each case as such Representative Loss is cost or expense suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence incurred without negligent conduct or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount out of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Escrow Fund not ultimately required for the payment of such fees that becomes actually and expenses shall be delivered by the Escrow Agent finally payable and distributable to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, accordance with the provisions of this Section 4 shall apply6(a), mutatis mutandis, 6(b) or 6(c) before such funds are disbursed or distributed to any of the Company (as if it was a Shareholder Representative)Shareholders.
Appears in 1 contract
Sources: Acquisition Agreement (Quanex Corp)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption approval of the Acquisition and this AgreementAgreement by the Shareholders, each Shareholder irrevocably approves of the constitution and appointment of, and hereby irrevocably constitutes and appoints NShareholders shall be deemed to have agreed to appoint ▇▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative for and on behalf of all Shareholdersthe Shareholders to give and receive notices and communications, to authorize payment to any Indemnified Party from the Escrow Fund in satisfaction of claims by any Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to such claims, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any Shareholder or by any such Shareholder against any Indemnified Party or any dispute between any Indemnified Party and all matters arising out of or any such Shareholder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed by the Shareholders from time to time upon not less than thirty (30) days prior written notice to Purchaser; provided, however, that the Shareholder Representative may not be removed unless holders of a two-thirds interest of the Escrow Fund agree to such removal and to prosecutethe identity of the substituted agent. Notwithstanding the foregoing, defend and settle a vacancy in the position of Shareholder Representative may be filled by the holders of a majority in interest of the Escrow Fund. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderShareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with whose behalf the Waterfall compared Escrow Amount was contributed to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby Escrow Fund shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents Shareholder Representative (collectively, “Shareholder Representative LossesExpenses”). Following the termination of the Escrow Period, in each case as such the resolution of all Unresolved Claims and the satisfaction of all claims made by Indemnified Parties for Losses, the Shareholder Representative Loss is suffered or incurred; providedshall have the right to recover Shareholder Representative Expenses from the Escrow Fund prior to any distribution to the Shareholders, that in the event that and prior to any such distribution, shall deliver to the Escrow Agent a certificate setting forth the Shareholder Representative Loss is finally adjudicated to have been directly caused by the fraudExpenses actually incurred. A decision, willful misconductact, gross negligence consent or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount including an amendment, extension or waiver of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above8.3 and Section 8.4 hereof, shall constitute a decision of the provisions Shareholders and shall be final, binding and conclusive upon the Scheme Shareholders; and the Escrow Agent and Purchaser may rely upon any such decision, act, consent or instruction of this Section 4 shall applythe Shareholder Representative as being the decision, mutatis mutandisact, consent or instruction of the Shareholders. The Escrow Agent and Purchaser are hereby relieved from any liability to any person for any acts done by them in accordance with such decision, act, consent or instruction of the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution approval of the Merger and this Agreement by the Escrow Participants and without any further action of any of the Escrow Participants or adoption of this Agreementthe Company, each Shareholder irrevocably approves the constitution and appointment ofFortis Advisors LLC, and a Delaware limited liability company, is hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 appointed as the sole, exclusive, Shareholder Representative and as the true and lawful agent, representative and attorney-in-fact for and on behalf exclusive agent under this Agreement and the Escrow Agreement. The rights of all Shareholders, the Escrow Participants to receive disbursements from the Escrow Fund and each Holdback Account shall be subject to the right of them, with respect Fortis Advisors LLC (the "Shareholder Representative") to take any and all matters arising out of actions and make any and all decisions required or in connection with this Agreement (excluding pursuant permitted to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given taken or made by the Shareholder Representative and all such actionsunder this Agreement, notices, and determinations by the Escrow Agreement or the Shareholder Representative shall conclusively be deemed Engagement Agreement, including the exercise of the right to: (i) give and receive notices and communications under Section 2.6, Article 8 or the Escrow Agreement; (ii) authorize delivery to have been authorized byParent of cash from the Escrow Fund pursuant to Section 2.6(f)(ii) or in satisfaction of claims for indemnification made by Parent under Article 8; (iii) object to, agree to, negotiate, bring matters before the Neutral Accounting Arbitrator, or enter into settlements and shall be binding uponcompromises with respect to, any adjustment to the Merger Consideration pursuant to Section 2.6; (iv) object to claims for indemnification made by Parent under Article 8; (v) agree to, negotiate, enter into settlements and compromises of and comply with court orders with respect to claims for indemnification made by Parent under Article 8; (vi) undertake any defense of Third‑Party Claims; and (vii) take all Shareholders.
4.2actions necessary or appropriate in the good faith judgment of the Shareholder Representative for the accomplishment of the foregoing. Without limiting the generality of Notwithstanding the foregoing, the Shareholder Representative shall have full power no obligation to act on behalf of the Escrow Participants, except as expressly provided herein, in the Escrow Agreement and authority to: from and after in the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Shareholder Representative Engagement Agreement, and such portion for purposes of the Escrow Amount as is remaining at the end clarity, there are no obligations of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect any ancillary agreement, schedule, exhibit or the Disclosure Schedule. The identity of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirmmay be changed, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five may be appointed, from time to time (5including in the event of the resignation or the death, disability or other incapacity of the Shareholder Representative) Business Days after receipt of a written request delivered by Purchaser to Escrow Participants whose aggregate Escrow Participation Percentages exceed sixty percent (60%), and any such successor shall succeed the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement immunities and rights to indemnification shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. For No bond shall be required of the avoidance Shareholder Representative. From and after the Effective Time, a decision, act, consent or instruction of doubt the Shareholder Representative taken under this Agreement, the Escrow Agreement or the Shareholder Representative Engagement Agreement shall be final, binding and notwithstanding anything conclusive upon each Escrow Participant and such Escrow Participant's successors as if expressly confirmed and ratified in writing by such Escrow Participant, and all defenses which may be available to any Escrow Participant to contest, negate or disaffirm the action of the Shareholder Representative taken in good faith under this Agreement, the Escrow Agreement or the Shareholder Representative Engagement Agreement are waived.
(b) At the Closing, Parent shall make a cash payment to the contraryShareholder Representative, by wire transfer of immediately available funds to an account designated by the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable Shareholder Representative prior to the indemnities provided Closing Date, in an amount equal to the Representative Reimbursement Amount. The Representative Reimbursement Amount shall be held by the Shareholder Representative for (i) reimbursement payable to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done 9.1 or omitted hereunder (ii) use as otherwise determined by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earningsAdvisory Group. The Shareholder Representative will is not be liable providing any investment supervision, recommendations or advice and shall have no responsibility or liability for any loss of principal of the Expense Fund Representative Reimbursement Amount other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate fundsis not acting as a withholding agent or in any similar capacity in connection with the Representative Reimbursement Amount, and has no tax reporting or income distribution obligations. The Escrow Participants will not use these receive any interest on the Representative Reimbursement Amount and assign to the Shareholder Representative any such interest. Subject to Advisory Group approval, the Shareholder Representative may contribute funds to the Representative Reimbursement Amount from any consideration otherwise distributable to the Escrow Participants. Any portion of the Representative Reimbursement Amount that has not been utilized by the Shareholder Representative pursuant to the terms of this Agreement on or prior to the date specified by the Shareholder Representative on or after the Escrow Release Date, shall be paid by the Shareholder Representative to the Escrow Agent for distribution to the Escrow Participants pro rata in accordance with their respective Escrow Participation Percentages.
(c) Certain Escrow Participants have entered into an engagement agreement (the "Shareholder Representative Engagement Agreement") with the Shareholder Representative to provide direction to the Shareholder Representative in connection with its operating expenses services under this Agreement, the Escrow Agreement and the Shareholder Representative Engagement Agreement (such Escrow Participants, including their individual representatives, collectively hereinafter referred to as the "Advisory Group"). Neither the Shareholder Representative nor its members, managers, directors, officers, contractors, agents and employees nor any member of the Advisory Group (collectively, the "Shareholder Representative Group"), shall be liable for any liability, loss, damage, penalty, fine, cost or any other corporate purposes expense incurred without gross negligence by the Shareholder Representative while acting in good faith and will not voluntarily make these funds available to its creditors in the event exercise of bankruptcyits good faith judgment and arising out of or in connection with the acceptance or administration of its duties or the exercise of its rights hereunder (it being understood that any act done or omitted pursuant to the advice of counsel shall be conclusive evidence of such good faith). The Escrow Participants shall indemnify, defend and hold harmless the Shareholder Representative Group from and against any and all losses, claims, damages, liabilities, fees, costs, expenses (including fees, disbursements and costs of counsel and other skilled professionals and in connection with seeking recovery from insurers), judgments, fines or amounts deposited paid in settlement incurred without gross negligence or willful misconduct on the Expense part of the Shareholder Representative and arising out of or in connection with the acceptance or administration of its duties hereunder, under the Escrow Agreement or under the Shareholder Representative Engagement Agreement. The Escrow Fund shall be available for to indemnify and hold the payment Shareholder Representative harmless against any liability, loss, damage, penalty, fine, cost or expense incurred by the Shareholder Representative without gross negligence or bad faith on the part of all fees the Shareholder Representative and arising out of or in connection with the acceptance or administration of its duties under this Agreement and the Escrow Agreement. The powers, immunities and rights to indemnification granted to the Shareholder Representative Group hereunder: (i) are coupled with an interest and shall be irrevocable and survive the death, incompetence, bankruptcy or liquidation of any Escrow Participant and shall be binding on any successor thereto, and (ii) shall survive the delivery of an assignment by any Escrow Participant of the whole or any fraction of his, her or its interest in the Escrow Fund and Holdback Account.
(d) The Shareholder Representative shall be entitled to deduct and recover from any amounts payable to the Escrow Participants pursuant to this Agreement or the Escrow Agreement any costs and expenses reasonably incurred by the Shareholder Representative in performing its duties under connection with actions taken by the Shareholder Representative pursuant to the terms of this Agreement or the Escrow Agreement (including the hiring of legal counsel and the agreements ancillary hereto; provided that any portion incurring of the Expense Fund not ultimately required for the payment of such legal fees and expenses shall be delivered by costs), after the Representative Reimbursement Amount has been exhausted. The Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of Participants acknowledge that the Shareholder Representative’s responsibilities. All amounts remaining Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the Expense Fund upon termination exercise or performance of the Shareholder Representative’s engagement (and following the completion any of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing its powers, rights, duties or privileges or pursuant to this Agreement, the Escrow Agreement or the transactions contemplated hereby or thereby. Furthermore, the Shareholder Representative shall not be required to take any action unless the Shareholder Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Shareholder Representative against the costs, expenses and liabilities which may be incurred by the Shareholder Representative in performing such actions.
(e) From and after the Effective Time, Parent and the Surviving Corporation shall promptly afford to the Shareholder Representative reasonable access to the books, records (including accountants' work papers) and employees of Parent and the Surviving Corporation to the extent reasonably determined by the Shareholder Representative to be necessary to permit it to investigate or determine any matter relating to (i) its rights or obligations or the rights or obligations of the Escrow Participants under this Agreement, or (ii) the rights or obligations (under any law or otherwise) of the Escrow Participants with respect to any period ending on or before the date of this Agreement. Unless otherwise consented to in writing by the Shareholder Representative, neither Parent nor the Surviving Corporation shall, for a period of four years after the date of this Agreement, destroy, alter or otherwise dispose of any of the books and records of the Surviving Corporation relating in whole or in part to any period prior to the date of this Agreement without first offering to surrender to the Shareholder Representative such books and records or any portion thereof which Parent or the Surviving Corporation may intend to destroy, alter or otherwise dispose of.
(f) Parent may rely and shall be protected in acting, or refraining from acting, upon any written notice, instruction or request furnished to it hereunder or under the Escrow Agreement and reasonably believed by Parent to be genuine and to have been signed or presented by the Shareholder Representative as if such written notice, instruction or request had been furnished to it by all the Escrow Participants.
(g) Parent hereby consents to the retention by the Shareholder Representative of L▇▇▇▇ ▇▇▇▇▇ & N▇▇▇▇▇▇▇▇▇▇▇ LLP ("L▇▇▇▇ ▇▇▇▇▇") as counsel following the Closing, notwithstanding that L▇▇▇▇ ▇▇▇▇▇ has represented the Company in connection with the transactions contemplated by this Agreement, including the exercise negotiation of this Agreement, and waives any right Parent or the Surviving Corporation may have to object to such representation.
(h) The Shareholder Representative shall be entitled to: (i) rely upon the Schedule of Escrow Participants, (ii) rely upon any signature believed by it to be genuine, and (iii) reasonably assume that a signatory has proper authorization to sign on behalf of the right to waive rights applicable Escrow Participant or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)other party.
Appears in 1 contract
Sources: Merger Agreement (Aerocentury Corp)
Shareholder Representative. 4.1. By virtue of In the execution or adoption of this Agreementevent that the Merger is approved by the Shoom Stockholders, each Shareholder irrevocably approves the constitution and appointment ofeffective upon such vote, and hereby irrevocably constitutes and appoints Nwithout further act of any stockholder, W▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall be deemed appointed as agent and attorney-in-fact (the “Shareholder Representative”) with all for each Shoom Stockholder (except such shareholders, if any, as shall have perfected their dissenters’ rights under the rightsCCC), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholdersthe Shoom Stockholders, to give and receive notices and communications, to object to Claims for indemnification, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to any Claims for which indemnification is sought, and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf all actions necessary or appropriate in the judgment of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actionsfor the accomplishment of the foregoing. The Shareholder Representative shall not be liable for any act done or omitted hereunder as Shareholder Representative while acting in good faith. A decision, noticesact, and determinations by consent or instruction of the Shareholder Representative shall conclusively be deemed to have been authorized by, constitute a decision of all the Shoom Stockholders and shall be final, binding upon, any and all Shareholders.
4.2. Without limiting the generality conclusive upon each of the foregoingShoom Stockholders, and the Sysorex Parties may rely upon any such decision, act, consent or instruction of the Shareholder Representative shall have full power and authority to: from and after as being the Closingdecision, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreementact, and consent or instruction of every such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Shoom Stockholder. The Shareholder Representative may resign at any time. Should be removed and replaced by the Shoom Stockholders from time to time upon not less than 30 days prior written notice to Sysorex; provided, however, that the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly may not be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the removed unless holders of a majority of the voting power Consideration Shares agree to such removal and to the identity of the Company on an as converted basis shall designate substituted Shareholder Representative. Any vacancy in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable position of Shareholder Representative as may be filled by approval of the successor holders of a majority in interest of the Consideration Shares. In the event that a vacancy in the position of Shareholder Representative hereunder. If at any time there shall is not be filled by a Shareholder Representative and majority in interest of the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designatedConsideration Shares, then Purchaser Sysorex may petition a court of competent jurisdiction to appoint a Shareholder successor to act as new Shareholder Representative hereundersuch position. The Shareholder Representative’s engagement No bond shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part required of the Shareholder Representative, and the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss shall not receive compensation for his services. Notices or communications to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to from the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative shall constitute notice to or from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf each of the Shareholders or otherwiseShoom Stockholders. The Shareholders acknowledge and agree that Notwithstanding the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 Shareholder representative shall apply, mutatis mutandis, not have the power to settle or compromise any Claim relating to the Company (as if it was inaccuracy of representations or warranties made by a Shoom Stockholder in the Shareholder Representative)Representation Statement delivered by such Shoom Stockholder for which only such individual Shoom Stockholder has indemnification obligations.
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, Agreement each Shareholder irrevocably approves hereby appoints Mark Stellini as the constitution and appointment of, and hereby irrevocably constitutes and appoints N"Shareholder Representative" referred to else▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (Agreement. The Shareholder Representative shall have the “Shareholder Representative”) with all the rightsauthority, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, the Shareholders to take such actions and each exercise such discretion as are required of them, with respect the Shareholder Representative pursuant to any and all matters arising out the terms of or in connection with this Agreement and any related document or instrument (excluding pursuant to Section 10.2and any such actions shall be binding on the Shareholders), including without limitation the Paying Agent Agreement, following:
(a) to execute stock powers and to receive and hold and deliver to the Purchaser or the Escrow Agreement and the agreements ancillary hereto following the Closing and taking Agent (as hereinafter defined) any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or other documents relating thereto on behalf of the Shareholders in accordance herewith shall be given or made by Shareholders;
(b) to give and receive communications and notices, to execute, acknowledge, deliver, record and file all ancillary agreements, certificates and documents which the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deems necessary or appropriate in connection with the Transaction Documents; consummation of the transactions contemplated by the terms and provisions of this Agreement;
(c) to prosecutenegotiate, defend agree to, enter into settlements and settle in compromises of, and demand participation and arbitration and comply with orders and awards of courts and arbitrators with respect to claims for damages and otherwise;
(d) to receive payments due under this Agreement and the Shareholder Representative’s discretion all indemnification disputes Escrow Agreement (including hiring counsel and other litigation assistance and including in court of law or any other legal proceedingas hereinafter defined) and acknowledge receipt for such payments;
(e) to receive all noticeswaive any breach or default under this Agreement, requests and demands that may be made under and pursuant or to waive any condition precedent to Closing;
(f) amend this Agreement, the Paying Agent Escrow Agreement and or any related document or instrument;
(g) to terminate this Agreement, the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled Agreement or any related document or instrument;
(h) to deal exclusively with the Shareholder Representative in respect receive service of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative process in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising claims under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Escrow Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement any related document or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from instrument;
(i) to perform the funds in obligations and exercise the Expense Fundrights under any related document or instrument, (ii) including the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, settlement of claims and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to disputes with Purchaser and the Shareholders; provided, that while this section allows and
(j) to take all actions necessary or appropriate in the judgment of the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that accomplish the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative actions under this Section 4.42.1.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption approval of the First Step Merger and this AgreementAgreement by the Indemnifying Parties, each of the Indemnifying Parties shall be deemed to have agreed to appoint Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Representative Services LLC as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative with full power and authority to act for and on behalf of the Indemnifying Parties to give and receive notices and communications, to direct the Escrow Agent to cause to be sold all Shareholdersof the shares of Parent Common Stock in the Escrow Fund and the Expense Escrow Fund pursuant to Section 8.7(c), to authorize payment to any Indemnified Party or Parties from the Escrow Fund in satisfaction of claims by such Indemnified Party or Parties pursuant to Section 8.2(a), to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each request mediation as provided in this Agreement and comply with orders of them, courts and awards of mediators with respect to such claims, to assert, negotiate, enter into settlements and compromises of, and request mediation and comply with orders of courts and awards of mediators with respect to, any other claim by any Indemnified Party or Parties against any Indemnifying Party or by any such Indemnifying Party against any Indemnified Party or Parties or any dispute between any Indemnified Party or Parties and any such Indemnifying Party, to authorize the sale of all matters arising out of or the shares of Parent Common Stock in connection with this Agreement (excluding the Escrow Fund and deliver an Escrow Sale Instruction Letter to the Escrow Agent pursuant to Section 10.28.7(c)(i), and to execute all such documents necessary or appropriate in the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf sole opinion of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by for the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality accomplishment of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent in each case relating to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and or the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments theretotransactions contemplated hereby, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court judgment of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect for the accomplishment of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken foregoing or (ii) specifically mandated by the Shareholder Representative in connection with such matters. By virtue terms of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should Such agency may be changed by the Indemnifying Parties from time to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly may not be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, removed unless holders of a majority of the Shareholders who have held, outstanding shares of Company Capital Stock as of immediately prior to the ClosingEffective Time agree to such removal and to the identity of the substituted agent. Notwithstanding the foregoing, a vacancy in the position of Shareholder Representative may be filled by the vote of holders of a majority of the voting power outstanding shares of Company Capital Stock as of immediately prior to the Effective Time. No bond shall be required of the Company on an as converted basis shall designate in writing Shareholder Representative. After the Closing, notices or communications to Purchaser within five (5) Business Days a single Person to replace or from the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as shall constitute notice to or from the successor Indemnifying Parties.
(b) The Expense Escrow Amount (collectively, with any interest accrued thereon, the “Expense Escrow Fund”) shall be available to pay directly, or reimburse the Shareholder Representative hereunder. If at any time there shall not be a for, Shareholder Representative Expenses (as defined in Section 8.8(c) below) that are incurred without gross negligence or bad faith on the part of the Shareholder Representative and that arise out of or in connection with the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt acceptance or administration of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities duties hereunder. From time to time prior to the end of the Escrow Period, the Shareholder Representative may deliver a written certificate (a “Shareholder Representative Certificate”), signed by the Shareholder Representative, to the Escrow Agent (A) stating that the Shareholder Representative is entitled to be paid, or to be reimbursed, from amounts then available in the Expense Escrow Fund the aggregate amount of the Shareholder Representative Expenses incurred by the Shareholder Representative that are set forth in the Shareholder Representative Certificate, and (B) certifying that all such Shareholder Representative Expenses set forth in such Shareholder Representative Certificate were reasonably and actually incurred by the Shareholder Representative in connection with the administration of its duties and the fulfillment of its obligations under this Agreement (including Agreement. Each Shareholder Representative Certificate delivered by the Shareholder Representative to the Escrow Agent pursuant to this Section 8.8(b) shall contain a reasonably detailed description of all Shareholder Representative Expenses for which payment or reimbursement is sought by the Shareholder Representative. The Escrow Agent shall not be responsible for making any assessments of any Shareholder Representative Certificate and shall be entitled to rely conclusively upon its contents. Provided the Shareholder Representative Certificate delivered by the Shareholder Representative complies with respect the requirements set out in this Section 8.8(b), the Escrow Agent shall promptly distribute to potential or contingent liabilities as directed by the Shareholder Representative, to the extent such amount is then available in the Expense Escrow Fund, the aggregate amount of the Shareholders hereunder)Shareholder Representative Expenses set forth in such Shareholder Representative Certificate.
4.4. (c) The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder as Shareholder Representative while acting in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, good faith and without gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderwillful misconduct. The Shareholders Indemnifying Parties shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any losslosses, liabilityliabilities, deficiencydamages, damageclaims, costpenalties, claimfines, penaltyforfeitures, fineactions, forfeiturefees, costs or expense expenses (including the fees and expenses of counsel and experts and their staffs and all expense of expenses with respect to document location, duplication and shipment), or actions incurred by the Shareholder Representative and ) arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents Shareholder Representative (collectively, “Shareholder Representative LossesExpenses”), in each case as such Shareholder Representative Loss Expense is suffered or incurred; provided, that in the event that any such Shareholder Representative Loss Expense is finally adjudicated to have been directly caused by the fraud, willful misconductbad faith, gross negligence or bad faith on the part willful misconduct of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders Indemnifying Parties the amount of such indemnified Shareholder Representative Loss Expenses to the extent attributable to such fraud, willful misconductbad faith, gross negligence or bad faithwillful misconduct. If not paid directly to the Shareholder Representative by the ShareholdersIndemnifying Parties, any such Shareholder Representative Losses may Expenses shall be recovered by the Shareholder Representative from (i) funds in the Expense Escrow Fund and (ii) to the extent the funds in the Expense FundEscrow Fund are insufficient, (ii) if then available after satisfaction of all claims of an Indemnified Party or Parties, the funds amounts in the Escrow Amount at such time as such amounts would otherwise be distributable Fund prior to any distribution thereof to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the ShareholdersIndemnifying Parties; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of fundsExpense Escrow Fund and the Escrow Fund, this does not relieve the Shareholders Indemnifying Parties from their obligation to promptly pay such Shareholder Representative Losses Expenses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders Indemnifying Parties or otherwise. The Shareholders Indemnifying Parties acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For A decision, act, consent or instruction of the avoidance Shareholder Representative, including an amendment, extension or waiver of doubt and notwithstanding anything in this Agreement pursuant to Section 9.3 and Section 9.4, shall constitute a decision of the contraryIndemnifying Parties and shall be final, binding and conclusive upon the limitations on liability Indemnifying Parties; and the Escrow Agent and Parent may rely upon any such decision, act, consent or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to instruction of the Shareholder Representative under this Section 4.4.
4.5as being the decision, act, consent or instruction of the Indemnifying Parties. The Purchaser shall not be liable Escrow Agent and Parent are hereby relieved from any liability to any Shareholder person for any act acts done by them in accordance with such decision, act, consent or omitted hereunder by instruction of the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following d) After the completion of the Shareholder Representative’s responsibilities. All amounts , the Shareholder Representative shall instruct the Escrow Agent to distribute any cash remaining in the Expense Escrow Fund upon termination to the Indemnifying Parties in accordance with such Indemnifying Parties’ respective Pro Rata Portions of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by remaining amounts in the Escrow Agent Fund, with the amount delivered to each Indemnifying Party rounded to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company nearest one hundredth (as if it was a Shareholder Representative0.01) (with amounts 0.005 and above rounded up).
Appears in 1 contract
Sources: Merger Agreement (Solarcity Corp)
Shareholder Representative. 4.1. By The holders of the outstanding shares of the capital stock of the Company, by virtue of the execution or adoption and delivery of this Agreement, each Shareholder will be deemed to have irrevocably approves constituted and appointed, effective as of the constitution and appointment ofdate of this Agreement, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ ________ (together with his permitted respective successors, collectively, the “Shareholder Representative”) with all the rights), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, their true and lawful agent, representative agent and attorney-in-fact for and on behalf of all Shareholdersfact, and the Shareholder Representative, by his execution of this Agreement shall be deemed to have accepted such appointment, to enter into any agreement in connection with the transactions contemplated by this Agreement, to exercise all or any of the powers, authority and discretion conferred on him under any such agreement, to act as proxy for each Company Shareholder in connection with any shareholder approvals required in connection with the transactions contemplated by this Agreement, to waive or modify any terms and conditions of themany such agreement, to give and receive notices on their behalf, and to be their exclusive representative with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2)matter, the Paying Agent Agreementsuit, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any claim, action or omitting proceeding arising with respect to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsany transaction contemplated by any such agreement, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreementthe assertion, the Payment Agent Agreementprosecution, share transfer deeds and endorsements and termination instruments and including amendments that defense, settlement or compromise of any claim, action or proceeding for which any Company Shareholder or SOLS may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with indemnification and the Shareholder Representative in respect of any matter arising under the Transaction Documentsagrees to act as, and to undertake the Shareholdersduties and responsibilities of, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such mattersagent and attorney-in-fact. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the This power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being is coupled with an interest, interest and is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4irrevocable. The Shareholder Representative shall not be liable for any action taken or not taken by him in his capacity as Shareholder Representative either (i) with the consent of Shareholders who, as of the date of this Agreement, own a majority in number of the outstanding shares of Company Stock (considered on an as converted basis), or (ii) in the absence of his own willful misconduct. If the Shareholder Representative shall be unable or unwilling to serve in such capacity, his successor shall be named by those persons holding a majority of the shares of Company Common Stock outstanding immediately prior to the Shareholders for Closing Date who shall serve and exercise the powers of Shareholder Representative hereunder. Solely with respect to any act done or omitted hereunder actions taken by the Shareholder Representative in its his capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreementsuch, the Shareholder Representative may rely on the advice shall have no liability to SOLS, or any of counsel and any action its affiliates except for claims based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder fraud by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue (a) Each of the execution Indemnifying Securityholders hereby appoints EK Holdings as its agent and attorney-in-fact, as the Shareholder Representative (the "Shareholder Representative") for and on behalf of the Indemnifying Securityholders to give and receive notices and communications, to authorize payment to Parent from the Escrow Fund in satisfaction of claims by Parent, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such claims, and to take all other actions that are either (i) necessary or adoption appropriate in the judgment of either of the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N. ▇▇▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights▇▇, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf Chief Executive Officer of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the PurchaserEK Holdings, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees only person authorized to ratify and confirm, and hereby ratifies and confirms, take any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2foregoing actions for EK Holdings, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an its capacity as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any Such agency may be changed by the Indemnifying Securityholders, as the case may be, from time there shall to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed unless holders of a two-thirds interest of the Escrow Fund (or, in the event there are no amounts remaining in the Escrow Fund, by any four (4) of the six (6) Principal Shareholders) agree to such removal and to the identity of the substituted agent. Notwithstanding the foregoing, upon the occurrence of any Shareholder Representative and Substitution Event, then, without any further action on the Shareholders fail to designate in writing a successor part of EK Holdings, any Indemnifying Shareholder, the Company, Parent or the Escrow Agent, EK Holdings shall automatically be removed as the Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to hereunder and ▇▇▇▇ ▇▇▇▇▇▇ shall automatically be substituted as the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement EK Holdings shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities give Parent and ▇▇▇▇ ▇▇▇▇▇▇ prompt written notice of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).occurrence
Appears in 1 contract
Shareholder Representative. 4.1. By virtue (a) The Shareholder Parties hereby collectively and irrevocably constitute and appoint the Shareholder Representative as their exclusive agent and attorney-in-fact, with full power and authority, in the name of and for and to act on behalf of all the Shareholder Parties or in the name of the execution or adoption Shareholder Representative (i) to take any and all actions on behalf of the Shareholder Parties with respect to the transactions contemplated by this Agreement, each as the Shareholder irrevocably approves Parties could take if acting individually including settlement, compromise and resolution, with respect to all matters arising under this Agreement for which the constitution Shareholder Representative has been provided with authority, responsibility, management or control in this Agreement, in all such cases as the Shareholder Representative may deem desirable or necessary, (ii) to give and appointment ofreceive all notices, consents, wire transfer payment instructions for the Shareholder Parties, certificates, agreements, waivers, releases, elections, accountings, reports and other communications in connection with the foregoing, (iii) to assert any claim, action, proceeding or investigation against Parent, and (iv) to refrain from enforcing any right of the Shareholder Parties or any of them or the Shareholder Representative arising out of or under or in any manner related to this Agreement or the transactions contemplated hereby. The Shareholder Representative is also authorized (x) to execute and deliver all amendments to this Agreement as the Shareholder Representative deems necessary, advisable or appropriate in connection with any of the foregoing matters and (y) to execute and deliver such other miscellaneous certificates and incidental documents required of any Shareholder Party after the Closing; and all such amendments, agreements certificate and documents shall be fully binding on the Shareholder Parties in all respects and for all purposes.
(b) The foregoing appointment shall be an agency coupled with an interest, and all authority conferred hereby irrevocably constitutes is irrevocable and appoints Nis not subject to termination by any Shareholder Party, or by operation of law, whether by death, incapacity or the occurrence of any other event.
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 hereby accepts his appointment as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and Shareholder Representative on behalf of all Shareholdersthe Shareholder Parties pursuant to this Agreement.
(d) If any death, and each of them, incapacity or other such event with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2)Shareholder should occur, the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action taken, or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsbe taken, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized byas valid as if such death, and shall be binding uponincapacity or other event had not occurred, any and all Shareholders.
4.2. Without limiting the generality regardless of the foregoing, whether or not the Shareholder Representative or Parent shall have full power and authority to: from and after the Closingreceived notice of such death, direct the Paying Agent to disburse amounts paid incapacity or other event.
(e) Any communication, notice, consent, certificate, agreement, waiver, election, accounting, report or any other matter delivered to the Paying Agent Shareholder Representative in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions provisions of this Agreement shall be deemed delivered to all the Shareholder Parties. Every Party to this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments theretoany other interested Person may rely on any communications, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waiversnotices, consents, instructions certificates, agreements, waivers, elections, accountings, reports and authorizations any other matter sent by the Shareholder Representative as if same had been sent by all the Shareholder Parties. The Shareholder Parties hereby waive any and all claims against Parent based upon the actual or alleged lack of authorization of the Shareholder Representative with respect to take all other actions called for under or contemplated any action taken by or that may otherwise be necessary or appropriate Parent in connection with reliance on the Transaction Documents; and to prosecute, defend and settle in authority of the Shareholder Representative’s discretion .
(f) If the Shareholder Representative resigns or shall be unable to serve as the Shareholder Representative, then a successor Shareholder Representative shall be selected by the Shareholder Parties who held at least a majority of all indemnification disputes Company Shares immediately prior to the Closing, and the Shareholder Parties shall deliver written notice of such appointment to Parent.
(including hiring counsel and other litigation assistance and including in court of law or any other legal proceedingg) and To the extent the Shareholder Representative has authority to receive all notices, requests and demands that may be made under and act on such matter pursuant to this Agreement, the Paying Agent Agreement Parent and the Escrow Agreement. From and its Affiliates (including, after the Closing, the Purchaser shall be Surviving Company) are entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documentson all matters relating to this Agreement, and the Shareholders, in their relationship with other Ancillary Agreements and the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matterstransactions contemplated hereby. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any Any action taken or not taken or decisions, communications or writings made, given or executed by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold or on behalf of any Shareholder Party, shall be deemed an action taken or not taken or decisions, communications or writings made, given or executed by such Shareholder Party. Parent and its Affiliates (including, after the Shareholders as a fund for Closing, the fees and expenses of the Surviving Company) shall be entitled to disregard any decisions, communications or writings made, given or executed by any Shareholder Representative incurred in connection with this Agreement and any other agreement or document contemplated hereby and the agreements ancillary hereto (transactions contemplated by this Agreement unless the “Expense Fund”)same is made, given or executed by the Shareholder Representative. All amounts deposited Notwithstanding anything to the Expense Fund contrary set forth herein, from and after the Closing, none of Parent, the Surviving Company or any of their respective Affiliates, shall be treated liable for all purposes as having been paid at Closing any liability to the Shareholders and received and voluntarily set aside any Person, including any Shareholder, for any action taken or not taken by the Shareholders at Closing. The Shareholders will Shareholder Representative or for any act or omission taken or not receive taken in reliance upon the actions taken or not taken or decisions, communications or writings made, given or executed by the Shareholder Representative, including any interest failure of the Shareholder Representative (so long as such failure is not the result of any act or earnings on failure to act of Parent) to distribute (or cause to be distributed) or subdivide (or cause to be subdivided) in the Expense Fund and irrevocably transfer and assign correct amounts any payments made to the Shareholder Representative by Parent or its Subsidiaries (including, after the Closing, the Surviving Company) for distribution to any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate fundsShareholder, will not use these funds for its operating expenses among Shareholders or any other corporate purposes and will not voluntarily make these funds available Person; it being understood that once Parent or its Affiliates (including, after the Closing, the Surviving Company) has made a payment to its creditors be made pursuant to this Agreement or any other Ancillary Agreement, in accordance with the event terms of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by relevant agreement, to the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that for distribution to any portion Shareholder, among Shareholders or to such other Person, such payment shall constitute a complete discharge of the Expense Fund not ultimately required for the relevant payment obligation of Parent or such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallAffiliate.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Transcat Inc)
Shareholder Representative. 4.1. (mm) By virtue approving this Agreement and the Transactions or by executing and delivering a Shareholder Letter of the execution Transmittal or adoption of this Agreementan Optionholder Transmittal Letter, each Shareholder or Optionholder shall have irrevocably approves the constitution authorized and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “appointed Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Representative as the sole, exclusive, true and lawful agent, such Person’s representative and attorney-in-fact for and to act on behalf of all Shareholders, and each of them, such Person with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; Agreement and to negotiate take any and sign all documents in connection with actions and make any decisions required or permitted to be taken by Shareholder Representative pursuant to this Agreement or the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, including the Payment Agent exercise of the power to:
(i) give and receive notices and communications;
(ii) authorize delivery to Parent of cash from the Purchase Price Adjustment Escrow Fund in satisfaction of any amounts owed to Parent pursuant to Section 2.17;
(iii) agree to, negotiate, enter into settlements and compromises of, and comply with orders or otherwise handle any other matters described in Section 2.17;
(iv) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement and any Ancillary Document (including the Escrow Agreement);
(v) make all elections or decisions contemplated by this Agreement and any Ancillary Document (including the Escrow Agreement);
(vi) engage, share transfer deeds employ or appoint any agents or representatives (including attorneys, accountants and endorsements consultants) to assist Shareholder Representative in complying with its duties and termination instruments and including amendments that may require price reductions or holdbacks)obligations; and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to and
(vii) take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in good faith judgment of Shareholder Representative for the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court accomplishment of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreementforegoing. From and after the Closing, the Purchaser Parent shall be entitled to deal exclusively with the Shareholder Representative in respect on all matters relating to this Agreement and shall be entitled to rely conclusively (without further evidence of any matter arising under the Transaction Documentskind whatsoever) on any document executed or purported to be executed on behalf of any Shareholder or Optionholder by Shareholder Representative, and on any other action taken or purported to be taken on behalf of any Shareholder or Optionholder by Shareholder Representative, as being fully binding upon such Person. Notices or communications to or from Shareholder Representative shall constitute notice to or from each of the ShareholdersShareholders and Optionholders. Any decision or action by Shareholder Representative hereunder, in their relationship with including any agreement between Shareholder Representative and Parent relating to the Purchaserdefense, payment or settlement of any claims for indemnification hereunder, shall constitute a decision or action of all Shareholders and Optionholders and shall be bound by all actions taken by final, binding and conclusive upon each such Person. No Shareholder or Optionholder shall have the Shareholder Representative in connection with such mattersright to object to, dissent from, protest or otherwise contest the same. By virtue No Person will have any cause of executing action against Parent, the Surviving Corporation, or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any of their Representatives for any action taken by the Parent in reliance upon any decision, act, consent, waiver or instruction of Shareholder Representative Representative; and Parent is hereby relieved from any liability to any Person for any acts done by it in the exercise accordance with such decision, act, consent, waiver or instruction of Shareholder Representative. The provisions of this Section, including the power of attorney granted hereby, are independent and severable, are irrevocable and coupled with an interest and shall not be terminated by any act of any one or more Shareholders or Optionholders, or by operation of Law, whether by death or other event. Notwithstanding anything to the contrary herein, Shareholder Representative shall have no authority to bind any Shareholder or Optionholder to any payment or obligation that would create any liability beyond the Escrow Fund and the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Expense Amount. The (nn) Shareholder Representative may resign at any time. Should , and may be removed for any reason or no reason by the vote or written consent of a majority in interest of the Shareholders and Optionholders according to each Shareholder’s and Optionholder’s Pro Rata Share (the “Majority Holders”); provided, however, in no event shall Shareholder Representative die, become legally incapacitated resign or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, removed without the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days Majority Holders having first appointed a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement who shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based assume such duties immediately upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to In the Shareholders contributed by the Purchaser on behalf event of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit death, incapacity, resignation or removal of the Shareholder Representative, for a new Shareholder Representative shall be appointed by the Escrow Agent to hold on behalf vote or written consent of the Shareholders as Majority Holders. Notice of such vote or a fund for the fees and expenses copy of the written consent appointing such new Shareholder Representative incurred shall be sent to Parent, such appointment to be effective upon the later of the date indicated in connection with this Agreement such consent or the date such notice is received by Parent; provided, that until such notice is received, Parent, Merger Sub and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund Surviving Corporation shall be treated for all purposes as having been paid at Closing entitled to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings rely on the Expense Fund decisions and irrevocably transfer and assign to actions of the prior Shareholder Representative any ownership right they may otherwise have had as described in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative9.01(a).
Appears in 1 contract
Sources: Merger Agreement (Corelogic, Inc.)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) Each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes appoints and appoints Ndesignates ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, his or her representative and attorney-in-fact for (the "REPRESENTATIVE).
(b) The Shareholders hereby authorize the Representative (i) to take all action necessary in connection with the waiver of any condition to the obligations of any Shareholder to consummate the transactions contemplated hereby; (ii) to give and on behalf of receive all Shareholdersnotices required or permitted under this Agreement, and each of them, with respect (iii) to take any and all matters arising out of or in connection with this Agreement (excluding pursuant additional action as is contemplated to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations be taken by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder terms of this Agreement.
(c) In the event that the Representative dies, becomes unable to perform his responsibilities hereunder or resigns from such position, the Shareholders will select another representative to fill each such vacancy and such substituted representative will be irrevocably appointed and designated the Representative for all such actions, notices, purposes of this Agreement.
(d) All decisions and determinations actions by the Shareholder Representative shall conclusively be deemed to have been authorized byRepresentative, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, any agreement between the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement Representative and the Escrow Agreement. From and after Company relating to the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect waiver of any matter arising under condition to the Transaction Documentsobligations of any Shareholder to consummate the transaction contemplated hereby, and will be binding upon all of the Shareholders, in and no Shareholder will have the right to object, dissent, protest or otherwise contest the same.
(e) By their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue execution of executing or adopting this Agreement, each Shareholder agrees of the Shareholders agree that: The Company will be able to ratify rely conclusively on the instructions and confirmdecisions of the Representative as to any actions required to be taken by the Representative hereunder, and hereby ratifies and confirms, no party hereunder will have any cause of action against the Company for any action taken by the Shareholder Representative Company in reliance upon the exercise instructions or decisions of the power Representative; all actions, decisions and instructions of attorney granted to the Shareholder Representative pursuant to this Section 4.2will be conclusive and binding upon all of the Shareholders, which power and no party hereto will have any cause of attorneyaction against the Representative, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her steadcapacity as a Representative, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done action taken, decision made or omitted hereunder in its capacity as instruction given by the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising Representative under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement except for fraud or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred willful misconduct by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply1.7 are independent and severable, mutatis mutandisare irrevocable and coupled with an interest and will be enforceable notwithstanding any rights or remedies that any Shareholder may have in connection with the transactions contemplated by this Agreement; and the provisions of this Section 1.7 will be binding upon the executors, heirs, legal representatives and successors of each Shareholder, and any references in this Agreement to a Shareholder will mean and include the successors to the Company (as if it was a Shareholder Representative)rights of the Shareholders hereunder, whether pursuant to testamentary disposition, the laws of descent and distribution or otherwise.
Appears in 1 contract
Sources: Merger Agreement (Nicollet Process Engineering Inc)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and 7.1 The Shareholders hereby irrevocably constitutes and appoints Ndesignate ▇▇▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, their authorized representative and attorney-in-fact for to undertake and perform in their name and on their behalf the duties and responsibilities of all Shareholdersthe Shareholder Representative set forth in this Agreement. The Shareholder Representative accepts and agrees to discharge diligently the duties and responsibilities of the Shareholder Representative set forth in this Agreement. SM&A and the Escrow Agent shall be entitled to rely upon the authorization and designation of the Shareholder Representative under this Section 7. ---------
7.2 The Shareholder Representative is authorized to take any action he deems appropriate or necessary to carry out the provisions of, and each to determine the rights of themthe Shareholders under, this Agreement, including without limitation, taking any action required or permitted under this Agreement to protect or enforce the Shareholders' rights to the Escrow Funds. The Shareholder Representative's authority includes but is not limited to:
(a) receiving all notices or other documents given or to be given pursuant to this Agreement or in connection with respect the transactions contemplated hereby;
(b) engaging special counsel, accountants, investment banks or other advisors;
(c) prosecuting and settling any dispute in connection with this Agreement, including without limitation the resolution of any disputes related to any and disbursements of the Escrow Funds; and
(d) paying all matters arising out expenses of or the Shareholders incurred in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following transactions contemplated hereby.
7.3 In the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf event of the Shareholders in accordance herewith shall be given death, resignation, discharge or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality incapacity of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser ▇▇▇▇ ▇▇▇▇▇ shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative treated as the successor Shareholder Representative hereunder. If at any time there shall not be a Representative.
7.4 The Shareholder Representative and shall keep the Shareholders fail to designate in writing reasonably informed of his decisions of a successor material nature.
7.5 The Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s diligently discharge his duties and responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4Agreement. The Shareholder Representative shall not be liable to the Shareholders any Shareholder for any act done action taken or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out in good faith, or for any mistake of fact or in connection with the acceptancelaw, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly unless caused by the fraud, willful misconduct, his own gross negligence or bad faith on the part of the Shareholder Representative, the willful misconduct.
7.6 The Shareholder Representative will reimburse shall be entitled to treat as genuine any letter or other document furnished to him by SM&A or the Shareholders Escrow Agent and reasonably believed by him to be genuine and have been signed and presented by the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence proper party or bad faith. If not paid directly to the parties.
7.7 The Shareholder Representative by the Shareholders, shall not be entitled to any such Representative Losses may compensation for services hereunder.
7.8 SM&A shall be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time entitled to treat as such amounts would otherwise be distributable to the Shareholders, and (iii) genuine any letter or other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available document furnished to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of by the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt Escrow Agent and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended reasonably believed by it to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder genuine and have been signed and presented by the Shareholder Representativeproper party or parties.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Escrow Agreement (Sm&a Corp)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”a) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions For purposes of this Agreement and the Escrow Agreement; to negotiate , the Company hereby appoints, and sign all documents in connection with the Transaction each Company Shareholder and amendments thereto, whether before or after Closing (includingOptionholder shall, without limitationany further action on the part of any such Company Shareholder or Optionholder, Escrow be deemed (by virtue of the adoption and approval of this Agreement and approval of the Merger and/or acceptance of any consideration pursuant to this Agreement) to have consented to the appointment of Shareholder Representative Services LLC as the attorney‑in‑fact and agent for and on behalf of each such Company Shareholder and Optionholder, and the Payment Agent Agreement, share transfer deeds taking by the Shareholder Representative of any and endorsements all actions and termination instruments and including amendments that may require price reductions the making of any decisions required or holdbacks); and permitted to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for be taken by the Shareholder Representative under or contemplated by or that may otherwise be necessary or appropriate in connection with this Agreement and the Transaction Documents; and other documents contemplated hereby, including the exercise of the power to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceedingi) and to receive all notices, requests and demands that may be made under and pursuant to execute this Agreement, the Paying Agent Escrow Agreement and other agreements, documents and certificates pursuant to such agreements, including all amendments to such agreements, and take all actions required or permitted to be taken under such agreements, (ii) authorize delivery to Parent of all or any portion of the Escrow Fund from the Escrow Account, in satisfaction of indemnification or other claims contemplated by this Agreement or as provided in the Escrow Agreement, (iii) agree to, negotiate, enter into settlements and compromises of and comply with orders of courts and awards of arbitrators with respect to such indemnification or other claims, (iv) resolve any indemnification or other claims, (v) receive and forward notices and communications pursuant to this Agreement and the Escrow Agreement. From , and after (vi) take all actions necessary in the Closing, the Purchaser shall be entitled to deal exclusively with judgment of the Shareholder Representative in respect for the accomplishment of the foregoing and all of the other terms, conditions and limitations of this Agreement, the Escrow Agreement and any matter arising under the Transaction Documentsother agreements, documents and the Shareholders, in their relationship with the Purchaser, shall be bound by certificates thereto. Any and all such actions taken by the Shareholder Representative in connection on behalf of the Company Shareholders and Optionholders (or former Company Shareholders and Optionholders) shall be deemed to be facts ascertainable outside this Agreement and shall be binding on all of the Company Shareholders and Optionholders. The Company Shareholders and Optionholders shall cooperate with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to and any accountants, attorneys or other agents whom the Shareholder Representative pursuant may retain to assist in carrying out Shareholder Representative’s duties hereunder. Shareholder Representative Services LLC hereby accepts its appointment as the Shareholder Representative. The Shareholder Representative is authorized by each Company Shareholder and Optionholder by virtue of the adoption and approval of this Section 4.2, which power Agreement and approval of attorney, being coupled with an interest, is irrevocable the Merger to act on its behalf as required hereunder and shall survive under the death, incapacity or incompetence of each such Shareholder.
4.3Escrow Agreement. The Shareholder Representative may resign at any time. Should , with thirty (30) days prior written notice to Parent and the Escrow Agent, upon the terms set forth in the engagement agreement between the Company and the Shareholder Representative dieRepresentative. At any time during the term of the Escrow Agreement, become legally incapacitated Company Shareholders holding (or bankruptafter the Effective Time, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the former Company Shareholders who have held, held immediately prior to the Closing, the Effective Time) a majority of the voting power of votes entitled to be cast by the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace Junior Common Shares at the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to Shareholders’ Meeting can appoint a Shareholder to act as new Shareholder Representative hereunder(after reasonably consulting with Parent regarding the proposed new Shareholder Representative) by sending notice and a copy of the duly executed written consent appointing such new Shareholder Representative to Parent and the Escrow Agent. Such appointment will be effective upon the later of the date indicated in the consent or the date such consent is received by Parent and the Escrow Agent. The Shareholder Representative’s engagement shall terminate following the completion of all parties acknowledge that the Shareholder Representative’s responsibilities obligations under this Agreement (including with respect to potential or contingent liabilities Article VIII are solely as a representative of the Company Shareholders hereunder)and Optionholders under this Article VIII.
4.4(b) All decisions, actions, consents and instructions of the Shareholder Representative shall be final and binding upon all the Company Shareholders and Optionholders and no Company Shareholder or Optionholder shall have any right to object, dissent, protest or otherwise contest the same, except for fraud, bad faith or willful misconduct. Parent shall be able to rely conclusively on the instructions and decisions of the Shareholder Representative and shall be required to only file and negotiate any claims or disputes with the Shareholder Representative and not with each Company Shareholder and Optionholder. The Shareholder Representative shall not have by reason of this Agreement a fiduciary relationship in respect of any Company Shareholder or Optionholder, except in respect of amounts actually received on behalf of such Company Shareholder or Optionholder. The Shareholder Representative shall not be liable required to make any inquiry concerning either the Shareholders for performance or observance of any of the terms, provisions or conditions of this Agreement. The Shareholder Representative shall not have any liability to any Company Shareholder or Optionholder in connection with the Shareholder Representative’s services pursuant to this Agreement while acting in good faith, and any act done or omitted hereunder in its capacity as the Shareholder Representative, except pursuant to the extent caused advice of legal counsel, public accountants or other independent experts reasonably relied upon in good faith by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice shall be conclusive evidence of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereundergood faith. The Company Shareholders and Optionholders shall severally and not jointly (based on each such Company Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder RepresentativeOptionholder’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%Pro Rata Portion) indemnify and defend the Shareholder Representative and hold the Shareholder Representative it harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, action, fee cost or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment)) (collectively, or actions incurred by the “Shareholder Representative and Expenses”) arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s its duties hereunder and under the Transaction Documents (collectively, “Representative Losses”)hereunder, in each case as such Shareholder Representative Loss Expense is suffered or incurred; provided, that in the event that any such Shareholder Representative Loss Expense is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Company Shareholders and Optionholders the amount of such indemnified Shareholder Representative Loss Expense to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the ShareholdersCompany Shareholders and Optionholders, any such Shareholder Representative Losses Expenses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, Shareholder Representative Fund and (ii) the funds amounts in the Escrow Amount Fund at such time as such remaining amounts would otherwise be distributable to the ShareholdersCompany Shareholders and Optionholders; provided, and (iii) that in no event may any other funds Shareholder Representative Expenses be recovered by the Shareholder Representative from any portion of the Escrow Fund that become payable has not been disbursed by the Escrow Agent for distribution to the Company Shareholders under this Agreement at such time as such amounts would otherwise be distributable to and Optionholders in accordance with the ShareholdersEscrow Agreement; provided, further, that while this section allows the Shareholder Representative to be paid from Shareholder Representative Fund and the aforementioned sources of fundsEscrow Fund, this does not relieve the Company Shareholders and Optionholders from their obligation to promptly pay such Shareholder Representative Losses Expenses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Company Shareholders and Optionholders or otherwise. The Company Shareholders and Optionholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For .
(c) The Shareholder Representative hereby represents and warrants to Parent that (i) it is a limited liability company validly existing and in good standing under the avoidance Laws of doubt the State of Colorado, (ii) it has all requisite limited liability company power and notwithstanding anything in authority to execute and deliver this Agreement and the Escrow Agreement and to perform its obligations hereunder and thereunder, (iii) the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in execution and delivery of this Agreement by it has been, and the execution and delivery of the Escrow Agreement by it at Closing will be, duly authorized by all necessary limited liability company action, (including in Section 10.8iv) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by Agreement has been (and upon the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to ’s execution thereof the Shareholders contributed Escrow Agreement will be) duly executed and delivered by it, and assuming the due authorization, execution and delivery hereof by the Purchaser on behalf of other parties hereto or thereto, constitutes (or will constitute once executed) the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit legal, valid and binding obligations of the Shareholder Representative, for enforceable against it in accordance with their terms, except as enforcement hereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws relating to or affecting the Escrow Agent to hold on behalf enforcement of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise creditors’ rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 abovegenerally, the provisions laws of this Section 4 shall applyagency, mutatis mutandis, to and legal principles of general applicability governing the Company availability of equitable remedies (as if it was whether considered in a Shareholder Representativeproceeding in equity or at law or under applicable legal codes).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption and delivery of this Agreement, each Shareholder irrevocably approves of the constitution and appointment of, and Selling Shareholders hereby irrevocably constitutes and appoints NR. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (and by his execution of this Agreement, R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ hereby accepts his appointment) as the true and lawful agent and attorney-in-fact (the “Shareholder Representative”) of the Selling Shareholders to act in the name, place and stead of the Selling Shareholders in connection with all the rights, powers and obligations transactions contemplated by this Section 4Agreement (other than any retention agreements between Buyer and any Selling Shareholder), and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or act on behalf of the Selling Shareholders in accordance herewith shall be given any litigation or made by arbitration involving this Agreement or any other Transaction Document (other than any employment agreements between the Shareholder Representative Surviving Corporation and any Selling Shareholder), to do or refrain from doing all such actions, noticesfurther acts and things, and determinations by to execute all such documents as the Shareholder Representative shall conclusively be deemed to have been authorized bydeem necessary or appropriate, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the transactions contemplated by this Agreement or any other Transaction Document (other than any employment agreements between the Surviving Corporation and amendments theretoany Selling Shareholder), whether before or after Closing (including, without limitation, Escrow the power:
(a) to act for the Selling Shareholders with regard to matters pertaining to the Post-Closing Adjustment Statement and the Post-Closing Adjustment;
(b) to act for the Selling Shareholders with regard to matters pertaining to indemnification referred to in this Agreement, including the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); power to compromise any indemnity claim on behalf of the Selling Shareholders and to granttransact matters of litigation;
(c) to execute and deliver all amendments, provide, negotiate and sign all waivers, consentsancillary agreements, instructions stock powers, certificates and authorizations and to take all other actions called for under or contemplated by or documents that may otherwise be the Shareholder Representative deems necessary or appropriate in connection with the Transaction Documents; consummation of the transactions contemplated by this Agreement;
(d) to execute and deliver all amendments and waivers to prosecute, defend and settle in this Agreement that the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law Representative deems necessary or any other legal proceeding) and to receive all noticesappropriate, requests and demands that may be made under and pursuant to this Agreementwhether prior to, the Paying Agent Agreement and the Escrow Agreement. From and at or after the Closing;
(e) to receive funds for the payment of expenses of the Selling Shareholders and apply such funds in payment for such expenses;
(f) to do or refrain from doing any further act or deed on behalf of the Selling Shareholders that the Shareholder Representative deems necessary or appropriate in her sole discretion relating to the subject matter of this Agreement as fully and completely as the Selling Shareholders could do if personally present; and
(g) to receive notices and service of process in connection with any claims under this Agreement.
(h) Buyer, Merger Sub, the Purchaser shall be entitled to deal exclusively with Surviving Corporation and any other Person may conclusively and absolutely rely, without inquiry, upon any action of the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by matters referred to herein. The Selling Shareholders hereby confirm all that the Shareholder Representative in connection with such matters. By shall do or cause to be done by virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by her appointment as the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4Selling Shareholders. The Shareholder Representative shall not be liable to act for the Selling Shareholders for any act done or omitted hereunder on all of the matters set forth in its capacity as this Agreement in the manner the Shareholder Representative, except Representative believes to be in the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect best interest of any matter arising the Selling Shareholders and consistent with the obligations under this Agreement, but the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared be responsible to the pro rata shares Selling Shareholders for any loss or damages the Selling Shareholders may suffer by the performance of all Shareholders signing her duties under this Agreement Agreement, other than loss or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate damage arising from willful violation of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement law or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that gross negligence in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part performance of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from her duties under this Agreement.
(i) Upon the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contraryClosing, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser Company shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto wire $500,000 (the “Expense Fund”) to an account designated by the Shareholder Representative, which will be used for the purposes of paying directly, or reimbursing the Shareholder Representative for, any third party expenses pursuant to this Agreement and the other Transaction Documents or for satisfying certain Claims pursuant to Section 8.4(f). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Selling Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right that they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate unrelated funds, will not use these funds for its operating expenses or any other corporate unrelated purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall As soon as practicable following the completion of the Shareholder Representative’s responsibilities. All amounts , the Shareholder Representative will deliver any remaining in balance of the Expense Fund upon termination to the Selling Shareholders. For tax purposes, the Expense Fund will be treated as having been received and voluntarily set aside by the Selling Shareholders at the time of Closing.
(j) The initial Shareholder Representative shall appoint his or her successor Shareholder Representative, or if the initial Shareholder Representative dies or becomes disabled (such that he or she cannot perform his or her duties as Shareholder Representative or to appoint a successor Shareholder Representative) or is otherwise unable or unwilling to appoint a successor then the successor Shareholder Representative shall be Cohiba Retained Assets, LLC. If any successor Shareholder Representative dies or becomes disabled (such that he or she could - 68 - not perform his or her duties as Shareholder Representative or to appoint a successor Shareholder Representative) or is otherwise unable or unwilling to appoint a successor then the successor Shareholder Representative shall be elected by a vote of a majority of the Shareholder Representative’s engagement (and following the completion shares of the Shareholder Representative’s responsibilities) shall also be delivered Capital Stock then held by the Escrow Agent to Selling Shareholders (or by the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf estate of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representativedeceased Selling Shareholder).
Appears in 1 contract
Shareholder Representative. 4.1(a) The Shareholders herein have and do hereby irrevocably make, constitute and appoint the individuals designated as their agent (the "Shareholder's Representative") and authorize and empower him or her to fulfill the role of Shareholder's Representative hereunder. By virtue In the event of the resignation of the Shareholder's Representative, the resigning Shareholder's Representative shall appoint a successor from among the Shareholders and who shall agree in writing to accept such appointment. If the Shareholder's Representative should die or become incapacitated, his or her successor shall be appointed within 15 days of his or her death or incapacity by a majority of the Shareholders, and such successor shall be an Shareholder. The choice of a successor Shareholder's Representative appointed in any manner permitted above shall be final and binding upon all of the Shareholders. (The decisions and actions of any successor Shareholder's Representative shall be, for all purposes, those of a Shareholder's Representative as if originally named in the Transfer Agreement.)
(b) Each Shareholder has made, constituted and appointed and by the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and Agreement hereby irrevocably makes, constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Shareholder's Representative as the sole, exclusive, such person's true and lawful attorney in fact and agent, representative for such person and attorney-in-fact in such person's name, place and stead for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of purposes necessary or desirable in connection with this Agreement (excluding pursuant to Section 10.2), order for the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting Shareholder's Representative to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or actions contemplated by the Paying Agent Agreement. All actions, notices, communications and determinations by or Transaction Documents on behalf of the Shareholders, with the ability to execute and deliver all instruments, certificates and other documents of every kind incident to the foregoing to all intents and purposes and with the same effect as such Shareholder could do personally, and each such Shareholder hereby ratifies and confirms as his, her, or its own act, all that the Shareholder's Representative shall do or cause to be done pursuant to the provisions hereof. All notices and communications directed to Shareholders in accordance herewith under this Agreement shall be given to the Shareholder's Representative.
(c) The death or made by incapacity of any Shareholder shall not terminate the Shareholder authority and agency of the Shareholder's Representative.
(d) The Shareholders hereby agree to indemnify the Shareholder's Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, hold him or her harmless against any and all Shareholders.
4.2. Without limiting loss, liability or expense incurred without bad faith on the generality part of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder 's Representative and arising out of or in connection with the acceptance, performance his or administration of the Shareholder Representative’s her duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Shareholder's Representative, including the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees reasonable costs and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Shareholder's Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that defending against any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining claim or liability in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallconnection herewith.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue the execution and delivery of this Agreement or any letter of transmittal, including counterparts thereof, each of the execution or adoption Shareholders of this Agreement, each the Company Group will irrevocably constitute and appoint the Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Representative as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for of such Shareholder with full powers of substitution to act in the name, place and stead of such Shareholder with respect to the performance on behalf of such Shareholder under the terms and provisions hereof and to do or refrain from doing all Shareholderssuch further acts and things, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and execute all such actionsdocuments, notices, and determinations by as the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deem necessary or appropriate in connection with any transaction contemplated hereunder, including the power to: (i) act for such Shareholder with respect to the Indemnification Escrow Amount; (ii) amend, modify or waive any provision of the Transaction DocumentsDocuments in any manner; (iii) employ, obtain and to prosecuterely upon the advice of legal counsel, defend accountants and settle in other professional advisors as the Shareholder Representative’s , in the sole discretion thereof, deems necessary or advisable in the performance of the duties of the Shareholder Representative; (iv) act for such Shareholder with respect to all indemnification disputes Purchase Price matters referred to herein; (including hiring counsel v) incur any expenses, liquidate and other litigation assistance withhold assets received on behalf of such Shareholder prior to their distribution to such Shareholder to the extent of any amount that the Shareholder Representative deems necessary for payment of or as a reserve against expenses, and including pay such expenses or deposit the same in court an interest-bearing bank account established for such purpose, with all such expenses reimbursed to the Shareholder Representative out of law amounts received out of the Indemnification Escrow Amount, or any other legal proceedingif no amounts are received, by reimbursement from the Shareholders in accordance with their pro rata percentage ownership; (vi) and to receive all notices, requests communications and demands deliveries hereunder on behalf of such Shareholder; (vii) do or refrain from doing any further act or deed on behalf of such Shareholder that the Shareholder Representative deems necessary or appropriate, in the sole discretion of the Shareholder Representative, relating to the subject matter hereof as fully and completely as such Shareholder could do if personally present and acting and as though any reference to such Shareholder herein was a reference to the Shareholder Representative; or (viii) direct, authorize or permit any third party paying agent, if applicable, to take any of the foregoing actions; provided, however, that the Shareholder Representative shall have no obligation to act, except as expressly provided herein.
(b) The appointment of the Shareholder 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 action of the Shareholder Representative as the act of each Shareholder in all matters referred to herein.
(c) In the event the Shareholder Representative resigns or ceases to function in such capacity for any reason whatsoever, then the successor Shareholder Representative shall be made the Person appointed by the Shareholders holding a majority of the pro rata percentages held by all Shareholders.
(d) The Reserve Amount shall be used by the Shareholder Representative to satisfy the obligations of the Shareholder Representative set forth herein and to otherwise permit the Shareholder Representative to perform its obligations set forth herein. As soon as practicable after the date on which the final obligation of the Shareholder Representative under and pursuant to this AgreementAgreement has been discharged, the Paying Shareholder Representative shall pay the Escrow Agent Agreement and any amounts remaining in the Reserve Amount to be paid by Escrow Agent in accordance with the Escrow Agreement. From and after the Closing.
(e) In furtherance of its role, the Purchaser Shareholder Representative shall be entitled to deal exclusively with incur such reasonable costs and expenses as the Shareholder Representative in respect of any matter arising may deem appropriate under the circumstances, which expenses may include hiring attorneys, accountants, appraisers and other professional advisors. Such expenses shall be reimbursed from the Reserve Amount from time to time upon demand by the Shareholder Representative.
(f) Nothing in the Transaction DocumentsDocuments is intended, and nothing in the Transaction Documents shall be interpreted as, imposing upon the Shareholder Representative, solely in its capacity as the agent and attorney-in fact for the Shareholders, any personal liability, personal economic obligation or personal guarantee in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue favor of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant party to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity Agreement or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4third party. The Shareholder Representative shall not be liable have no liability to the Shareholders for any act done with respect to actions taken or omitted hereunder to be taken in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared hereby agree to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided thatdefend, for the avoidance of doubtindemnify, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless from and against any loss, and all liability, deficiencydamages, damagecosts, costand expenses, claim, penalty, fine, forfeiture, or expense (including the attorneys’ fees and expenses of counsel and experts and their staffs and all expense of document locationcourt costs, duplication and shipment), or actions incurred by that the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than incur as a result of its gross negligence this Agreement or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event course of bankruptcy. The amounts deposited in the Expense Fund shall be available performance of its services hereunder, other than for the payment of all fees and expenses reasonably incurred by such liability as the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion may incur because of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement his (and following the completion of the Shareholder Representative’s responsibilitiesor his representatives) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreementgross negligence, including the exercise of the right to waive rights fraud or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).intentional misconduct
Appears in 1 contract
Sources: Stock Purchase Agreement (Security National Financial Corp)
Shareholder Representative. 4.1. By virtue (a) The Representative is hereby authorized to serve as the exclusive representative of each of the Shareholders with respect to the matters set forth in this Agreement to be performed by the Shareholders.
(b) Each Shareholder, by execution or adoption of this Agreement, each Shareholder hereby irrevocably approves appoints the constitution and appointment ofRepresentative as the exclusive agent, proxy, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-attorney in fact for such Shareholder for all purposes of this Agreement and on behalf of all Shareholdersthe contemplated transactions (i) to consummate the contemplated transactions herein and therein, (ii) to collect and each of them, with respect to any and all matters arising out of or pay such Shareholder’s expenses incurred in connection with the negotiation and performance of this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and contemplated transactions (whether incurred prior to, on or after the agreements ancillary hereto following date hereof or the Closing Date), (iii) to deduct and/or hold back any funds that may be payable to any Shareholders pursuant to the terms of this Agreement in order to pay any amount that may be payable by any Shareholders hereunder or thereunder, (iv) to resolve or settle any claim made by a Buyer Indemnitee, and, if necessary, amend this Agreement in order to give effect to any such resolution or settlement, (v) to endorse and taking deliver any action certificates or omitting instruments and execute such further instruments of assignment as Buyer shall reasonably request, (vi) to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations other actions to be taken by or on behalf of such Shareholder in connection herewith, (vii) to retain funds for reasonably anticipated expenses and Liabilities, and (viii) to do each and every act and exercise any and all rights that the Shareholders in accordance herewith collectively are permitted or required to do or exercise under this Agreement. This appointment and power of attorney shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, be coupled with an interest and all authority conferred hereby shall be irrevocable and shall not be binding uponsubject to termination by operation of Law, whether by the incompetence or incapacity or bankruptcy of any and all Shareholders.
4.2. Without limiting Shareholder or the generality occurrence of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement any other event or events and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that Shareholders may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to not terminate this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted with respect to any of the Shareholders or any of the Shareholders’ respective successors, assigns, beneficiaries, or heirs without the prior written consent of Buyer.
(c) Neither the Representative nor any agent employed by the Representative shall incur any liability to any Shareholders by virtue of the failure or refusal of the Representative relating to the Shareholder performance of its duties hereunder while acting in good faith or any of its omissions or actions with respect thereto; it being understood that such exculpation applies only to actions or omissions in the Representative’s capacity as the Representative pursuant to this Section 4.212.19 and that such exculpation shall not apply to, which power of attorneyor limit the liability of, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve Representative’s principal in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on capacity as an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable indirect Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement Representative shall terminate following be entitled to rely on the completion advice of all counsel, public accountants or other independent experts experienced in the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential matter at issue, and any error in judgment or contingent liabilities other act or omission of the Shareholders hereunder).
4.4Representative pursuant to such advice shall in no event subject the Representative to liability to any Shareholder. The Shareholder Representative shall not be liable to the Shareholders for Shareholders, and any act done taken or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on be taken pursuant to the advice of counsel and any action based upon shall be conclusive evidence of such reliance shall relieve the Shareholder Representative of any liability hereundergood faith. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) will indemnify and defend hold harmless the Shareholder Representative from and hold the Shareholder Representative harmless against any lossand all Losses, liabilityLiabilities, deficiencydamages, damageclaims, costpenalties, claimfines, penaltyforfeitures, fineactions, forfeiturefees, or expense costs and expenses (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred shipment and all amounts paid by the Shareholder Representative and to Buyer on behalf of the Company) (collectively, “Representative Losses”) arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder execution and under performance of this Agreement and the Transaction Documents (collectively, “Ancillary Agreements to which the Representative Losses”)is a party, in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part willful misconduct of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwisewillful misconduct. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For Agreement (and, for the avoidance of doubt and notwithstanding anything in this Agreement to the contrarydoubt, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders restrictions and survival periods set forth elsewhere in this Agreement (including in Section 10.8) Article 9 are not intended to be applicable to the indemnities provided contained in this Section 12.19(c)).
(d) Each Shareholder hereby agrees that: (i) Buyer shall be entitled to deal exclusively with the Shareholder Representative on all matters relating to this Agreement and to rely exclusively on any and all communications given or other actions taken by the Representative under this Section 4.4Agreement without any obligation to inquire of any Shareholder; (ii) notice to the Representative shall be deemed to be notice to the Shareholders (as applicable) for purposes of this Agreement and payment to the Representative shall be deemed to be payment to the Shareholders for purposes of this Agreement, and once Buyer has made payment to the Representative, Buyer shall have no further obligation with respect to such payment and the Shareholders shall look solely to the Representative for such payment; (iii) the power and authority of the Representative, as described in this Agreement, shall continue in force until all rights and obligations of the Shareholders under this Agreement shall have terminated, expired or been fully performed; and (iv) each Shareholder shall be liable for the actions or omissions of the Representative in its capacity as Representative.
4.5. (e) The Purchaser Representative shall not be liable entitled to any Shareholder fee, commission or other compensation for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total performance of US$100,000 its services hereunder, but shall be withheld from amounts otherwise payable at Closing entitled to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and of its reasonable expenses reasonably incurred as the Representative which shall be borne by the Shareholder Representative in performing its duties under this Agreement and Shareholders pro rata according to each Shareholder’s Pro Rata Share. Upon the agreements ancillary hereto; provided that any portion death, termination or resignation of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to Representative (or any successor), the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining shall appoint a successor agreed to by a majority in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf interest of the Shareholders prior determined in accordance with their respective Pro Rata Share. The Shareholders shall promptly notify Buyer in writing of any such appointment of a successor. The Representative may also be replaced by a successor appointed by the Shareholders as agreed to Closing pursuant to this Agreement, including the exercise by a majority in interest of the right Shareholders determined in accordance with their respective Pro Rata Share upon not less than 10 days’ prior written notice to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)Buyer.
Appears in 1 contract
Sources: Stock Purchase Agreement (Barfresh Food Group Inc.)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) Each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints NS▇▇▇ ▇▇▇▇▇▇▇ as its agent and true and lawful attorney-in-fact (the “Shareholder Representative”) ), with all full power and authority in the rights, powers name of and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholderssuch Shareholder, to serve as the Shareholder Representative under this Agreement and the other Transaction Documents, and each of themto exercise the power and authority to act on behalf of, and in the name of, such Shareholder with respect to any and all matters arising out of or in connection with relating to this Agreement or such other agreements, and the transactions contemplated hereunder or thereunder (excluding pursuant to Section 10.2), including the Paying Agent Agreement, execution and delivery of the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2). Without limiting the generality of the foregoing, the Shareholder Representative shall have full is hereby granted the power and authority to: from by each Shareholder to negotiate and after the Closing, direct the Paying Agent enter into amendments to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; other agreements contemplated hereby for himself and on behalf of the Shareholder, to negotiate and sign all documents act on each Shareholder’s behalf in connection with the Transaction and amendments theretoany dispute, whether before litigation or after Closing (including, without limitation, Escrow arbitration involving this Agreement, the Payment Agent Agreementother Transaction Documents or such other agreements or any document delivered to the Shareholder Representative in such capacity pursuant hereto or thereto, share transfer deeds to entering into any documents required or permitted and endorsements contesting and termination instruments settling any and including amendments that may require price reductions all claims for indemnification under Article 10, to authorize the release of the Shareholder Representative Fund Amount or holdbacks); otherwise control the Shareholder Representative Fund Amount and to grantdo or refrain from doing all such further acts and things, provideand execute all such documents, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be as the Shareholder Representative shall deem necessary or appropriate in connection with the Transaction Documents; and to prosecutetransactions contemplated hereby.
(b) All decisions, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law acts, consents or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken instructions by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and hereunder shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days constitute a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities decision of the Shareholders hereunder).
4.4and shall be final, binding and conclusive upon the Shareholders, and no Shareholder shall have the right to object, dissent, protest or otherwise contest the same. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as connection with the Shareholder Representativeacceptance, performance, or administration of his duties hereunder, except with respect to the extent caused by its willful misconduct, gross negligence his own actual fraud or bad faith. In all questions arising in respect of , and for this purpose any matter arising under this Agreement, the Shareholder Representative may rely on act done or omitted pursuant to the advice of counsel shall be conclusive evidence of the absence of fraud and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderbad faith. The Shareholders shall jointly and severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative him harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and him (other than as a direct result of his own actual fraud or bad faith) on his part arising out of or in connection with the acceptance, performance performance, or administration of his duties hereunder. The Buyer Indemnified Parties may rely, without further inquiry, upon the authority of the Shareholder Representative’s duties Representative hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that upon any such decision, act, consent or instruction of the Shareholder Representative Loss is finally adjudicated as being the decision, act, consent or instruction of the Shareholders for any and all purposes under this Agreement.
(c) At the Closing, the Buyer will deliver the Shareholder Representative Fund Amount to have been directly caused a bank account designated by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative which will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered controlled by the Shareholder Representative from (i) and used solely to pay the funds in the Expense Fundcosts and expenses, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholdersif any, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that defending or resolving any portion of the Expense Fund not ultimately required claims for the payment of such fees and expenses shall be delivered indemnification by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of Buyer Indemnified Parties, and any other costs or expenses incurred by the Shareholder Representative’s responsibilities. All amounts remaining Representative in the Expense Fund upon termination performance of his obligations as the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallRepresentative hereunder.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Stock Purchase Agreement (Stewart Information Services Corp)
Shareholder Representative. 4.1. By virtue (a) Subject to the terms and conditions of this Section 11.20, the Company hereby designates PaxVax SH Representative LLC as the Shareholder Representative to serve, and Parent and Merger Sub hereby acknowledge that the Shareholder Representative shall serve, as the sole representative of the execution Shareholder, from and after the date hereof with respect to the matters set forth in this Agreement and the Ancillary Agreements, such service to be without compensation except for the reimbursement of out-of-pocket expenses specifically provided herein. The Shareholder Representative has accepted such designation as of the date hereof. Notwithstanding anything to the contrary contained in this Agreement or adoption of this the Escrow Agreement, each the Shareholder irrevocably approves the constitution and appointment ofRepresentative shall have no duties or responsibilities except those expressly set forth herein, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (no implied covenants, functions, responsibilities, duties or Liabilities on behalf of the “Shareholder shall otherwise exist against the Shareholder Representative”.
(b) with all the rights, powers and obligations contemplated by this Section 4, and any successor The Shareholder Representative(s) designated under this Section 4 Representative has been irrevocably appointed as the sole, exclusive, true and lawful agent, representative proxy and attorney-in-fact for the Shareholder for all purposes of this Agreement, has the full power and authority to act on behalf the Shareholder’s behalf, including: (i) to take all actions or refrain from taking any actions which the Shareholder Representative considers necessary or desirable in connection with the defense, pursuit or settlement of all Shareholdersany determinations relating to the payment of the Escrow Amount, and each of them, with respect to any and all matters arising out of or claims in connection with this Agreement (excluding [***] or any Ancillary Agreement, including to ▇▇▇, defend, negotiate, settle and compromise any such claims made by or against, and other disputes with, Parent and Merger Sub pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow this Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf any of the Shareholders in accordance herewith shall be given Ancillary Agreements or made by transactions contemplated hereby or thereby, (ii) execute and deliver all amendments, waivers, Ancillary Agreements, certificates and documents that the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deems necessary or appropriate in connection with the Transaction Documents; consummation of the transactions contemplated by this Agreement, (iii) receive funds, make payments of funds and give receipts of funds, (iv) to prosecute, defend engage and settle in the Shareholder Representative’s discretion all indemnification disputes employ agents and representatives (including hiring accountants, legal counsel and other litigation assistance and including in court of law or any other legal proceedingprofessionals) and to incur such other expenses as it shall deem necessary or prudent in connection with the administration of the foregoing, (v) to take all actions *** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. contemplated by this Section 11.20, (vi) to accept and receive all notices, requests and demands that may be made under and notices to the Shareholder pursuant to this Agreement, the Paying Agent Agreement and (vi) to take or refrain from taking all other actions and exercise all other rights which the Escrow AgreementShareholder Representative (in its sole discretion) considers necessary or appropriate in connection with this Agreement or the any other Ancillary Agreement (including entering into any amendments that the Shareholder Representative deems desirable without the consent of the Shareholder). From The Shareholder, by accepting any portion of the Final Merger Consideration Amount and after Additional Merger Consideration Amount, agreed that such agency and proxy are coupled with an interest, and are therefore irrevocable without the Closingconsent of the Shareholder Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of the Purchaser Shareholder. All decisions and acts by the Shareholder Representative are binding upon the Shareholder, and the Shareholder does not have the right to object, dissent, protest or otherwise contest the same. The terms and conditions of this Agreement are hereby made, and are hereby acknowledged to be, dependent on the determinations and actions that are contemplated or permitted to be made by the Shareholder Representative pursuant to such appointment, and all rights of the Shareholder shall be qualified by and dependent upon such determinations and actions, irrespective of whether the Shareholder Representative is acting as an agent or power of attorney of the Shareholder.
(c) The Shareholder Representative is authorized to act on behalf of the Shareholder, and the other parties hereto shall be entitled to deal exclusively with the Shareholder Representative in respect of rely on any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in without any liability to, or obligation to inquire of, the exercise Shareholder. Each of the power other parties hereto is expressly authorized to rely on the genuineness of attorney granted the signature of the Shareholder Representative and, upon receipt of any writing which reasonably appears to have been signed by the Shareholder Representative, the other parties hereto may act upon the same without any further duty of inquiry as to the genuineness of the writing. For clarity, following Parent’s payment in full to the Shareholder Representative of any amount required to be paid by Parent pursuant to this Agreement, Parent and its Non-Recourse Parties shall have no liability to the Shareholder or any of the Shareholder’s Non-Recourse Parties for such amount, including for the Shareholder Representative’s failure to distribute such amounts in any manner, including in accordance with separate agreements with the Shareholder and the Shareholder’s Non-Recourse Parties.
(d) Neither the Shareholder Representative, nor any agent employed by it, nor Parent or any of its Non-Recourse Parties, shall be liable to the Shareholder relating to the performance of the Shareholder Representative’s duties under this Agreement for any errors in judgment, negligence, oversight, breach of duty or otherwise by the Shareholder Representative, except the Shareholder Representative may be liable to the extent it is finally determined in a court of competent jurisdiction by clear and convincing evidence that the actions taken or not taken by the Shareholder Representative constituted willful misconduct. The Shareholder Representative shall be indemnified and held harmless by the Shareholder against all Losses paid or incurred in connection with any action, suit, proceeding or claim to which the Shareholder Representative is made a party by reason of the fact that it was acting as the Shareholder Representative pursuant to this Section 4.2Agreement; provided, which power of attorneyhowever, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should that the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail entitled to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser indemnification hereunder to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition extent it is finally determined in a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following by clear and convincing evidence that the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential actions taken or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred taken by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or constituted willful misconduct. The Shareholder Representative will hold these funds separate from its corporate fundsshall be protected in acting upon any notice, will not use these funds for its operating expenses statement or certificate believed by him to be genuine and to have been furnished by the appropriate Person and in acting or refusing to act in good faith or any other corporate purposes and matter.
(e) At least three (3) Business Days prior to the Closing Date, the Shareholder Representative shall provide written notice to Parent of the amount of cash (the “Shareholder Representative Expense Amount”) that will not voluntarily make these funds available be retained from the Base Closing Cash Amount by the Shareholder Representative to its creditors in pay (at the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees Shareholder Representative’s sole discretion), (i) any fees, costs and expenses reasonably incurred by the Shareholder Representative related to the negotiation, preparation, execution or delivery of this Agreement or any of the other Ancillary Agreements, or the consummation of the transactions contemplated by this Agreement or any of the other Ancillary Agreements (to the extent not paid at the Closing) and (ii) any fees, expenses, costs, losses or damages it incurs in performing its duties and obligations under this Agreement, including fees, costs and expenses incurred pursuant to the procedures and provisions set forth in Section 2.9, and legal, accounting and consultant fees, expenses and costs for reviewing, analyzing, defending, pursuing, or prosecuting any claim or process arising under or pursuant to this Agreement or any of the other Ancillary Agreements, including amounts owed to the Neutral Firm pursuant to Section Section 2.9.(c). The Shareholder Representative shall be permitted to pay amounts (including to itself) out of the Shareholder Representative Expense Account from time to time in order to perform its duties on behalf of the Shareholder hereunder. The Shareholder Representative may, in its sole and the agreements ancillary hereto; provided that absolute discretion, invest and reinvest all or any portion of the Shareholder Representative Expense Fund not ultimately required for Amount (including any interest earned thereon) in any manner the payment of such fees and expenses shall be delivered by Shareholder Representative so determines or, at the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion sole option of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination , it may elect not to invest or reinvest all or any portion of the Shareholder Representative’s engagement Representative Expense Amount (and following including any interest earned thereon). The Shareholder Representative will retain the completion amounts in the Shareholder Representative Expense Account for so long as it shall determine in its reasonable discretion. After the Shareholder Representative determines in its sole discretion that the Shareholder Representative no longer needs to retain any portion of the Shareholder Representative’s responsibilities) shall also Representative Amount, the balance of the Shareholder Representative Expense Amount, if any, will be delivered by the Escrow Agent distributed to the Paying Agent for further distribution to the Shareholders based on the WaterfallShareholder.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption approval of the Merger and this AgreementAgreement by the Security Holders, each Shareholder irrevocably approves of the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (Security Holders shall be deemed to have agreed to appoint the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Principal Shareholders as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative for and on behalf of all Shareholdersthe Security Holders to give and receive notices and communications, to authorize payment to any Indemnified Party from the Escrow Fund in satisfaction of claims by any Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to such claims, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any Security Holder or by any such Security Holder against any Indemnified Party or any dispute between any Indemnified Party and all matters arising out of or any such Security Holder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed by the Security Holders from time to time upon not less than thirty (30) calendar days prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed or any change to the agency made unless holders of a two-thirds interest of the Escrow Fund agree to such removal and to prosecutethe identity of the substituted agent or such change. Notwithstanding the foregoing, defend and settle a vacancy in the position of Shareholder Representative may be filled by the holders of two-thirds in interest of the Escrow Fund. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderSecurity Holders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder as Shareholder Representative while acting in its capacity as good faith and in the Shareholder Representative, except exercise of reasonable judgment. The Security Holders on whose behalf the Escrow Shares were contributed to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance Escrow Fund shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents Shareholder Representative (collectively, “Shareholder Representative LossesExpenses”). Following the termination of the Escrow Period, in each case as such the resolution of all Unresolved Claims and the satisfaction of all claims made by Indemnified Parties for Losses, the Shareholder Representative Loss is suffered or incurred; providedshall have the right to recover Shareholder Representative Expenses from the Escrow Fund prior to any distribution to the Principal Shareholders and Principal Shareholder Affiliates, that in the event that and prior to any such distribution, shall deliver to the Escrow Agent a certificate setting forth the Shareholder Representative Loss is finally adjudicated to have been directly caused by the fraudExpenses actually incurred. A decision, willful misconductact, gross negligence consent or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount including an amendment, extension or waiver of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above9.3 and Section 9.4 hereof, shall constitute a decision of the provisions Security Holders and shall be final, binding and conclusive upon the Security Holders; and the Escrow Agent and Parent may rely upon any such decision, act, consent or instruction of this Section 4 shall applythe Shareholder Representative as being the decision, mutatis mutandisact, consent or instruction of the Security Holders. The Escrow Agent and Parent are hereby relieved from any liability to any person for any acts done by them in accordance with such decision, act, consent or instruction of the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (A) Shareholder irrevocably approves the constitution shall be constituted and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ appointed as agent (the “Shareholder Representative”"SHAREHOLDER REPRESENTATIVE") with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholdersthe Company stockholders to give and receive notices and communications, to agree to, negotiate, and each of thementer into, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each Investors, amendments, consents and waivers under this Agreement, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionscourts and awards of arbitrators with respect to indemnification claims, noticesto enter into and administer, communications and determinations by or on behalf of all Indemnitors, the Shareholders terms of this Section 8 and the Escrow Agreement, to authorize delivery to Parent of the Parent Common Stock or other property from the Escrow Fund in accordance herewith shall be given satisfaction of indemnification claims, to object to such deliveries, and to take all actions necessary or made by appropriate in the judgment of the Shareholder Representative and all such actions, noticesfor the accomplishment of the foregoing. Such agency may be changed by the holders of a majority in interest of the Company stockholders from time to time upon not less than 10 days' prior written notice to Parent. No bond shall be required of the Shareholder Representative, and determinations by the Shareholder Representative shall conclusively be deemed receive no compensation for his services. Notices or communications to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, or from the Shareholder Representative shall have full power and authority to: constitute notice to or from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder)stockholders.
4.4. (B) The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity or under the Escrow Agreement as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel and any action based upon shall be conclusive evidence of such reliance shall relieve the Shareholder Representative of any liability hereundergood faith. The Shareholders Company stockholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative him harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of his duties hereunder.
(C) The Shareholder Representative shall have reasonable access to information about the Shareholder Representative’s duties hereunder Company and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part reasonable assistance of the Shareholder RepresentativeCompany's and Parent's officers and employees for purposes of performing its duties and exercising its rights hereunder, provided that the Shareholder Representative will reimburse shall treat confidentially and not disclose any nonpublic information from or about the Shareholders the amount of such indemnified Representative Loss Company or Parent to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from anyone (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds except on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable a need to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended know basis to be applicable individuals who agree to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any treat such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representativeinformation confidentially).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement(a) The Shareholders agree to -------------------------- appoint one Person to act as their representative, each Shareholder irrevocably approves the constitution attorney in fact and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, proxy with respect to any and all certain matters arising out of or specified in connection with this Agreement (excluding pursuant to Section 10.2the "Shareholder ----------- Representative"), . The parties have designated Goelet LLC as the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the initial -------------- Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time, and a Shareholder Representative may be removed at any time by the vote of Shareholders who collectively own more than 50% of the Registrable Securities at such time (the "Majority Holders"). Should In the event of the death, resignation or ---------------- removal of the Shareholder Representative, a new Shareholder Representative shall be appointed by a vote of Majority Holders, such appointment to become effective upon the written acceptance thereof by the new Shareholder Representative. Any failure by the Majority Holders to appoint a new Shareholder Representative upon the death, resignation or removal of the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, shall not have the effect of releasing the Shareholders who from any liability under this Agreement.
(b) The Shareholder Representative shall have held, immediately prior such powers and authority as are necessary to carry out the functions assigned to the ClosingShareholder Representative under this Agreement; provided, however, that the majority -------- ------- Shareholder Representative will have no obligation to act on behalf of the voting power of the Company on an Shareholders, except as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4expressly provided herein. The Shareholder Representative shall not will at all times be liable entitled to rely on any directions received from the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faithMajority Holders. In all questions arising in respect of any matter arising under this Agreement, the The Shareholder Representative may rely on shall, at the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate expense of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum Shareholders, be entitled to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any lossengage such counsel, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs other agents and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or consultants as they shall deem necessary in connection with the acceptance, performance or administration of the Shareholder Representative’s duties exercising their powers and performing their function hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or absence of bad faith on the part of the Shareholder Representative) shall be entitled to conclusively rely on the opinions and advice of such Persons.
(c) The Shareholder Representative shall not be entitled to any fee, commission or other compensation for the performance of its services hereunder, but shall be entitled to the reimbursement by the Shareholders of all his, her or its fees and expenses incurred as the Shareholder Representative pursuant to Section 4.2 hereof. In connection with this Agreement, and any instrument, agreement or document relating hereto or thereto, and in exercising or failing to exercise all or any of the powers conferred upon the Shareholder Representative hereunder, the Shareholder Representative will reimburse shall incur no responsibility whatsoever to any Shareholder by reason of any error in judgment or other act or omission performed or omitted hereunder or any such other agreement, instrument or document, excepting only responsibility for any act or failure to act which represents willful misconduct. Each Shareholder shall indemnify, pro rata based upon such holder's percentage interest, the Shareholder Representative against all losses, damages, liabilities, claims, obligations, costs and expenses, including reasonable attorneys', accountants' and other experts' or consultant's fees and the amount of any judgment against the Shareholder Representative, of any nature whatsoever, arising out of or in connection with any claim, investigation, challenge, action or proceeding or in connection with any appeal thereof, relating to the acts or omissions of the Shareholder Representative hereunder. The foregoing indemnification shall not apply in the event of any action or proceeding which finally adjudicates the liability of the Shareholder Representative hereunder for his or her gross negligence or willful misconduct. In the event of any indemnification hereunder, upon written notice from Shareholder Representative to the Shareholders as to the existence of a deficiency toward the payment of any such indemnification amount, each such holder shall promptly deliver to the Shareholder Representative full payment of his or her ratable share of the amount of such indemnified Representative Loss to the extent attributable to deficiency, in accordance with such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwiseShareholder's percentage interest. In no event will shall the Shareholder Representative Company be required to advance its own funds on behalf of the Shareholders responsible for any reimbursement or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal indemnification of the Shareholder Representative or Representative.
(d) All of the termination of this Agreement. For the avoidance of doubt indemnities, immunities and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided powers granted to the Shareholder Representative under this Section 4.4Agreement shall survive the termination of this Agreement.
4.5. The Purchaser (e) Notwithstanding anything herein to the contrary, each Shareholder hereby acknowledges that the Company shall not be liable have any responsibility or obligation whatsoever to any such Shareholder for or to any act done other party with respect to or omitted hereunder arising out of any actions taken or any inaction by the Shareholder Representative.
4.6. A total of US$100,000 (f) The Company shall have the right to rely conclusively upon all instructions, requests, consents, elections and other actions taken or omitted to be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred taken by the Shareholder Representative in performing its duties under pursuant to this Agreement and the agreements ancillary any instrument, agreement or document relating hereto; provided that any portion , all of the Expense Fund not ultimately required for the payment of such fees and expenses which actions or omissions shall be delivered by legally binding upon all the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallShareholders.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption and delivery of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and shareholder hereby irrevocably constitutes and appoints NSummit Ventures V, L.P., Attn: ▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights▇. ▇▇▇▇▇, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for (the "Shareholder Representative") of such shareholder with full powers of substitution to act in the name, place and stead of such shareholder with respect to the performance on behalf of all Shareholders, such shareholder under terms and each provisions of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Working Capital Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Indemnification Escrow Agreement (the "Shareholder Documents"), as the same may be from time to time amended, and to do or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and refrain from doing all such actions, noticesfurther acts and things, and determinations by to execute all such documents, as the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deem necessary or appropriate in connection with any of the Transaction transactions contemplated under this Shareholder Documents; and , including, without limitation, the power to:
(a) act for the shareholders with respect to prosecute, defend and settle all matters referred to in the Shareholder Representative’s discretion Documents, including all adjustments to the Aggregate Merger Consideration and all indemnification disputes matters set forth herein and the right to compromise or settle any such claims on behalf of the shareholders;
(b) amend or waive any provision of the Shareholder Documents (including hiring counsel any condition to Closing) in any manner which does not differentiate among the shareholders;
(c) employ and obtain the advice of legal counsel, accountants and other litigation assistance professional advisors as the Shareholder Representative, in his or her sole discretion, deems necessary or advisable in the performance of his or her duties as the Shareholder Representative and including rely on their advice and counsel;
(d) incur any expenses, liquidate and withhold assets received on behalf of the shareholders prior to their distribution to the shareholders to the extent of any amount which the Shareholder Representative deems necessary for payment of or as a reserve against expenses, and pay such expenses or deposit the same in court of law or any other legal proceedingan interest-bearing bank account established for such purpose;
(e) and to receive all notices, requests communications and demands deliveries hereunder on behalf of the shareholders under the Shareholder Documents; and
(f) do or refrain from doing any further act or deed on behalf of the shareholders which the Shareholder Representative deems necessary or appropriate, in his or her sole discretion, relating to the subject matter of the Shareholder Documents as fully and completely as any of the shareholders could do if personally present and acting and as though any reference to the shareholders in the Shareholder Documents were a reference to the Shareholder Representative.
(g) The appointment of the Shareholder 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 Shareholder Representative as the acts of the shareholders in all matters referred to in the Shareholder Documents. Each shareholder hereby ratifies and confirms all that the Shareholder Representative shall do or cause to be done by virtue of such Shareholder Representative's appointment as Shareholder Representative of such shareholder. The Shareholder Representative shall act for the shareholders on all of the matters set forth in the Shareholder Documents in the manner the Shareholder Representative believes to be in the best interest of the shareholders, but the Shareholder Representative shall not be responsible to any shareholder for any loss or damage any shareholder may be made suffer by reason of the performance by the Shareholder Representative of such shareholder Representative's duties under the Shareholder Documents, other than loss or damage arising from willful misconduct or bad faith in the performance of such Shareholder Representative's duties under the Shareholder Documents. Each of the shareholders hereby expressly acknowledges and pursuant agrees that the Shareholder Representative is authorized to this Agreementact on behalf of such shareholders notwithstanding any dispute or disagreement among the shareholders, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser that any person shall be entitled to deal exclusively with the Shareholder Representative in respect of rely on any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in under the exercise Shareholder Documents without liability to, or obligation to inquire of, any of the power of attorney granted to shareholders. If the Shareholder Representative pursuant resigns or ceases to this Section 4.2function in such capacity for any reason whatsoever, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as then the successor Shareholder Representative hereunder. If at shall be the person which the shareholders appoint; provided, however, that if for any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a reason no successor Shareholder Representative has been appointed within five thirty (530) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designateddays, then Purchaser may any shareholder shall have the right to petition a court of competent jurisdiction to appoint for appointment of a successor Shareholder to act as new Shareholder Representative hereunderRepresentative. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect shareholders do hereby jointly and severally agree to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless from and against any loss, and all liability, deficiency, damageloss, cost, claim, penalty, fine, forfeiture, damage or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), without limitation attorneys' fees) reasonably incurred or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The the performance of such Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by Representative's duties under the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required Documents except for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallwillful misconduct or bad faith.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (i) By virtue of the execution or adoption approval of the Merger and this AgreementAgreement by the Requisite Stockholder Approval, each Shareholder irrevocably approves of the constitution and appointment of, and hereby irrevocably constitutes and appoints NStockholders shall be deemed to have agreed to appoint J▇▇▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights▇▇▇▇, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the “Shareholder Representative” for and on behalf of the Stockholders to take all Shareholdersactions under this Agreement that are to be taken by the Shareholder Representative. The Shareholder Representative is authorized and empowered to take any and all actions which it believes are reasonably necessary or appropriate under this Agreement, including without limitation giving and receiving notices and communications, to authorize payment to any Buyer Indemnified Party from the Escrow Fund in satisfaction of claims by any Buyer Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to such claims, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Buyer Indemnified Party against any Stockholder or In the Money Optionholder or by any such Stockholder or In the Money Optionholder against any Buyer Indemnified Party or any dispute between any Buyer Indemnified Party and all matters arising out of any such Stockholder or In the Money Optionholder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices, communications and determinations by to take all other actions that are either (i) necessary or on behalf appropriate in the judgment of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed from time to time upon not less than thirty (30) days prior written notice to Buyer Indemnified Parties; provided, however, that the Shareholder Representative may not be removed unless holders of seventy-five percent (75%) interest of the Escrow Fund agree to such removal and all such actions, noticesto the identity of the substituted agent. A vacancy in the position of Shareholder Representative may be filled by the holders of a majority in interest of the Escrow Fund. No bond shall be required of the Shareholder Representative, and determinations by the Shareholder Representative shall conclusively be deemed not receive any compensation for its services. Notices or communications to have been authorized by, or from the Shareholder Representative shall constitute notice to or from the Stockholders and shall be binding upon, any and all Shareholders.
4.2In the Money Optionholders. Without limiting the generality of the foregoing, the Shareholder Representative shall have the full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with interpret all the terms and conditions provisions of this Agreement and the Escrow Agreement; to negotiate and sign all documents consent to any amendment hereof thereof in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the its capacity as Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5ii) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders Stockholders and In the Money Optionholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents Shareholder Representative (collectively, “Shareholder Representative LossesExpenses”). This indemnification shall survive termination of this Agreement. A decision, in each case as such Representative Loss is suffered act, consent or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part instruction of the Shareholder Representative, including an amendment, extension or waiver of this Agreement, shall constitute a decision of the Stockholders and In the Money Optionholders and shall be final, binding and conclusive upon the Stockholders and In the Money Optionholders; and the Escrow Agent and Buyer may rely upon any such decision, act, consent or instruction of the Shareholder Representative will reimburse as being the Shareholders decision, act, consent or instruction of the amount of such indemnified Representative Loss to Stockholders and In the extent attributable to such fraud, willful misconduct, gross negligence or bad faithMoney Optionholders. If not paid directly to the The Shareholder Representative by the Shareholdersmay in all questions arising under this Agreement seek advice of legal counsel, any such Representative Losses may be recovered and for anything done, omitted or suffered in good faith by the Shareholder Representative from (i) the funds in the Expense Fundaccordance with such advice, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder Stockholder or In the Money Optionholder. The Escrow Agent and Buyer Indemnified Parties are hereby relieved from any liability to any person for any act done decision, act, consent or omitted hereunder by instruction of the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Stericycle Inc)
Shareholder Representative. 4.1. By virtue of the execution (a) Each Shareholder, for itself or adoption of this Agreementhimself and for its or his successors and assigns, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably makes, constitutes and appoints N▇▇▇▇ ▇▇▇▇▇ (the “▇, in his capacity as Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true sole and lawful exclusive agent, representative and attorney-in-fact and representative of such Shareholder, to act for and on behalf of all Shareholders, and each of them, such Shareholder with respect to the matters set forth in this Section 11.17, and the Shareholder Representative hereby accepts such appointment. Each Shareholder acknowledges that the appointment of the Shareholder Representative is coupled with an interest and may not be revoked. Any such actions taken, exercises of rights, power or authority, and any decision or determination made by the Shareholder Representative consistent with this Section 11.17, shall be absolutely and irrevocably binding on each Shareholder as if such Shareholder personally had taken such action, exercised such rights, power or authority or made such decision or determination.
(b) In furtherance of the appointment of the Shareholder Representative, each Shareholder, fully and without restriction (in each case, other than in the case of any Ancillary Documents solely between a particular Shareholder and a third party, for which such Shareholder will retain all matters arising out of rights and obligations, including notice), (i) agrees to be bound by all notices given and received and agreements and determinations made by and documents executed and delivered by the Shareholder Representative under or in connection with this Agreement, the Ancillary Documents or any of the transactions contemplated thereby, and (ii) authorizes the Shareholder Representative to (A) execute, deliver and receive deliveries of all agreements, certificates, statements, notices, certificates, approvals, extensions, waivers, undertakings, amendments, and other documents required or permitted to be given in connection with Section 2.2, Section 3.3 and Section 7.3 and to waive any closing deliverables of the Buyer or approve any press releases or public announcements in connection therewith, (B) deliver to Buyer any agreements, certificates, statements, notices, certificates, approvals, extensions, waivers, undertakings, amendments, and other documents required or permitted to be given pursuant to this Agreement and have been executed by Shareholders and deposited with the Shareholder Representative for purpose of such delivery, (excluding C) on behalf of the applicable Shareholders, dispute or refrain from disputing any claim made by Buyer under this Agreement or the Escrow Agreement, and negotiate and compromise any dispute which may arise under Section 3.3 or Section 9.2(a) of this Agreement or the Escrow Agreement, (D) sign any releases or other documents with respect to any such dispute or remedy described in subsection (C), (E) subject to any additional consents required pursuant to Section 10.2)11.9, the Paying Agent negotiate, execute, and deliver any amendments to this Agreement, (F) petition the Escrow Agent for the release of any or all funds due to the Founders or the Shareholders under Section 3.3 and Section 3.1 of this Agreement, respectively, and the Escrow Agreement and, subject to the Shareholder Representative’s other responsibilities under this subsection, pay to each Founder or other Shareholder, as applicable, such Founder’s or other Shareholder’s Pro Rata Share of such funds, (G) pay out of the Reserve Account or funds otherwise payable to Shareholders by Buyer or the Escrow Agent all fees and expenses of Shareholders (and of the Shareholder Representative acting in such capacity) incurred in connection with the transactions contemplated by this Agreement and the agreements ancillary hereto following Ancillary Documents, including without limitation the Closing fees and taking any action or omitting to take action on behalf expenses of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsAgent, noticescounsel, communications accountants, investment bankers and determinations other professional advisors retained by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirmtransactions, and hereby ratifies (H) bring or refrain from bringing any action, suit or proceeding after the Closing, by and confirmson behalf of any or all Shareholders, against Buyer, any Company Group Member or any other Indemnifying Party in connection with this Agreement and the Ancillary Documents and the transactions contemplated hereby and thereby pursuant to Section 9.2(f). Except for any obligations for which Shareholders are severally, but not jointly, liable, payments made by the Shareholder Representative under subsection (G) above will be considered to be paid by all Shareholders in accordance with their respective Pro Rata Shares. Any amounts remaining in the Reserve Account following the final resolution of the Closing Working Capital and Closing Cash under Section 3.3 shall be promptly paid to the Shareholders in accordance with their respective Pro Rata Shares.
(c) If any Shareholder Representative resigns, ceases to be a legal entity, dies or becomes incapacitated, its or his successor will be appointed within 15 days of such event by the Shareholders owning a majority of the Shares held by all of the Shareholders immediately prior to the Closing, including each of the Founders. The decisions and actions of any successor Shareholder Representative will be, for all purposes, those of the Shareholder Representative as if originally named herein. The death or incapacity of any Shareholder will not terminate the authority and agency of the Shareholder Representative. Any successor Shareholder Representative will provide Buyer with prompt written notice of its or his appointment.
(d) Buyer will be entitled to rely exclusively upon any communication given or other action taken by the Shareholder Representative in accordance with this Agreement and will not be liable to Shareholders or any other Person for any action taken or not taken in reliance upon the exercise Shareholder Representative. ▇▇▇▇▇ will not be obligated to inquire as to the authority of the power of attorney granted to the Shareholder Representative pursuant with respect to this the taking of any action set forth in Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should 11.17(b) that the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, takes on behalf of Shareholders.
(e) Each Shareholder agrees that the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and liable for any actions taken or omitted to be taken under or in connection with this Agreement or the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser Escrow Agreement or the transactions contemplated hereby or thereby, except to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition extent such actions or omissions shall have been determined by a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential have constituted willful misconduct or contingent liabilities of the Shareholders hereunder)intentional fraud.
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative(f) As used herein, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on “Pro Rata Share” means each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify issued, outstanding and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and vested Shares held by all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that such group of Shareholders, as the foregoing indemnities will survive the resignation or removal case may be, determined as of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4Closing Date.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue For purposes of this Agreement the shareholders of Benelytics and the holders of the execution or adoption Benelytics Notes, without any further action on the part of this Agreementany such person, each Shareholder irrevocably approves shall be deemed to have consented to the constitution and appointment of, and hereby irrevocably constitutes and appoints Nof ▇▇▇ ▇▇▇▇▇▇ as the representative of such persons (the “"Shareholder Representative”) with all the rights"), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholderseach such person, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative of any and all such actionsactions and the making of any decisions required or permitted to be taken by him under this Agreement, noticesincluding, without limitation, the exercise of the power to (i) execute the Escrow Agreement, (ii) authorize delivery to InsWeb of the Escrow Shares, or any portion thereof, in satisfaction of Indemnification Claims, (iii) agree to, negotiate, enter into settlements and compromises of, and determinations by demand arbitration and comply with orders of courts and awards of arbitrators with respect to such Indemnification Claims, (iv) resolve any Indemnification Claims and (v) take all actions necessary in the judgment of the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any for the accomplishment of the foregoing and all Shareholders.
4.2. Without limiting the generality of the foregoingother terms, the Shareholder Representative shall have full power conditions and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions limitations of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement. Accordingly, the Payment Agent AgreementShareholder Representative has unlimited authority and power to act on behalf of each shareholder of Benelytics and each holder of a Benelytics Note with respect to this Agreement and the Escrow Agreement and the disposition, share transfer deeds settlement or other handling of all Indemnification Claims, rights or obligations arising from and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and taken pursuant to this Agreement, the Paying Agent Agreement . The shareholders of Benelytics and the Escrow Agreement. From and after holders of the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall Benelytics Notes will be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees and InsWeb shall be entitled to ratify and confirm, and hereby ratifies and confirms, rely on any action taken by or decision of the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Representative. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including will incur no liability with respect to potential any action taken or contingent liabilities of suffered by him in reliance upon any notice, direction, instruction, consent, statement or other document believed by him to be genuine and to have been signed by the Shareholders hereunderproper person (and shall have no responsibility to determine the authenticity thereof).
4.4. The Shareholder Representative shall not be liable to the Shareholders , nor for any act done other action or omitted hereunder in its capacity as the Shareholder Representativeinaction, except to the extent caused by its his own willful misconduct, bad faith or gross negligence or bad faithnegligence. In all questions arising in respect of any matter arising under this Agreement or the Escrow Agreement, the Shareholder Representative may rely on the advice of counsel counsel, and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share for anything done, omitted or suffered in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred good faith by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as based on such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representativeadvice, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earningsanyone. The Shareholder Representative will not be liable for required to take any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or action involving any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for expense unless the payment of such fees and expenses shall be delivered by expense is made or provided for in a manner satisfactory to him. At any time during the term of the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion Agreement, holders of a majority of the Escrow Shares can appoint a new Shareholder Representative’s responsibilitiesRepresentative by written consent by sending notice and a copy of the written consent appointing such new Shareholder Representative signed by holders of a majority of the Escrow Shares to InsWeb and the Escrow Agent. All amounts remaining Such appointment will be effective upon the later of the date indicated in the Expense Fund upon termination of consent or the Shareholder Representative’s engagement (date such consent is received by InsWeb and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallAgent.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By (a) Each of the Series B Shareholders shall, by virtue of their acceptance of Parent Common Stock pursuant to the execution or adoption of this AgreementOffer, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints Nappoint ▇▇▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the -48- Shareholder Representative for and on behalf of all the Series B Shareholders, to give and each receive notices and communications, to authorize payment to Parent of themshares of Parent Common Stock or cash from the Escrow Fund in satisfaction of claims by Parent, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2)such claims, the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed by the Series B Shareholders from time to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed unless holders of a two-thirds interest of the Escrow Fund agree to such removal and to prosecute, defend and settle the identity of the substituted agent. Any vacancy in the position of Shareholder Representative may be filled by the holders of a majority in interest of the Escrow Fund. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by not receive compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderSeries B Shareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except Representative while acting in good faith and in the exercise of reasonable judgment. The Series B Shareholders on whose behalf the Escrow Amount was contributed to the extent caused Escrow Fund shall, by its willful misconduct, gross negligence or bad faith. In all questions arising in respect virtue of any matter arising under this Agreement, the Shareholder Representative may rely on the advice their acceptance of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared Parent Common Stock pursuant to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided thatOffer, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum agree to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s 's duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents (collectivelyShareholder Representative. The Shareholder Representative, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that with the consent of the record holders of a majority of the Parent Common Stock in the event that Escrow Fund, and after written notice to Parent may recover from the Escrow Fund payments for any reasonable expenses incurred in connection with the Shareholder Representative's representation hereby. The Shareholder Representative may direct the Escrow Agent (which shall follow such directions) to deliver to the Shareholder Representative Loss is finally adjudicated shares of Parent Common Stock in the Escrow Fund in order to have been directly caused by permit the fraudpayment of such expenses).
(c) A decision, willful misconductact, gross negligence consent or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount including but not limited to an amendment, extension or waiver of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above8.3 and Section 8.4 hereof, shall ----------- ----------- constitute a decision of the Series B Shareholders and shall be final, binding and conclusive upon the Series B Shareholders; and the Escrow Agent and Parent may rely upon any such decision, act, consent or instruction of the Shareholder Representative as being the decision, act, consent or instruction of the Series B Shareholders. The Escrow Agent and Parent are hereby relieved from any liability to any person for any acts done by them in accordance with such decision, act, consent or instruction of the Series B Shareholder Representative.
(d) Subject to Parent's prior claims for indemnification against the Escrow Fund, the provisions of this Section 4 Shareholder Representative shall applybe entitled to receive payment for its reasonable and documented expenses therefrom, mutatis mutandis, prior to any payments to the Company Series B Shareholders. The Shareholder Representative may direct the Escrow Agent (as if it was a which shall follow such directions) to deliver to the Shareholder Representative)Representative shares of Parent Common Stock in the Escrow Fund in order to permit the payment of such expenses.
Appears in 1 contract
Sources: Recapitalization and Exchange Offer Agreement (Internet Capital Group Inc)
Shareholder Representative. 4.1. By virtue of the execution (a) Each Shareholder hereby appoints William C. Nieto (such Person and any successor or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇successors being t▇▇ "▇▇▇▇▇ (the “Shareholder ▇▇▇▇▇▇▇▇' Representative”) with all the rights, powers and obligations contemplated by this Section 4"), and any successor Shareholder Representative(s) designated under this Section 4 the Shareholders' Representative hereby accepts such appointment, as the sole, exclusive, true and lawful agent, representative and such Shareholder's attorney-in-fact for and representative to act on behalf of all Shareholders, such Shareholder and each of them, with respect to take any and all matters arising out of actions required or permitted to be taken by such Shareholder or the Shareholders' Representative under this Agreement, the Merger Agreement or the Escrow Agreement, including, without limitation, (i) to do any and all things and to execute any and all documents or other papers, in such Shareholder's name, place and stead, in any way that each such Shareholder could do if personally present, in connection with this Agreement (excluding pursuant to Section 10.2)Agreement, the Paying Agent Merger Agreement and the Escrow Agreement and the transactions contemplated hereby or thereby, (ii) to amend, cancel or extend, or waive the terms of, this Agreement, the Merger Agreement, the Escrow Agreement and the agreements or any ancillary hereto following the Closing and taking any action or omitting agreement, (iii) to take action act on behalf of all Shareholders or each such Shareholder with respect to any claims (including the settlement thereof) made by Mercury for indemnification pursuant to Section 11.02 of them hereunder or under the Merger Agreement and with respect to any actions to be taken by the Shareholders' Representative pursuant to the terms of the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and (iv) to exercise such portion of rights, powers and authority as are incidental to the Escrow Amount foregoing. In the event that the Shareholders' Representative becomes unable or unwilling to continue in his capacity as is remaining at the end of the escrow period contemplated Shareholders' Representative under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent holders of a majority of the shares held by the holders of the Company Common Stock and the Company Preferred Stock outstanding immediately prior to the Effective Time shall promptly appoint a successor Shareholders' Representative, who shall be reasonably acceptable to Mercury. The Shareholders hereby consent to the taking by the Shareholders' Representative of any and all actions and the making of any decisions required or permitted to be taken by him under this Agreement, the Merger Agreement and or the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, .
(b) The Shareholders shall be bound by all actions taken by the Shareholder Shareholders' Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representativesuch. Mercury shall be entitled to rely, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based as being binding upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared , upon any document or other paper believed by it to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify be genuine and defend the Shareholder Representative correct and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence signed or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative sent by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders' Representative, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser Mercury shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders for any action taken or omitted to the Escrow Agent for an account maintained be taken by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the it in such reliance. All reasonable fees and expenses of the Shareholder Shareholders' Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at ClosingShareholders. The Shareholders will not receive Mercury shall in no event incur any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in liability for (i) any such interest fees or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or (ii) any other corporate purposes and will not voluntarily make these funds available losses, damages or expenses arising from or related to, directly or indirectly, any action (or failure to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred act) by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Shareholders' Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of (a) Each Shareholder, by the execution or adoption and delivery of this Agreement, each Shareholder irrevocably approves hereby consents and agrees to the constitution and appointment of, and hereby irrevocably constitutes and appoints Nof C▇▇▇ ▇▇▇▇▇▇▇▇ (▇. ▇▇▇▇▇▇ as the “Shareholder Representative”) ” for purposes of all matters expressly set forth in this Agreement to be performed by the Shareholder Representative including without limitation representing the interests of such Shareholder in any dispute relating to this Agreement in accordance with all the rights, powers Sections 1.12 and obligations contemplated 7.10. As to any matter not expressly provided for by this Section 4Agreement, the Shareholder Representative shall not be required to exercise any discretion or to take any action that exposes the Shareholder Representative to personal liability or that is contrary to this Agreement or applicable law. The Shareholder Representative may be removed at any time upon the written election of Shareholders who are owed more than fifty percent (50%) of the aggregate Hold Back Amount remaining to be distributed at any time; provided that such Shareholders elect a replacement Shareholder Representative reasonably acceptable to Parent. Each Shareholder hereby constitutes and appoints the Shareholder Representative, including any successor replacement of any such Shareholder Representative(s) designated under this Section 4 Representative, as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for such Shareholder with full power of substitution and on behalf of all Shareholdersauthority, in his discretion, to enforce this Agreement against the parties hereto, and each to execute any amendment or waiver of themthis Agreement and any other document or instrument necessary or advisable in order to carry out the provisions of this Agreement, to give and receive notices and communications and, without limiting the foregoing provisions of this Section 7.12, dispute any decision of Parent to pay itself or any Indemnitee hereunder, to agree to, negotiate, enter into settlements and compromises of, and to comply with orders of courts with respect to any dispute or loss, and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf all actions necessary or appropriate in the reasonable judgment of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actionsfor the accomplishment of the foregoing; provided, noticeshowever, and determinations by that the Shareholder Representative shall conclusively be deemed not have the power or authority to have been authorized byexecute an amendment, and shall be binding uponwaiver, document or other instrument that, notwithstanding any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid other provision to the Paying Agent contrary, increases in accordance with any material respect the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before obligations or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect liabilities of any matter arising under Shareholder without the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such mattersprior written consent of that Shareholder. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the For avoidance of doubt, in all cases the aggregate of parties hereto agree that the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby foregoing sentence shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking agreeing to any remedies available payment from the Hold Back or Earnout to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwiseParent. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available responsible for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its his duties under this Agreement and the agreements ancillary hereto; provided that Agreement. Without limiting any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion other right of the Shareholder Representative’s responsibilities. , the Shareholder Representative shall be provided reasonable access to information regarding the Company for purposes of performing his duties hereunder, provided that the Shareholder Representative shall treat confidentially any non-public information.
(b) All amounts remaining in the Expense Fund upon termination decisions of the Shareholder Representative’s engagement Representative may be relied upon by any third person, and shall be binding and conclusive upon each Shareholder.
(and following the completion of the c) The Shareholder Representative’s responsibilities) Representative shall also not be delivered by the Escrow Agent to the Paying Agent for further distribution liable, responsible or accountable in damages or otherwise to the Shareholders based on for any loss or damage incurred by reason of any act or failure to act by such Shareholder Representative, and each Shareholder shall indemnify and hold harmless the Waterfall.
4.7. To Shareholder Representative against any loss or damage except to the extent required in order for that such loss or damage shall have been the Company to exercise rights on behalf result of the Shareholders prior to Closing pursuant to this Agreement, including the exercise individual gross negligence or willful misconduct of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a such Shareholder Representative).
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Sonic Innovations Inc)
Shareholder Representative. 4.1. By virtue of (a) The Legacy Shareholders, by the execution or approval and adoption of this Agreement in the Joinder Agreement, each authorize the Shareholder irrevocably approves the constitution Representative (i) to give and appointment ofreceive all notices required to be given under this Agreement or any other related agreement, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”ii) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take any additional action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations as is contemplated to be taken by or on behalf of the Legacy Shareholders in accordance herewith shall be given or made by the terms of this Agreement.
(b) All decisions and actions by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and under this Agreement shall be binding uponupon all of the Legacy Shareholders, any and all Shareholdersno Legacy Shareholder shall have the right to object, dissent, protest or otherwise contest the same.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceedingc) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable have any liability to the Shareholders any to any Party for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith, and any act done or omitted pursuant to the advice of counsel and any action based upon shall be conclusive evidence of such reliance shall relieve the Shareholder Representative of any liability hereundergood faith. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative him harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including Loss incurred without bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder his or her duties, including any out-of-pocket costs and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, expenses and (iii) any legal fees and other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder legal costs incurred by the Shareholder Representative.
4.6. A total of US$100,000 (d) The Shareholder Representative shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser have full power and authority on behalf of each Legacy Shareholder 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 Legacy Shareholders under this Agreement.
(e) By his, her, or its approval of this Agreement, each Company Shareholder agrees, in addition to the Escrow Agent foregoing, that: (i) Acquiror and any other Acquiror Indemnified Party shall be entitled to rely conclusively on the instructions and decisions of the Shareholder Representative as to (A) the settlement of any claims for an account maintained indemnification by Acquiror, or (B) any other actions required or permitted to be taken by the Shareholder Representative under this Agreement or the Escrow Agent Agreement, as applicable, and no Party shall have any cause of action against Acquiror or such Acquiror Indemnified Party for any action taken by Acquiror or such Acquiror Indemnified Party in reliance upon the benefit instructions or decisions of the Shareholder Representative; (ii) all actions, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees decisions and expenses instructions of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to conclusive and binding upon the Legacy Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive no Company Shareholder shall have any interest or earnings on the Expense Fund and irrevocably transfer and assign to cause of action against the Shareholder Representative for any ownership right they may otherwise have had in any such interest action taken, decision made or earnings. The instruction given by the Shareholder Representative will not be liable under this Agreement, except for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred bad faith by the Shareholder Representative in performing its duties under connection with the matters described in this Agreement and the agreements ancillary heretoSection; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilitiesiii) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 are independent and severable, are irrevocable and coupled with an interest and shall applybe enforceable notwithstanding any rights or remedies that any Company Shareholder may have in connection with the contemplated transactions; and (iv) remedies available at law for any breach of the provisions of this Section are inadequate; therefore, mutatis mutandisAcquiror shall be entitled to seek temporary and permanent injunctive relief without the necessity of proving damages if Acquiror brings an action to enforce the provisions of this Section.
(f) A▇▇▇▇ ▇▇▇▇▇▇▇▇, who is serving as the Shareholder Representative may cease to serve as a representative for Legacy Shareholders (upon no less than thirty (30) days prior notice to Acquiror and each Company Shareholder). In the event of the death or permanent disability of A▇▇▇▇ ▇▇▇▇▇▇▇▇, or if A▇▇▇▇ ▇▇▇▇▇▇▇▇ shall give notice of his intent to resign, or is unwilling to serve in the capacity of Shareholder Representative , or is removed as Shareholder Representative, then Legacy Shareholders, collectively (voting together as a single class) shall, by written notice to Acquiror, appoint a successor Shareholder Representative as soon as practicable, and in no event later than thirty (30) days following such death, permanent disability or notice of intent to resign. In addition, the individual serving as the Shareholder Representative may be replaced from time to time by the approvals of the Legacy Shareholders upon not less than ten (10) days prior written notice to the Company (as if it was a Shareholder Representative and Acquiror. Each successor Shareholder Representative shall have all of the power, authority, rights and privileges conferred by this Agreement upon the original Shareholder Representative), and the term “Shareholder Representative” as used in this Agreement shall include any such successor Shareholder Representative.
(g) The provisions of this Section shall be binding upon the executors, heirs, legal representatives, personal representatives, successor trustees and successors of each Legacy Shareholder, and any references in this Agreement to a Legacy Shareholder or the Legacy Shareholders shall mean and include the successors to the rights of the Legacy Shareholders, whether under testamentary disposition, the laws of descent and distribution or otherwise.
Appears in 1 contract
Sources: Business Combination Agreement (DUET Acquisition Corp.)
Shareholder Representative. 4.1. By virtue of (a) In order to administer the execution or adoption of transactions contemplated by this Agreement, each including, without limitation, the rights and indemnification obligations of the Shareholders under Sections 2.03 and 4.03, the Shareholders hereby designate and appoint the Major Shareholder irrevocably approves the constitution as their representative for this Agreement and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact and agent for and on behalf of all Shareholderseach Shareholder (in such capacity, the "Shareholder Representative"). Said power of attorney shall be coupled with an interest and shall be irrevocable.
(b) Each Shareholder hereby authorizes the Shareholder Representative to represent each Shareholder, and each of themtheir successors, with respect to all matters arising under this Agreement, including, without limitation, (i) to take all action necessary in connection with the indemnification obligations of the Shareholders under Section 4.03, including, the defense or settlement of any claims and the making of payments with respect thereto, (ii) to give and receive all notices required to be given under this Agreement and (iii) to take any and all matters arising out of or in connection with this Agreement (excluding pursuant additional action as is contemplated to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations be taken by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderAgreement.
4.3. The Shareholder Representative may resign at any time. Should (c) In the event that the Shareholder Representative diedies, become legally incapacitated becomes unable to perform his responsibilities as Shareholder Representative or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her steadresigns from such position, the Shareholders who have held, having an aggregate of at least 50% of the ownership interest in the Company immediately prior to the ClosingMerger shall select another representative to fill such vacancy and such substituted Shareholder Representative shall be deemed to be the Shareholder Representative for all purposes of this Agreement. Upon the occurrence of such event, the majority Shareholders shall provide written notice to the Buyer and shall indicate the identity of the voting power substitute Shareholder Representative, who shall have agreed to the terms of this Section as if he were a party hereto.
(d) All decisions and actions by the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace Shareholder Representative, including, without limitation, any agreement between the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser Buyer relating to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities indemnification obligations of the Shareholders hereunder).
4.4under Section 4.03, including, the defense or settlement of any claims and the making of payments with respect hereto, shall be binding upon all the Shareholders as if they had taken such action themselves, and no Shareholder shall have the right to object, dissent, protest or otherwise contest the same. The Shareholder Representative shall incur no liability to the Shareholders with respect to any action taken or suffered by the Shareholder Representative in reliance upon any notice, direction, instruction, consent, statement or other documents believed by him to be genuinely and duly authorized, nor for any other action or inaction with respect to the indemnification obligations of the Shareholders under Section 4.03, including the defense or settlement of any claims and the making of payments with respect thereto, except to the extent resulting from the Shareholder Representative's own willful misconduct or negligence. The Shareholder Representative may, in all questions arising under this Agreement, rely on the advice of counsel, and will not be liable to the Shareholders for any act done action done, omitted or omitted hereunder suffered in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad good faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing (e) The Buyer is hereby authorized to rely conclusively on the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representativeactions, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees instructions and expenses decisions of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant respect to this Agreement, including including, without limitation, the exercise indemnification obligations of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).Shareholders under Section
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption and delivery of this Agreement, including counterparts hereof, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇Euge▇▇ ▇. ▇▇▇▇ (the “▇▇e "Shareholder Representative”) with all the rights"), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for of such Shareholder with full powers of substitution to act in the name, place and on behalf stead of all Shareholders, and each of them, such Shareholder with respect to any and all matters arising out the transfer of or in connection with this Agreement (excluding pursuant such Shareholder's Shares to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and Purchaser in accordance with the terms and conditions provisions of this Agreement Agreement, as the same may be from time to time amended, and to do or refrain from doing all such further acts and things, and to execute all such documents, as the Escrow Agreement; to negotiate and sign all documents Shareholder Representative shall deem necessary or appropriate in connection with any of the Transaction transactions contemplated hereby, including the power:
(i) to receive, hold, and amendments theretodeliver to Purchaser the certificates evidencing the Shares accompanied by executed stock powers, whether before signature guarantees, and any other documents relating thereto on behalf of Shareholders, including the power to endorse and present any such certificate or after Closing stock power on behalf of any Shareholder;
(includingii) to execute and deliver all ancillary agreements, without limitationcertificates, Escrow Agreement, and documents which the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be Shareholder Representative deems necessary or appropriate in connection with the Transaction Documentsconsummation of the transactions contemplated hereby;
(iii) to receive and receipt for all payments made by Purchaser to Shareholders under this Agreement;
(iv) to act for Shareholders with respect to all indemnification matters referred to in this Agreement, including the right to compromise on behalf of Shareholders any indemnification claim made by or against Shareholders;
(v) to terminate, amend, or waive any provision of this Agreement; provided that any such action, if material to the rights and to prosecute, defend and settle obligations of Shareholders in the reasonable judgment of the Shareholder Representative’s discretion , shall be taken in the same manner with respect to all indemnification disputes Shareholders, unless otherwise agreed by each Shareholder who is subject to any disparate treatment of a potentially adverse nature;
(including hiring counsel vi) to employ and obtain the advice of legal counsel, accountants and other litigation assistance professional advisors as the Shareholder Representative, in his sole discretion, deems necessary or advisable in the performance of his duties as Shareholder Representative and to rely on their advice and counsel;
(vii) to incur expenses of sale, including fees of brokers, attorneys and accountants incurred pursuant to the transfer of the Shares, and any other fees and expenses allocable or in court of law any way relating to such transaction or any other legal proceeding) and indemnification claim, whether incurred prior or subsequent to receive Closing (all noticesof which are hereinafter referred to as "Transaction Expenses"), requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled withhold from funds received on behalf of Shareholders prior to deal exclusively with their distribution to Shareholders any amount which the Shareholder Representative deems necessary for payment of or as a reserve against Transaction Expenses, and to pay such fees and expenses or to deposit the same in respect a bank account established for such purpose;
(viii) to pay from funds received on behalf of any matter arising under Shareholders, prior to their distribution, the Transaction DocumentsExpenses; and
(ix) to do or refrain from doing any further act or deed on behalf of Shareholders which the Shareholder Representative deems necessary or appropriate in his sole discretion relating to the subject matter of this Agreement as fully and completely as any of the Shareholders could do if personally present and acting. The appointment of the Shareholder Representative shall be deemed coupled with an interest and shall be irrevocable, and the ShareholdersPurchaser and any other Person may conclusively and absolutely rely, in their relationship with the Purchaserwithout inquiry, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, upon any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor act of Shareholders in all matters referred to in this Agreement or any other document contemplated hereby. Each of Shareholders hereby ratifies and confirms all that the Shareholder Representative hereunder. If at any time there shall not do or cause to be a done by virtue of his appointment as Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4such Shareholder. The Shareholder Representative shall not be liable to act for Shareholders on all of the Shareholders for any act done or omitted hereunder matters set forth in its capacity as this Agreement in the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, manner the Shareholder Representative may rely on believes to be in the advice best interest of counsel Shareholders and any action based upon such reliance shall relieve consistent with their obligations under this Agreement and the Waldorf Ancillary Documents, but the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable responsible to any Shareholder for any act done loss or omitted hereunder damage any Shareholder may suffer by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf reason of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred performance by the Shareholder Representative in performing its of his duties under this Agreement and the agreements ancillary hereto; provided that any portion Agreement, other than loss or damage arising from willful violation of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining law or gross negligence in the Expense Fund upon termination performance of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to his duties under this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue (a) The Shareholder Representative shall have the exclusive authority to give and receive notices and communications pursuant to the terms of this Article 6 solely with respect to indemnification claims by the Terra Tech Indemnified Parties to be satisfied solely by the delivery of Holdback Shares to the Terra Tech Indemnified Parties, to authorize delivery to the Terra Tech Indemnified Parties of the execution or adoption Holdback Shares in satisfaction of this Agreementindemnification claims by the Terra Tech Indemnified Parties as contemplated by Section 6.3, each Shareholder irrevocably approves the constitution to object to such deliveries, to agree to, negotiate, enter into settlements and appointment compromises of, and hereby irrevocably constitutes take legal actions and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) comply with all the rights, powers orders of courts and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf awards of all Shareholders, and each of them, arbitrators with respect to any indemnification claims by the Terra Tech Indemnified Parties that will or may be paid or otherwise satisfied solely by the delivery of Holdback Shares, and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf all actions necessary or appropriate in the judgment of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, noticesfor the accomplishment of the foregoing. No bond shall be required of the Shareholder Representative, and determinations by the Shareholder Representative shall conclusively be deemed receive no compensation for services rendered. Notices or communications to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, or from the Shareholder Representative shall have full power and authority to: constitute notice to or from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including solely with respect to potential or contingent liabilities indemnification claims by the Terra Tech Indemnified Parties to be satisfied solely by the delivery of Holdback Shares to the Shareholders hereunder)applicable Terra Tech Indemnified Parties.
4.4. (b) The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its her capacity as the Shareholder Representative, except to the extent caused by its she has acted with willful misconduct, gross negligence and any act done or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on omitted pursuant to the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderbe conclusive evidence that she did not act with gross negligence or willful misconduct. The other Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative her harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred in good faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including any out-of-pocket costs and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused expenses and legal fees and other legal costs reasonably incurred by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified ("Outstanding Shareholder Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faithExpenses"). If not paid directly to the Shareholder Representative by the Company Shareholders, any such Representative Losses losses, liabilities or expenses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts Shares (if any) that otherwise would otherwise be distributable distributed to the Company Shareholders hereunder, and such recovery (if any) of Outstanding Shareholder Representative Expenses from such Escrow Shares will be made from the Company Shareholders according to their respective Pro Rata Shares.
(c) A decision, act, consent or instruction of the Shareholder Representative shall constitute a decision of all the Company Shareholders and shall be final, binding and conclusive upon each of the Company Shareholders, and the Escrow Agent and Terra Tech may rely upon any decision, act, consent or instruction of the Shareholder Representative as being the decision, act, consent or instruction of each of the Company Shareholders.
(iiid) Notwithstanding the foregoing, the Shareholder Representative will not take any other funds that become payable to the Shareholders action required or authorized under this Agreement at such time as such amounts would otherwise be distributable to without the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources prior written consent of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ acting on behalf of the Shareholders Management Group (the "Management Group Representative"), which consent shall not be unreasonably withheld, delayed, denied, or otherwiseconditioned. The Shareholders acknowledge and agree that Management Group Representative may be replaced at any time by the foregoing indemnities will survive affirmative written consent of holders of a majority of the resignation or removal Shares held by the Management Group (measured as of immediately prior to the Closing). In the event the Shareholder Representative and the Management Group Representative are unable to agree on an action required or permitted to be taken by the termination Shareholder Representative hereunder, such matter will be decided by written consent of holders of a majority of the Shares held by all Company Shareholders (measured as of immediately prior to Closing), or their respective heirs and assigns, and such decision shall be binding on all Company Shareholders. In the event of a deadlock after all Company Shareholders vote, the matter under consideration will be decided pursuant to the disputes resolution procedure set forth in Section 6.7(e) immediately below.
(e) The exclusive method for resolving any and all disputes, claims or controversies arising out of or relating to this AgreementSection 6.7, shall be final and binding arbitration before JAMS, or its successors. Either the Shareholder Representative of the Management Group Representative may commence the arbitration process called for in this Section 6.7 by filing a written demand for arbitration with JAMS, with a copy to all of the Company Shareholders. Notwithstanding the amount or issue in dispute, the arbitration will administered in accordance with the Streamlined Arbitration Rules and Procedures (the "Rules") in effect at the time of filing of the demand for arbitration, and conducted at a location determined by the arbitrator within Alameda County, California. The arbitrator shall be a retired judge with significant experience resolving commercial disputes. The arbitrator's fees in connection with any such arbitration proceeding shall initially be shared equally among the Company Shareholders, subject to any reallocation in accordance with the arbitrator's decision. The arbitrator will also have the authority to award reimbursement of reasonable attorney's fees to the prevailing party to be shared by one or both of the other parties as determined by the arbitrator. In light of the parties' desire to proceed informally, expeditiously and at minimal expense, the parties agree to waive all discovery and any oral hearing and to submit all disputes to the arbitrator based solely upon written submissions. The arbitrator shall apply the substantive and procedural laws of the State of California, without regard to the conflicts of law principles of such state. The arbitrator's decision and award shall be rendered in writing with counterpart copies to all parties. Judgment upon an arbitration may be entered in any court having competent jurisdiction thereof, and shall be binding, final and non-appealable. In the event of any conflict between this Section 6.7(e) and the Rules, this Section 6.7(e) shall govern and control. For the avoidance of doubt and notwithstanding anything doubt, the arbitration procedure in this Agreement Section 6.7(e) shall only apply to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the disputes among Company Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended with respect to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative6.7, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties disputes under this Agreement and the agreements ancillary hereto; provided that may be resolved in any portion court of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining competent jurisdiction in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to accordance with Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).11.6
Appears in 1 contract
Sources: Merger Agreement (Terra Tech Corp.)
Shareholder Representative. 4.1. By The Selling Parties, by virtue of their execution and delivery of this Agreement or, with respect to Selling Parties that are not signatories to this Agreement, by virtue of approval of this Agreement and the execution or adoption Merger by the Shareholders in accordance with the requirements of Delaware Law and by their acceptance of any Merger Consideration due to them, will be deemed to have irrevocably constituted and appointed, effective as of the date of this Agreement, each Shareholder irrevocably approves IBF (together with its permitted successors, the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “"Shareholder Representative”) with all the rights"), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, their true and lawful agent, representative agent and attorney-in-fact for and on behalf of all Shareholdersfact, and the Shareholder Representative, by its execution of this Agreement shall be deemed to have accepted such appointment, to enter into any agreement in connection with the transactions contemplated by this Agreement, the Deposit Escrow Agreement, the Interim Escrow Agreement or the Escrow Agreement, to exercise all or any of the powers, authority and discretion conferred on it under any such agreement, to act as proxy for each Selling Party in connection with any shareholder approvals required in connection with the transactions contemplated by this Agreement, to waive or modify any terms and conditions of themany such agreement (other than payment of the Merger Consideration due at Closing), to give and receive notices on their behalf, and to be their exclusive representative with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2)matter, the Paying Agent Agreementsuit, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any claim, action or omitting proceeding arising with respect to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsany transaction contemplated by any such agreement, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreementthe assertion, prosecution, defense, settlement or compromise of and claim, action or proceeding for which any Shareholder, Purchaser, or the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that Merger Sub may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with indemnification and the Shareholder Representative in respect of any matter arising under the Transaction Documentsagrees to act as, and to undertake the Shareholdersduties and responsibilities of, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such mattersagent and attorney-in-fact. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the This power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being is coupled with an interest, interest and is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4irrevocable. The Shareholder Representative shall not be liable for any action taken or not taken by him in his capacity as Shareholder Representative either (i) with the consent of stockholders who, as of the date of this Agreement, own a majority in number of the outstanding shares of Company voting stock (considered on an as converted basis), or (ii) in the absence of its own willful misconduct. If the Shareholder Representative shall be unable or unwilling to serve in such capacity, its successor shall be named by those persons holding a majority of the shares of Company voting stock outstanding immediately prior to the Shareholders for Effective Time who shall serve and exercise the powers of Shareholder Representative hereunder. Solely with respect to any act done or omitted hereunder actions taken by the Shareholder Representative in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreementsuch, the Shareholder Representative may rely on shall have no liability to Purchaser, the advice Company or any of counsel and any action their respective affiliates except for claims based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence fraud or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder actions by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption of this Agreement, execution or submission of a Form of Election or the acceptance of any portion of the Merger Consideration, each Company Holder hereby designates the Shareholder irrevocably approves the constitution Representative to execute any and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and instruments or other documents on behalf of all Shareholderssuch Company Holder, and each of them, with respect to do any and all matters arising out of other acts or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action things on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionssuch Company Holder, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by which the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deem necessary or appropriate in connection with the Transaction Documents; and to prosecuteadvisable, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that which may be made under and required pursuant to this Agreement, the Paying Agent Ancillary Agreements or otherwise, in connection with the consummation of the transactions contemplated hereby or thereby and the performance of all obligations hereunder or thereunder at or following the Closing, including, but not limited to, the exercise of the power to: (i) execute the Ancillary Agreements on behalf of each Company Holder; (ii) act for each Company Holder with respect to any the Ancillary Agreements; (iii) give and receive notices and communications to or from the Parent relating to this Agreement, the Ancillary Agreements or any of the transactions and other matters contemplated hereby or thereby (except to the extent that this Agreement or any Ancillary Agreement expressly contemplates that any such notice or communication shall be given or received by such Company Holders individually); (iv) to enforce and protect the rights and interests of the Company Holders and to enforce and protect the rights and interests of such Persons arising out of or under or in any manner relating to this Agreement and the Escrow Agreement. From transactions provided for herein, from and after the Closing; (v) directing the method of payment for any deferred payments owed to the Company Holders pursuant to Tax Receivables Agreement and coordinating with Parent with respect thereto; (vi) execute a Section 431 Election, to the Purchaser shall be entitled to deal exclusively with extent applicable; and (vii) take all actions necessary or appropriate in the judgment of the Shareholder Representative in for the accomplishment of the foregoing. The Shareholder Representative shall have authority and power to act on behalf of each Company Holder with respect to the disposition, settlement or other handling of any matter all claims under this Agreement or the Ancillary Agreements and all rights or obligations arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, hereunder or thereunder. The Company Holders shall be bound by all actions taken and documents executed by the Shareholder Shareholders Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify Agreement and confirmthe Ancillary Agreements, and hereby ratifies the Parent and confirms, Surviving NewCo and any of their affiliates shall be entitled to rely on any action taken by or decision of the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Representative. The Shareholder Representative may resign at any timeshall receive no compensation for its services. Should Notices or communications to or from the Shareholder Representative die, become legally incapacitated shall constitute notice to or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve from each Company Holder.
(b) In performing the functions specified in his or her steadthis Agreement, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to any Company Holder in the Shareholders for any act done absence of gross negligence or omitted hereunder in its capacity as willful misconduct on the part of the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders Each Company Holder shall severally and not jointly (based on each Shareholdersuch Company Holder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided thatPro Rata Share), for the avoidance of doubtand not jointly, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend hold harmless the Shareholder Representative from and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, loss incurred without gross negligence or expense (including willful misconduct on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of its duties hereunder. The Shareholder Representative may draw at any time, and from time to time, from the Shareholder Representative’s Administrative Expense Account to pay any amounts due by the Company Holders hereunder, including, any losses, third-party fees, expenses or costs it incurs in performing its duties hereunder and obligations under this Agreement by or on behalf of the Transaction Documents Company Holders, including, without limitation, legal and consultant fees, expenses and costs for reviewing, analyzing and defending any claim or process arising under or pursuant to this Agreement or any Ancillary Agreement (collectively, “Representative LossesAdministrative Costs”). From and after the Closing, in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, if the Shareholder Representative will reimburse determines that the Shareholders amounts in the amount Administrative Expense Account are
(c) The grant of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from authority provided for herein (i) is coupled with an interest and shall be irrevocable and survive the funds in the Expense Funddeath, incompetency, bankruptcy or liquidation of any Company Holder and (ii) shall survive the funds in consummation of the Escrow Amount at such time as such amounts would otherwise be distributable Mergers, and any action taken by Shareholder Representative pursuant to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything authority granted in this Agreement to the contraryshall be effective and binding on each Company Holder notwithstanding any contrary action of or direction from such Company Holder, the limitations on liability except for actions or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the omissions of Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or constituting willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Transaction Agreement (Avista Healthcare Public Acquisition Corp.)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption and delivery of this Agreement, each of the Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇Ft. ▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4), and any successor Shareholder Representative(s) designated under this Section 4 Ft. ▇▇▇▇ hereby accepts such appointment, as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for of the Shareholders with full power of substitution to act in the name, place and on behalf stead of all Shareholders, the Shareholders and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or act on behalf of the Shareholders in accordance herewith shall be given any litigation or made by arbitration involving this Agreement and the Shareholder Representative and Transactions, do or refrain from doing all such actions, noticesfurther acts and things, and determinations by execute all such documents as the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deem necessary or appropriate in connection with the Transaction Documents; and Transactions, including, without limitation, the power:
(i) to prosecute, defend and settle act for the Shareholders with regard to matters pertaining to indemnification referred to in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, including the Paying Agent power to compromise any indemnity claim on behalf of the Shareholders and to transact matters of litigation;
(ii) to execute and deliver all ancillary agreements, certificates and documents that the Shareholder Representative deems necessary or appropriate in connection with the consummation of the Transactions;
(iii) to receive funds and give receipts for funds, including in respect of any adjustments to the Purchase Price;
(iv) to do or refrain from doing any further act or deed on behalf of the Shareholders that the Shareholder Representative deems necessary or appropriate in his sole discretion relating to the subject matter of this Agreement as fully and completely as the Escrow Shareholders could do if personally present; and
(v) to receive service of process in connection with any claims under this Agreement. From .
(b) The appointment of the Shareholder Representative shall be deemed coupled with an interest and after shall be irrevocable, and shall be binding upon the Closingsuccessors, heirs, executors, administers and legal representatives of each Shareholder and shall not be affected by, and shall survive, the Purchaser death, incapacity, bankruptcy, dissolution or liquidation of any Shareholder. All decisions, actions, consents and instructions by the Shareholder Representative shall be entitled binding upon all of the Shareholders, and no Shareholder shall have the right to deal exclusively with object to, dissent from, protest or otherwise contest any such decision, action, consent or instruction. The Parent, the Buyer, each Company and any other Person may conclusively and absolutely rely, without inquiry, upon any action of the Shareholder Representative in all matters referred to herein. All notices required to be made or delivered by the Parent, the Buyer or any Company to the Shareholders shall be made to the Shareholder Representative for the benefit of the Shareholders and shall discharge in full all notice requirements of the Parent, the Buyer and such Company to the Shareholders with respect thereto. The Shareholders hereby confirm all that the Shareholder Representative shall do or cause to be done by virtue of any matter arising under his appointment as the Transaction Documents, and Shareholder Representative of the Shareholders, . The Shareholder Representative shall act for the Shareholders on all of the matters set forth in their relationship this Agreement in the manner the Shareholder Representative believes to be in the best interest of the Shareholders and consistent with the Purchaserobligations under this Agreement, but the Shareholder Representative shall not be bound responsible to the Shareholders for any loss or damages the Shareholders may suffer by all actions taken the performance by the Shareholder Representative in connection with such matters. By virtue of executing or adopting its duties under this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken other than loss or damage arising from willful violation of the Law by the Shareholder Representative or gross negligence in the exercise of the power of attorney granted to performance by the Shareholder Representative pursuant to of its duties under this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderAgreement.
4.3. (c) The Shareholder Representative may resign at any time. Should , and may be removed for any reason or no reason by the Shareholder Representative die, become legally incapacitated vote or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the written consent of Shareholders who have held, immediately prior to the Closing, the holding a majority of the voting power Shares as of the Company Closing (the “Majority Shareholders”), with the prior consent of Buyer, not to be unreasonably withheld. In the event of the death, incapacity, resignation or removal of the Shareholder Representative, a new Shareholder Representative shall be appointed by the vote or written consent of the Majority Shareholders, with the prior consent of Buyer, not to be unreasonably withheld. Notice of such vote or a copy of the written consent appointing such new Shareholder Representative shall be sent to Buyer, such appointment to be effective upon the later of the date indicated in such consent or the date such consent is received by Buyer; provided, that until such notice is received, Parent, Buyer, Ft. ▇▇▇▇ and TPS, as applicable, shall be entitled to rely on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable decisions, actions, consents and instructions of the prior Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate described in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunderSection 14.14(a).
4.4. (d) The Shareholder Representative shall not be liable entitled to reimbursement from the Shareholders for any act done or omitted hereunder Shareholder Representative Expense Fund and/or otherwise received by it in its capacity as the Shareholder Representative, except Representative pursuant to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt , for all reasonable expenses, disbursements and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement advances (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result disbursements of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate fundscounsel, will not use these funds for its operating expenses or any experts and other corporate purposes agents and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably consultants) incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary heretosuch capacity; provided that any portion of the Expense Fund not ultimately required for provided, that, other than the payment of such fees and expenses contemplated under Section 3.5 hereof, neither Parent, Buyer nor the Companies shall be delivered by the Escrow Agent have any monetary obligation or liability to the Paying Agent Shareholder Representative.
(e) Each Shareholder, severally but not jointly, agrees to indemnify and hold harmless the Shareholder Representative and his agents and other representatives from and against its Pro Rata Share of any losses, liabilities, expenses (including reasonable attorneys’ fees), judgments, fines and amounts incurred by such Persons arising out of actions taken or omitted to be taken in the Shareholder Representative’s capacity as the Shareholder Representative (except for further distribution to the Shareholders based on the Waterfall following the completion those arising out of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreementgross negligence or willful misconduct), including the exercise costs and expenses of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions investigation and defense of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)claims.
Appears in 1 contract
Sources: Asset Purchase Agreement (Meta Financial Group Inc)
Shareholder Representative. 4.1. By virtue of (i) In order to efficiently administer the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations transactions contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf Plan of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2)Arrangement, the Paying Agent Arrangement Agreement, the Escrow Agreement and the agreements ancillary hereto following Rights Indenture, including: (i) the Closing final determination of the Deferred Consideration and taking any action or omitting to take action the allocation of the Consideration among the Ample Shareholders in accordance with the terms of this Plan of Arrangement, the Arrangement Agreement and the Ample Articles; (ii) the exercise on behalf of the Ample Shareholders of any voting rights, consent rights and/or the right to direct any votes with respect to the Special Voting Share, in each case, attaching to Up-front Shares during such time as any such Up-front Shares are held in escrow pursuant to the Escrow Agreement; (iii) the determination from time to time while the Up-front Shares (or any of them) are held in escrow pursuant to this Escrow Agreement, of the number (if any) of Up-front Shares in respect of which each Ample Shareholder shall be entitled to provide instructions with respect to the exercise of any voting rights (including any right to direct the voting of the Special Voting Share) or consent right; (iv) the waiver of any condition to the obligations of Ample or the Ample Shareholders to consummate the transactions contemplated hereby; and (v) the defense and/or settlement of any claims for which the Ample Shareholder may be required to indemnify Akerna or Purchaser pursuant to the Arrangement Agreement, the Shareholder Representative is hereby appointed as the true, exclusive and lawful representative, attorney-in-fact and agent for each Ample Shareholder in accordance with, and to the extent provided for, in the Arrangement Agreement and this Plan of Arrangement.
(ii) The Shareholder Representative is hereby authorized to make all decisions, take all actions or do any and all thing necessary relating to: (i) the final determination of the Deferred Consideration and the allocation of the Consideration among the Ample Shareholders in accordance with the terms of this Plan of Arrangement, the Arrangement Agreement and the Ample Articles; (ii) the exercise on behalf of the Ample Shareholders of any voting rights, consent rights and/or the right to direct any votes with respect to the Special Voting Share, in each case, attaching to Up-front Shares during such time as any such Up-front Shares are held in escrow pursuant to the Escrow Agreement, (iii) the determination from time to time while the Up-front Shares (or any of them) are held in escrow pursuant to this Escrow Agreement, of the number (if any) of Up-front Shares in respect of which each Ample Shareholder shall be entitled to provide instructions with respect to the exercise of them hereunder any voting rights (including any right to direct the voting of the Special Voting Share) or under consent right; (iv) the waiver of any condition to the obligations of Ample or the Ample Shareholders to consummate the transactions contemplated hereby; (v) the defense and/or settlement of any claims for which the Ample Shareholder may be required to indemnify Akerna or Purchaser pursuant to the Arrangement Agreement; and (vi) any and all additional actions contemplated to be taken by the Shareholder Representative on behalf of the Ample Shareholders (or any of them) pursuant to the Arrangement Agreement, this Plan of Arrangement, the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications Rights Indenture.
(iii) Akerna and determinations by or on behalf of the Shareholders in accordance herewith Purchaser shall be given or made by able to rely conclusively on the instructions and decision of the Shareholder Representative and all such actions, notices, and determinations by as to any decision or act of the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent taken in accordance with the Waterfall and this Arrangement Agreement, and such portion this Plan of Arrangement, the Escrow Amount as is remaining at Agreement or the end Rights Indenture and no Party shall have any cause of action against Akerna or Purchaser for any action taken in reliance upon the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions instructions or decisions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes .
(including hiring counsel and other litigation assistance and including in court iv) No Ample Shareholder shall have any cause of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with action against the Shareholder Representative in respect of for any matter arising under the Transaction Documentsaction taken, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken decision made or instruction given by the Shareholder Representative in connection accordance with such matters. By virtue of executing or adopting this the Arrangement Agreement, each Shareholder agrees to ratify and confirmthis Plan of Arrangement, and hereby ratifies and confirmsthe Escrow Agreement or the Rights Indenture, any action taken except for fraud or wilful breach by the Shareholder Representative in the exercise of the power Arrangement Agreement, this Plan of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her steadArrangement, the Shareholders who have held, immediately prior to Escrow Agreement or the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4Rights Indenture. The Shareholder Representative shall not be liable to the Shareholders any Ample Shareholder for any act done action taken or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused be taken by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or them in connection with the acceptanceArrangement Agreement, performance or administration this Plan of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder RepresentativeArrangement, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt Rights Indenture in good faith and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)their reasonable judgment.
Appears in 1 contract
Sources: Arrangement Agreement (Akerna Corp.)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption approval of the Merger and this AgreementAgreement by the requisite vote of the Shareholders, each Shareholder irrevocably approves of the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Shareholders shall be deemed to have agreed to appoint TCB as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative for and on behalf of the Shareholders to take all Shareholdersactions under this Agreement that are to be taken by the Shareholder Representative. The Shareholder Representative is authorized and empowered to take any and all actions which it believes are reasonably necessary or appropriate under this Agreement, including without limitation giving and receiving notices and communications, to authorize payment to any Indemnified Party from the Escrow Fund in satisfaction of claims by any Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to such claims, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any Shareholder or by any such Shareholder against any Indemnified Party or any dispute between any Indemnified Party and all matters arising out of or any such Shareholder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices, communications and determinations by to take all other actions that are either (i) necessary or on behalf appropriate in the judgment of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed from time to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed unless holders of a two-thirds (2/3) interest of the Escrow Fund agree to such removal and all such actions, noticesto the identity of the substituted agent. A vacancy in the position of Shareholder Representative may be filled by the holders of a majority in interest of the Escrow Fund. No bond shall be required of the Shareholder Representative, and determinations by the Shareholder Representative shall conclusively be deemed not receive any compensation for its services. Notices or communications to have been authorized by, and or from the Shareholder Representative shall be binding upon, any and all constitute notice to or from the Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have the full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with interpret all the terms and conditions provisions of this Agreement and the Escrow Agreement; to negotiate and sign all documents consent to any amendment hereof thereof in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the its capacity as Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents Shareholder Representative (collectively, “Shareholder Representative LossesExpenses”). This indemnification shall survive termination of this Agreement. A decision, in each case as such Representative Loss is suffered act, consent or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part instruction of the Shareholder Representative, including an amendment, extension or waiver of this Agreement, shall constitute a decision of the Shareholders and shall be final, binding and conclusive upon the Shareholders; and the Escrow Agent and Parent may rely upon any such decision, act, consent or instruction of the Shareholder Representative will reimburse as being the Shareholders decision, act, consent or instruction of the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faithShareholders. If not paid directly to the The Shareholder Representative by the Shareholdersmay in all questions arising under this Agreement seek advice of legal counsel, any such Representative Losses may be recovered and for anything done, omitted or suffered in good faith by the Shareholder Representative from (i) the funds in the Expense Fundaccordance with such advice, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder Shareholder. The Escrow Agent and Parent are hereby relieved from any liability to any person for any act done decision, act, consent or omitted hereunder by instruction of the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, (a) The Company and Shareholder Representative represent to Acquiror that each Shareholder has irrevocably approves the constitution constituted and appointment of, and hereby irrevocably constitutes and appoints Nappointed ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and such Shareholder’s attorney-in-fact for and agent in connection with the execution and performance of its duties under this Agreement. This power is irrevocable and coupled with an interest, and shall not be affected by the death, incapacity, illness, dissolution or other inability to act of such Shareholder.
(b) The Company and Shareholder Representative represent to Acquiror that each Shareholder has irrevocably granted the Shareholder Representative full power and authority: (i) to execute and deliver, on behalf of all Shareholderssuch Shareholder, and each to accept delivery of, on behalf of themsuch Shareholder, the Ancillary Agreements and such other documents as may be deemed by the Shareholder Representative, in its sole discretion, to be appropriate to complete the Transactions; (ii) to endorse and to deliver on behalf of such Shareholder, transfer instruments representing the shares of Company Common Stock to be exchanged by such Shareholder at the Closing; (iii) to acknowledge receipt at the Closing of the consideration payable to such Shareholder at the Closing, and to designate the manner of payment of such consideration; (iv) to (A) negotiate and compromise, on behalf of such Shareholder, any dispute that may arise under, and to exercise or refrain from exercising any remedies available under, this Agreement; and (B) execute, on behalf of such Shareholder, any settlement agreement, release or other document with respect to any and all matters arising out of such dispute or in connection with this Agreement remedy; (excluding pursuant v) to Section 10.2)give or agree to, the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding uponShareholder, any and all Shareholders.
4.2. Without limiting the generality of the foregoingconsents, waivers, amendments or modifications, deemed by the Shareholder Representative shall have full power and authority to: from and after the ClosingRepresentative, direct the Paying Agent in its sole discretion, to disburse amounts paid to the Paying Agent in accordance with the Waterfall and be necessary or appropriate, under this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8and, in accordance with the Waterfall each case, to execute and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all deliver any documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with therewith; (vi) to enforce, on behalf of such Shareholder, any claim against Acquiror arising under this Agreement; (vii) to engage attorneys, accountants and agents at the Transaction Documentsexpense of such Shareholder; and (viii) to prosecuteagree, defend and settle in the Shareholder Representative’s discretion all indemnification disputes on behalf of such Shareholder, to amend this Agreement (including hiring counsel and other litigation assistance and including in court of law than this Section 10.02) or any other legal proceeding) and of the instruments to receive all notices, requests and demands that may be made under and delivered to Acquiror by such Shareholder pursuant to this Agreement; and (ix) to give such instructions and to take such action or refrain from taking such action, the Paying Agent Agreement and the Escrow Agreement. From and after the Closingon behalf of such Shareholder, the Purchaser shall be entitled to deal exclusively with as the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholdersdeems, in their relationship with its sole discretion, necessary or appropriate to carry out the Purchaser, shall be bound by provisions of this Agreement.
(c) The Company and Shareholder Representative represent to Acquiror that each Shareholder has agreed to the following: (i) in all actions taken matters in which action by the Shareholder Representative in connection with is required or permitted, the Shareholder Representative is authorized to act on behalf of such matters. By virtue of executing Shareholder, notwithstanding any dispute or adopting this Agreement, each disagreement between such Shareholder agrees to ratify and confirmthe Shareholder Representative, and hereby ratifies Acquiror will be entitled to rely on any and confirms, any all action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement without any liability to, or obligation to inquire of, any Shareholder, notwithstanding any knowledge on the part of Acquiror of any such dispute or disagreement; (including with respect ii) notice to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except delivered in the manner provided in Section 10.01, shall also be deemed to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect be notice to such Shareholder for purposes of any matter arising under this Agreement, ; and (iii) the Shareholder Representative may rely on the advice of counsel power and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part authority of the Shareholder Representative, the Shareholder Representative as described in this Agreement, will reimburse the Shareholders the amount continue in force until all rights and obligations of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement will have terminated, expired or been fully performed.
(d) The Company and Shareholder Representative represent to Acquiror that each Shareholder has agreed that, notwithstanding the foregoing, at the request of Acquiror, such time as Shareholder shall take all actions necessary or appropriate to complete the Transactions (including, with respect to such amounts would otherwise be distributable Shareholder, delivery of the shares of Company Common Stock and acceptance of the Merger Consideration therefor) individually on such Shareholder’s own behalf, and to deliver any other documents required of such Shareholder pursuant to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4terms hereof.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Business Combination Agreement (Fintech Ecosystem Development Corp.)
Shareholder Representative. 4.1. By virtue (a) Each of the execution or adoption Shareholders (including each of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and Principal Shareholders) hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as its agent and attorney- in-fact, as the Shareholder Representative (the “"Shareholder Representative”") with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact -------------------------- for and on behalf of all Shareholdersthe Shareholders (and with regard to Claims made against the Shareholders directly, for and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders and with regard to Claims made against the Principal Shareholders directly, for and on behalf of the Principal Shareholders) to give and receive notices and communications, to authorize payment to Parent from the Escrow Fund in accordance herewith shall be given or made satisfaction of claims by the Shareholder Representative Parent, to object to such payments, to agree to, negotiate, enter into settlements and all such actions, noticescompromises of, and determinations by the Shareholder Representative shall conclusively be deemed demand arbitration and comply with orders of courts and awards of arbitrators with respect to have been authorized bysuch claims, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documentsjudgment of either of the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed by the Shareholders or the Principal Shareholders, as the case may be, from time to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed unless holders of a two-thirds (2/3rds) interest of the Escrow Fund or, in the event there are no amounts remaining in the Escrow Fund, by the holders of two-thirds (2/3rds) of the Merger Shares agree to such removal and to prosecutethe identity of the substituted agent. A vacancy in the position of Shareholder Representative may be filled by the holders of a majority in interest of the Escrow Fund or, defend and settle in the event there are no amounts remaining in the Escrow Fund, by the holders of two- thirds of the Merger Shares. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderShareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with whose behalf the Waterfall compared Escrow Amount was contributed to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby Escrow Fund shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s 's duties hereunder hereunder, including the reasonable fees and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that expenses of any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder legal counsel retained by the Shareholder Representative.
4.6. (c) A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit decision, act, consent or instruction of the Shareholder Representative, for including but not limited to an amendment, extension or waiver of this Agreement pursuant to Sections 8.3 and 8.4 hereof, shall constitute a ------------ --- decision of all the Shareholders and shall be final, binding and conclusive upon each of such Shareholders; and the Escrow Agent to hold on behalf and Parent may rely upon any such decision, act, consent or instruction of the Shareholders as a fund for the fees and expenses of all the Shareholder Representative incurred in connection with this Agreement and as being the agreements ancillary hereto (decision, act, consent or instruction of the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at ClosingShareholders. The Shareholders will not receive Escrow Agent and Parent are hereby relieved from any interest or earnings on the Expense Fund and irrevocably transfer and assign liability to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable person for any loss of principal of the Expense Fund other than as a result of its gross negligence acts done by them in accordance with such decision, act, consent or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion instruction of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Lantronix Inc)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) The Shareholder irrevocably approves the constitution and appointment of, and Representative is hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 appointed as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact fact, for and on behalf of all Shareholderseach Indemnifying Party, to give and receive notices and communications related to claims for Losses, to authorize payment to the order of an Indemnified Party from the Escrow Fund in satisfaction of claims by an Indemnified Party, to object to and defend against such claims, to agree to, negotiate, enter into settlements and compromises of, and each comply with orders of them, courts with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2)such claims, the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in judgment of the Shareholder Representative’s discretion all indemnification disputes Representatives for the accomplishment of the foregoing or (including hiring counsel and other litigation assistance and including in court ii) specifically mandated by the terms of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement; provided, the Paying Agent Agreement and the Escrow Agreement. From and after the Closinghowever, the Purchaser shall be entitled to deal exclusively with that the Shareholder Representative in respect of shall have no authority to bind any matter arising under Indemnifying Party to any liability that is not satisfied solely from the Transaction DocumentsEscrow Fund other than liabilities pursuant to section 6.2(a)(v). Such agency may be changed by the Indemnifying Parties from time to time upon not less than thirty (30) days prior written notice to the Surviving Corporation; provided, and the Shareholdershowever, in their relationship with the Purchaser, shall be bound by all actions taken by that the Shareholder Representative in connection with such matters. By virtue may not be removed unless holders of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative a majority-in-interest in the exercise of Escrow Fund agree to such removal; provided that if such removal results in there being no Shareholder Representative, then the power of attorney granted to removal shall not be effective until the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and Shareholders shall survive the death, incapacity or incompetence of each such Shareholder.
4.3have appointed a substituted agent. The A Shareholder Representative may resign at any timetime upon thirty (30) days advance notice to Holdings, the Escrow Agent. Should A vacancy in the position of Shareholder Representative at any time prior to the Survival Date shall be filled promptly by holders of a majority-in-interest in the Escrow Fund. No bond shall be required of the Shareholder Representative, and the Shareholder Representative die, become legally incapacitated shall not receive any compensation for his services. Notices or bankrupt, dissolve, liquidate communications to or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, from the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as shall constitute notice to or from the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder)Indemnifying Parties.
4.4. (b) The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder as representatives of the Indemnifying Parties while acting in its capacity as good faith even though such act or omission constitutes negligence on the part of such Shareholder Representative. The Shareholder Representative may engage attorneys, except accountants and other professionals and experts. The Shareholder Representative may in good faith rely conclusively on information, reports, statements, opinions, including financial statements, about the Company, the Surviving Company or another Person, that were prepared or presented by (i) one or more officers or employees of the Company or Surviving Corporation, or (ii) legal counsel, public accountants, investment bankers or other Persons as to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, matters the Shareholder Representative may rely believes in good faith are within the Person’s knowledge, professional or expert competence. Any action taken by the Shareholder Representative based on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally be deemed conclusively to have been taken in good faith and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate full satisfaction of the duties of such Shareholder Representative’s indemnity coverage from duties. The Indemnifying Parties on whose behalf the Shareholders signing this Agreement or otherwise bound hereby Escrow Amount was contributed to the Escrow Fund shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder, including the Shareholder Representative’s obligations to the Escrow Agent hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that reasonable fees and expenses of any such Representative Loss is finally adjudicated to have been directly caused legal counsel retained by the fraudShareholder Representatives. The Shareholder Representative has only the duties expressly stated in this Agreement and the Escrow Agreement, willful misconductand shall have no other duty, gross negligence express or bad faith on implied. The Shareholder Representative is not a fiduciary of the part Indemnifying Parties. The Shareholder Representative has no responsibility or liability for any representation, warranty or covenant of the Company, the Surviving Company, Holdings or Sub except in his capacity as an Indemnifying Party. THE INDEMNIFYING PARTIES AND THE SHAREHOLDER REPRESENTATIVE INTEND THAT THE SHAREHOLDER REPRESENTATIVE SHALL BE INDEMNIFIED AND HELD HARMLESS BY THE INDEMNIFYING PARTIES FROM AND AGAINST ANY LIABILITY FOR HIS OWN NEGLIGENCE PURSUANT TO THIS SECTION 6.3(b).
(c) A decision, act, consent or instruction from the Shareholder Representative, including an amendment, extension or waiver of this Agreement pursuant to Section 7.3 and Section 7.4 hereof, shall constitute a decision of the Shareholder Representative will reimburse Indemnifying Parties and shall be final, binding and conclusive upon the Shareholders Indemnifying Parties, and the amount of such indemnified Representative Loss to Escrow Agent and the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, Indemnified Party may rely upon any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Funddecision, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholdersact, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered consent or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal instruction of the Shareholder Representative as being the decision, act, consent or instruction of the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5Indemnifying Parties. The Purchaser shall not be liable Escrow Agent and Indemnified Party are hereby relieved from any liability to any Shareholder person for any act acts done by them in accordance with such decision, act, consent or omitted hereunder by instruction of the Shareholder Representative.
4.6. A total of US$100,000 (d) The Shareholder Representative shall be withheld from amounts otherwise payable at Closing have reasonable access to information about the Shareholders contributed by Surviving Company and the Purchaser on behalf reasonable assistance of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent Surviving Company’s officers and employees for the benefit purpose of the Shareholder Representativeperforming its duties and exercising its rights hereunder, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of provided that the Shareholder Representative incurred in connection with this Agreement shall treat confidentially and not disclose any nonpublic information from or about the agreements ancillary hereto Surviving Company to anyone (the “Expense Fund”except on a need to know basis to counsel, witness and experts necessary to perform their duties hereunder who agree to treat such information confidentially). All amounts deposited .
(e) According to the Expense Fund shall be treated for all purposes as having been paid at Closing to terms of the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to Escrow Agreement, the Shareholder Representative any ownership right they may otherwise have had in any such shall be entitled to withhold from interest or earnings. The Shareholder Representative will not earned on the Escrow Fund and from amounts to be liable for any loss of principal distributed from the Escrow Fund to the Indemnifying Parties a portion of the Expense Escrow Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating that is equal to the reasonable estimated expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative as specified in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall a Certificate to be delivered by to the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallAgent.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of (a) Immediately prior to the execution or adoption of this AgreementEffective Time, each Company Shareholder irrevocably approves the constitution and appointment of, and Company Option Holder hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “CMT SR, Inc. as her, his or its Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Representative as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for of such Company Shareholder and/or Company Option Holder with full powers of substitution to act in the name, place and stead of such Company Shareholder and/or Company Option Holder with respect to the performance, and exercise of any rights and obligations, on behalf of all Shareholderssuch Company Shareholder and/or Company Option Holder under the terms and provisions of this Agreement, as the same may be from time to time amended, and each of them, with respect to any and all matters arising out of do or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and refrain from doing all such actions, noticesfurther acts and things, and determinations by to execute all such documents on such Company Shareholder’s and/or Company Option Holder’s behalf, as the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deem necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising transactions contemplated under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from including:
(i) the funds in the Expense Fund, execute and deliver this Agreement (and any amendments hereto),
(ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable take all actions required, or agree upon or compromise any matter related to the Shareholderscalculation of any true-up adjustments described in Section 2.5, and (iii) any other funds that become payable or pursuant to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative terms hereof or other payments to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf made in respect of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder transactions contemplated by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise Merger,
(iii) to do or refrain from doing any act or deed in respect of the exchange procedures contemplated by Section 2.4 or related thereto,
(iv) give and receive notices and communications and receive service of process on behalf of each of the Company Shareholders and Company Option Holders, (v) act on behalf of the Company Shareholders and Company Option Holders with respect to all indemnification matters referred to in this Agreement, including the right to waive rights compromise on behalf of such Company Shareholder and/or Company Option Holder any indemnification claim made by or termination against such Company Shareholder and/or Company Option Holder involving this Agreement, (vi) act for the Company Shareholders and Company Option Holders with respect to all post-Closing matters, including without limitation pursuing any claim for any alleged breach of this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).by Parent,
Appears in 1 contract
Sources: Merger Agreement (Ev3 Inc.)
Shareholder Representative. 4.1. By virtue (a) Each of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints NShareholders agree to appoint ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative for and on behalf of all Shareholderssuch Shareholders to give and receive notices and communications, to authorize payment to any Indemnified Party from the Escrow Fund in satisfaction of claims by any Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to such claims, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any such Shareholder or by any such Shareholder against any Indemnified Party or any dispute between any Indemnified Party and all matters arising out of or any such Shareholder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed by such Shareholders from time to time upon not less than 30 days prior written notice to Purchaser; provided, however, that the Shareholder Representative may not be removed unless holders of a two-thirds interest of the Escrow Fund agree to such removal and to prosecutethe identity of the substituted agent. Notwithstanding the foregoing, defend and settle a vacancy in the position of Shareholder Representative may be filled by the holders of a majority in interest of the Escrow Fund. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderShareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with whose behalf the Waterfall compared Escrow Amount was contributed to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby Escrow Fund shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents Shareholder Representative (collectively, “Shareholder Representative LossesExpenses”). Following the termination of the Escrow Period, in each case as such the resolution of all Unresolved Claims and the satisfaction of all claims made by Indemnified Parties for Losses, the Shareholder Representative Loss is suffered shall have the right to recover Shareholder Representative Expenses from the Escrow Fund prior to any distribution to the Shareholders. A decision, act, consent or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount including an amendment, extension or waiver of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above10.2 and Section 10.3 hereof, shall constitute a decision of the provisions Shareholders and shall be final, binding and conclusive upon the Shareholders; and the Escrow Agent and Purchaser may rely upon any such decision, act, consent or instruction of this Section 4 shall applythe Shareholder Representative as being the decision, mutatis mutandisact, consent or instruction of the Shareholders. The Escrow Agent and Purchaser are hereby relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent or instruction of the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1(a) The parties have agreed that it is desirable to designate ▇.▇. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇▇▇ to serve as the representative of the shareholders of Vianeta (the “"Shareholder Representative”") with all for certain limited purposes as set forth herein. The approval of this Agreement by the rightsshareholders of Vianeta will constitute ratification and approval of such designation. The Shareholder Representative will have such power and authority necessary to carry out the functions assigned to the Shareholder Representative under this Agreement, powers including the power and obligations contemplated by authority:
(i) to enforce, defend and protect the rights and interests of the shareholders of Vianeta following the Closing under Article IX of this Section 4Agreement, and to take any successor and all actions that the Shareholder Representative(s) designated Representative believes are necessary or appropriate under Article IX of this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact Agreement for and on behalf of all Shareholdersthe shareholders of Vianeta, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreementasserting, pursuing or defending any claim by or against Parent or the Payment Agent AgreementSurviving Corporation, share transfer deeds consenting to, compromising or settling any such claim, and endorsements conducting negotiations with Parent or Surviving Corporation; and
(ii) to make, execute, acknowledge and termination instruments and including amendments that may require price reductions or holdbacks); and to grantdeliver all such other agreements, providenotices, negotiate and sign all waivers, consentsrequests, instructions and authorizations other writings, and, in general, to do any and all things and to take any and all other actions called for under or contemplated by or that the Shareholder Representative may otherwise be consider necessary or appropriate proper in connection with carrying out the Transaction Documents; and to prosecute, defend and settle in responsibilities of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court Representative under Article IX of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall .
(b) The Shareholder Representative will be entitled to deal exclusively with engage such counsel, experts and other agents as the Shareholder Representative deems necessary or proper in respect of any matter arising under the Transaction Documentsconnection with performing its obligations hereunder, and will be promptly reimbursed by the Shareholdersshareholders of Vianeta for all reasonable expenses, in their relationship with the Purchaser, shall be bound by all actions taken disbursements and advances incurred by the Shareholder Representative in connection with such matterscapacity upon demand, pro rata based upon each such shareholder's share of Vianeta capital stock as of the Closing. By virtue Each shareholder of executing or adopting this AgreementVianeta shall indemnify and hold harmless the Shareholder Representative, each Shareholder agrees to ratify pro rata based upon such shareholder's share of all Vianeta capital stock as of the Closing, from any and confirm, and hereby ratifies and confirms, any action taken all Damages that are incurred by the Shareholder Representative in as a result of actions taken, or actions not taken, by the exercise Shareholder Representative herein, except to the extent that such Damages arise from the gross negligence or willful misconduct of the power Shareholder Representative.
(c) All amounts received by the Shareholder Representative on behalf of attorney granted the shareholders of Vianeta will be promptly paid by the Shareholder Representative to the shareholders of Vianeta, pro rata based upon such shareholder's share of Vianeta capital stock as of the Closing; provided, however, that the Shareholder Representative will be entitled to set off any amounts payable to the Shareholder Representative under Section 10.13(b) against amounts otherwise payable to shareholders of Vianeta pursuant to this Section 10.13(c).
(d) Holdings, Parent and Surviving Corporation shall have the right to rely upon all actions taken or not taken by the Shareholder Representative pursuant to this Section 4.2Agreement, all of which power actions or omissions shall be legally binding upon the shareholders of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderVianeta.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5e) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a the Shareholder Representative and resigns, dies or becomes incapable of acting, the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt shareholders of a written request delivered by Purchaser to majority of Vianeta common stock and a majority of Vianeta preferred stock as of the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder Closing shall choose another holder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4Agreement.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of (a) In the execution or adoption of event that this AgreementAgreement is adopted by the Company Shareholders, each Shareholder irrevocably approves the constitution and appointment ofeffective upon such vote, and hereby irrevocably constitutes and appoints Nwithout any further action of any Indemnifying Party, ▇▇▇▇ ▇. ▇▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 shall be appointed as the sole, exclusive, true and lawful agent, representative Indemnifying Parties’ agent and attorney-in-fact as the Shareholder Representative for and on behalf of all Shareholdersto give and receive notices and communications, to authorize payment to Parent from the Escrow Fund in satisfaction of claims by Parent, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of themcourts and awards of arbitrators with respect to such claims, to act as proxy for the Indemnifying Parties with respect to any and all matters arising out of shareholder vote or consent with respect to the Parent Common Stock held in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsFund, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court judgment of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect for the accomplishment of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken foregoing or (ii) specifically mandated by the Shareholder Representative in connection with such matters. By virtue terms of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken . Such agency may be changed by the Shareholder Representative in the exercise of the power of attorney granted Indemnifying Parties from time to the Shareholder Representative pursuant time upon not less than fifteen (15) days prior written notice to this Section 4.2Parent; provided, which power of attorneyhowever, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on not be removed unless holders of at least a majority of the advice interest of counsel the Escrow Fund agree to such removal and any action based upon such reliance shall relieve to the identity of the substituted agent. A vacancy in the position of Shareholder Representative may be filled by the holders of any liability hereundera majority in interest of the Escrow Fund. The Shareholders No bond shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate be required of the Shareholder Representative’s indemnity coverage . Notices or communications to or from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold shall constitute notice to or from the Shareholder Representative harmless against any lossIndemnifying Parties. The Indemnifying Parties shall, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and based on their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration Pro Rata Portions of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Escrow Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available responsible for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement Agreement, and the agreements ancillary hereto; provided that Shareholder Representative shall have the right to have any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by reimbursed from the Escrow Agent Fund prior to the Paying Agent for further any distribution to the Shareholders based Indemnified Parties of any amounts in the Escrow Fund, to the extent available.
(b) The Shareholder Representative shall not be liable for any act done or omitted hereunder as Shareholder Representative while acting in good faith, and any act done or omitted to be done pursuant to the advice of legal counsel shall be conclusive evidence of such good faith. The Indemnifying Parties on whose behalf the Escrow Amount was contributed to the Escrow Fund shall indemnify the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability or expense incurred without gross negligence, bad faith or willful misconduct on the Waterfall following part of the completion Shareholder Representative and arising out of or in connection with the acceptance or administration of the Shareholder Representative’s responsibilitiesduties hereunder, including the reasonable fees and expenses of any legal counsel retained by the Shareholder Representative.
(c) A decision, act, consent or instruction of the Shareholder Representative shall constitute a decision of the Indemnifying Parties and shall be final, binding and conclusive upon the Indemnifying Parties; and the Escrow Agent and Parent may rely upon any such decision, act, consent or instruction of the Shareholder Representative as being the decision, act, consent or instruction of the Indemnifying Parties. All amounts remaining The Escrow Agent and Parent are hereby relieved from any liability to any Person for any acts done by them in the Expense Fund upon termination accordance with such decision, act, consent or instruction of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue (a) The Employers written notice delivered to the Employers Shareholders, and the resolutions adopted by the required number of Employers Shareholders to approve the Merger, whether at a special meeting of the execution Employers Shareholders or adoption by written consents signed by the Employers Shareholders, shall state that by voting in favor of this Agreementthe Merger, each Employers Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ the Person designated in the resolutions as attorney-in-fact and agent for and on behalf of the Employers Shareholders, both individually and collectively (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them), with respect the power and authority to any take all actions and make all matters arising out decisions required or permitted by the Shareholder Representative under the terms of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and all other documents, exhibits, and agreements related to such agreements or the Merger, including (i) authorization of the release or delivery to any Eastern Indemnified Person of all or any portion of the Escrow Amount as Holdback in satisfaction of indemnification claims for which such Person is remaining at the end entitled to indemnification under Article VIII; (ii) agreeing to, negotiating, entering into settlements and compromises of, and complying with orders of the escrow period contemplated courts with respect to, any claim for indemnification under Section 2.8Article VIII; (iii) litigation, resolution, settlement or compromise of any claim for indemnification made by any Eastern Indemnified Person pursuant to Article VIII; (iv) receiving all notices on behalf of each Employers Shareholder in accordance connection with the Waterfall and in accordance with the terms and conditions of any claims or matters under this Agreement and or the Escrow Agreement; to negotiate and sign all documents in connection with (v) the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all taking of such other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative determines in respect his judgment are necessary in connection with, or for the effective exercise of, any of any matter arising under the Transaction Documentsforegoing powers and authority. Each Employers Shareholder’s appointment of the Shareholder Representative as provided in this Section 5.16 shall be deemed coupled with an interest surviving the death or disability of such Employers Shareholder to the extent applicable.
(b) Each Employers Shareholder, and by the Shareholders, in their relationship with approval of the PurchaserMerger, shall be bound by all actions taken and documents executed by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirmthe Escrow Agreement, and hereby ratifies all other documents, exhibits and confirmsagreements related to such agreements or the Merger. Eastern, its Affiliates and any Eastern Indemnified Person shall be entitled to rely on any such action or document taken or executed by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderRepresentative.
4.3. The Shareholder Representative may resign at any time. Should (c) As between the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Employers Shareholders:
(i) In exercising the power and authority of the Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to as provided in this Agreement, the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Employers Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, absence of recklessness or willful misconduct, gross negligence or bad faith misconduct on the part of the Shareholder Representative, the .
(ii) The Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss shall be entitled to the extent attributable to such fraudrely, willful misconductand shall be fully protected in relying, gross negligence or bad faith. If not paid directly upon any statements furnished to the Shareholder Representative by the Shareholdersany Employers Shareholder, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) or any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows evidence determined by the Shareholder Representative to be paid from the aforementioned sources of fundsreliable, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent and the Shareholder Representative from seeking any remedies available shall be entitled to it at law or otherwise. In no event will act on the Shareholder Representative be required to advance its own funds on behalf advice of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder counsel selected by the Shareholder Representative.
4.6. A total of US$100,000 (iii) The Shareholder Representative shall be withheld from amounts otherwise payable at Closing fully justified in failing or refusing to take any action under this Agreement, the Escrow Agreement or any other document relating to the Merger unless the Shareholder Representative shall have received such advice or concurrence of such Employers Shareholders contributed as the Shareholder Representative determines appropriate or the Shareholder Representative shall have been expressly indemnified to the Shareholder Representative’s satisfaction by the Purchaser Employers Shareholders severally (based upon their respective Pro Rata Shares), against all liability and expense (including reasonable attorney fees) that the Shareholder Representative may incur by reason of taking or continuing to take any such action.
(iv) The Shareholder Representative shall be entitled to retain professional advisors, including accountants and legal counsel, and to incur such other expenses as the Shareholder Representative determines to be necessary or appropriate in connection with acting as the attorney-in-fact and agent on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Employers Shareholders as a fund for the authorized under Section 5.16(a), and all such professional and other fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and acting in such capacity shall be borne by the agreements ancillary hereto; provided that any portion of Employers Shareholders severally in proportion to their respective Pro Rata Shares.
(v) The Employers Shareholders shall indemnify the Expense Fund not ultimately required for the payment of such fees Shareholder Representative, severally in proportion to their respective Pro Rata Shares, against all losses, liabilities, damages and expenses shall be delivered (including reasonable attorney fees) incurred by the Shareholder Representative in such capacity relating to or arising out of actions or failures to take action pursuant to or in connection with this Agreement, the Escrow Agent Agreement or any other document relating to the Paying Agent for further distribution Merger, except to the Shareholders based on the Waterfall following the completion extent such losses, liabilities, damages and expenses are incurred as a result of the Shareholder Representative’s responsibilitiesrecklessness or willful misconduct.
(vi) Each Person appointed as the Shareholder Representative shall serve in such capacity until the earlier of such Person’s resignation or removal (with or without cause) by Employers Shareholders having more than 50% of the total Pro Rata Shares (the “Majority Employers Shareholders”). All amounts remaining Upon the resignation or removal of a Person as the Shareholder Representative, the Majority Employers Shareholders shall appoint another Person to serve in such capacity. Each Person appointed as a Shareholder Representative shall accept such position in writing.
(d) Prior to the Expense Fund upon termination Effective Time, the Majority Employers Shareholders shall give Eastern written notice of the Person initially appointed as the Shareholder Representative, together with such Person’s notice address, telephone number and telecopy number. Promptly after any change of the Shareholder Representative, the Majority Employers Shareholders shall give Eastern written notice setting forth the name, notice address, telephone number and telecopy number of the new Shareholder Representative. Until notified in writing of such a change, Eastern shall be entitled to assume that the most recent incumbent Shareholder Representative of which Eastern has written notice is the duly authorized Shareholder Representative.
(e) In exercising the Shareholder Representative’s engagement (power and following authority as provided in this Agreement, the completion Shareholder Representative shall not be liable to Eastern or any other Eastern Indemnified Person in the absence of recklessness or willful misconduct on the part of the Shareholder Representative’s responsibilities) ; provided, however, that nothing contained in this Section 5.16 shall also be delivered in any way limit or prejudice the enforcement by Eastern against the Employers Shareholders or the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise Holdback of Eastern’s rights on behalf of the Shareholders prior to Closing pursuant to under this Agreement, including the exercise of the right to waive rights Escrow Agreement or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, any other document relating to the Company (as if it was a Shareholder Representative)Merger, upon and subject to the terms and conditions of each such agreement or document.
Appears in 1 contract
Sources: Merger Agreement (Eastern Insurance Holdings, Inc.)
Shareholder Representative. 4.1. By virtue of (a) Pursuant to the execution or adoption of this AgreementShareholder Representative agreement, each Shareholder irrevocably approves in the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ form attached hereto as Exhibit 9.1(a) (the “Shareholder RepresentativeRepresentative Agreement”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Shareholder Representative shall be named as the agent and representative of all of the Company Shareholders, including without limitation, for purposes of receiving on their behalf all notices under this Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action Paying Agent Agreement, issuing on their behalf of all Shareholders or each of them hereunder or such notices under this Agreement, the Escrow Agreement or and the Paying Agent Agreement. All actions, noticesin each case as the Shareholder Representative shall determine in its sole discretion to issue, communications and determinations by performing such other administrative and other functions under this Agreement, the Escrow Agreement and the Paying Agent Agreement, in each case as may become necessary or desirable.
(b) The Shareholder Representative shall have full power and authority to act for and on behalf of the Company Shareholders and their respective heirs, successors and assigns in accordance herewith shall be given or made by regard to their rights and obligations under this Agreement, the Shareholder Representative Escrow Agreement and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2Paying Agent Agreement. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority is authorized on behalf of the Company Shareholders to: from (i) administer the Post-Closing NWC Adjustment process under Section 2.11; (ii) resolve all claims for indemnification under Article VIII of this Agreement, the Escrow Agreement and after the Closing, direct the Paying Agent Agreement; (iii) retain counsel of its choosing, experts and other professionals as may be necessary or desirable to disburse amounts paid assist in any such matters; and (iv) give such notices to the Escrow Agent under the Escrow Agreement or to the Paying Agent in accordance with under the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Paying Agent Agreement, share transfer deeds in each case as the Shareholder Representative, in its sole and endorsements and termination instruments and including amendments that absolute discretion, may require price reductions or holdbacks); and determine to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4appropriate. The Shareholder Representative shall not be liable have no right to act as agent for service of process for any one of the Company Shareholders, except that any notice delivered to the Shareholder Representative from the Purchaser or the Escrow Agent with respect to the Escrow Agreement, or from the Paying Agent with respect to Paying Agent Agreement, shall be deemed notice to all Company Shareholders for with respect thereto and any notice delivered to the Shareholder Representative with respect to any claim under Article VIII and any other matter under this Agreement after the Closing shall be deemed notice to all Company Shareholders with respect thereto.
(c) The Purchaser shall be named as a third party beneficiary in the Shareholder Representative Agreement. Neither the removal of a then acting Shareholder Representative nor such appointment of a successor Shareholder Representative shall be effective until notice of such act done has been provided to the Purchaser and the delivery to the Purchaser and Escrow Agent of executed counterparts of a writing signed by sufficient number of Company Shareholders necessary to authorize such removal and appointment, together with an acknowledgment signed by the successor Shareholder Representative appointed in such writing that it, he or omitted hereunder in its capacity as she accepts the responsibility of successor Shareholder Representative and agrees to perform and be bound by all of the provisions of this Agreement applicable to the Shareholder Representative, except with a copy of such acknowledgement being promptly provided to the extent caused Purchaser. Each successor Shareholder Representative shall have all of the power, authority, rights and privileges conferred by its willful misconductthis Agreement upon the original Shareholder Representative, gross negligence and the term “Shareholder Representative” as used herein, in the Escrow Agreement and the Paying Agent Agreement shall be deemed to include any interim or bad faith. In successor Shareholder Representative.
(d) The Purchaser will at all questions arising in respect of times without any matter arising under this Agreementfurther act or inquiry have the right to rely on any act, decision, consent or instruction of, or instrument or other writing executed by, the Shareholder Representative may rely as the final and binding act of all of the Company Shareholders, and by approval of the Merger the Company Shareholders waive any claim arising out of, or right to object to, any action so taken by the Purchaser or any of its Representatives or Affiliates. It is understood and agreed by each of the parties hereto that nothing in this Agreement shall be construed or deemed to expand or create any right on the advice part of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each a Company Shareholder’s pro rata share in accordance , with the Waterfall compared respect to the pro rata shares Purchaser or any of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeitureits Affiliates, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith obligation on the part of the Purchaser, or any of its Affiliates, to any Company Shareholder Representativenot otherwise expressly set forth in clear and unambiguous terms in this Agreement (to the extent that there may be any such provisions herein).
(e) Notwithstanding the foregoing provisions of this Section 9.1, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss shall not have any power or authority to the extent attributable to such fraud, willful misconduct, gross negligence act for or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders any Company Shareholder or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation its heirs, successors or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contraryassigns, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable with respect to any claim that a Company Shareholder, in its capacity as such, committed fraud (each, an “Individual Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense FundClaim”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable shall have no right to act as agent for service of process for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Company Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available with respect to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallan Individual Stockholder Claim.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (On Assignment Inc)
Shareholder Representative. 4.1. By virtue of (a) Pursuant to the execution or adoption of this Merger Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power act as the agent of the Shareholders and authority to: from is entitled to give and after receive notices and communications, to authorize delivery by the Closing, direct the Paying Escrow Agent to disburse Parent Group Members of specified amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of from the Escrow Amount as is remaining at the end in satisfaction of the escrow period contemplated under Section 2.8claims by Parent Group Members, in accordance with the Waterfall and to object to such deliveries in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreementto agree to, share transfer deeds negotiate, enter into settlements and endorsements compromises of, and termination instruments demand arbitration and including amendments that may require price reductions or holdbacks); comply with orders of courts and awards of arbitrators with respect to grantsuch claims, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court reasonable judgment of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under for the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise accomplishment of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3foregoing. The Person designated to be Shareholder Representative may resign at any time. Should be changed in accordance with the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve provisions set forth in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder)Merger Agreement.
4.4. (b) The Shareholder Representative shall not be liable to the Shareholders any holder of Company Common Stock for any act done or omitted under the Merger Agreement or hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel while acting in good faith and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part exercise of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholdersreasonable judgment, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by pursuant to the written advice of counsel shall be conclusive evidence of such good faith.
(c) No bond shall be required of the Shareholder Representative.
4.6Representative and the Shareholder Representative shall receive no compensation for his services hereunder. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing At least five (5) days prior to the Shareholders contributed by the Purchaser on behalf first anniversary of the Shareholders Effective Date, the Shareholder Representative shall deliver written notice to the Escrow Agent for an account maintained by and Parent setting forth the Escrow Agent for the benefit payment amount of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and reasonable out-of-pocket expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its connection with his duties under this the Merger Agreement and hereunder (the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and "SHAREHOLDER REPRESENTATIVE'S EXPENSES"), which expenses shall be delivered by reimbursed from the Escrow Amount upon written instruction of Parent and the Shareholder Representative to the extent that any such Shareholder Representative's Expenses together with any other Acquisition Expenses exceed $200,000.
(d) Neither Parent, any Parent Group Member, nor the Escrow Agent to shall be responsible or liable for any actions taken, suffered or omitted by the Paying Agent for further distribution to the Shareholders based Shareholder -10- 13 Representative in connection with such Shareholder Representative's capacity as such, and each of them may conclusively and fully rely on the Waterfall following the completion any action or writing of the Shareholder Representative’s responsibilities.
(e) A decision, act, consent or instruction of the Shareholder Representative shall constitute a decision of all Shareholders and shall be final, binding and conclusive upon each such Shareholder, and the Escrow Agent and Parent may conclusively and fully rely upon any decision, act, consent or instruction of the Shareholder Representative as being the decision, act, consent or instruction of each and every such Shareholder without any further inquiry or investigation. All amounts remaining The Escrow Agent and each Parent Group Member are hereby fully indemnified and relieved from any responsibility or liability to any Person for any actions taken, suffered or omitted by them in the Expense Fund upon termination accordance with such decision, act, consent or instruction of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Indemnification and Escrow Agreement (Harris Corp /De/)
Shareholder Representative. 4.1. By virtue (a) In order to efficiently administer the defense and/or settlement of the execution or adoption of this Agreementany claims for indemnity by an Acquiror Indemnified Party pursuant to Article IX, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, is hereby irrevocably appointed to serve as the sole and exclusive representative of the Shareholders (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the Shareholders’ sole, exclusive, true and lawful agent, representative and attorney-in-fact to act for and on behalf of the Shareholders. The Shareholder Representative shall have full and exclusive power and authority to make all Shareholdersdecisions relating to the defense and/or settlement of any claims for which any Acquiror Indemnified Party may claim to be entitled to indemnity pursuant to Article IX, all decisions and each of themactions relating to any adjustment to the Merger Consideration or any modification of, settlement with respect to or timing of the payment of the Additional Consideration pursuant to Article II, to approve any modifications to the 2010 Plan and all otherwise act on behalf of the Shareholders with respect to matters arising out relating to the conduct of or in connection with this Agreement (excluding the business of the Company during the Earn-Out Period pursuant to Section 10.2)2.3, the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting otherwise to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or act on behalf of the Shareholders in accordance herewith shall be given all respects with respect to this Agreement, including, without limitation, the amendment or made by the Shareholder Representative termination of such agreements. All decisions and all such actions, notices, and determinations actions by the Shareholder Representative shall conclusively be deemed to have been authorized bybinding upon all of the Shareholders, and no Shareholder shall have the right to object to, dissent from, protest or otherwise contest the same. In the event of the death, incapacity or resignation of the Shareholder Representative, the Shareholders holding a majority of the Common Stock (excluding the holders of any Dissenting Shares) immediately prior to the Effective Time (the “Majority Shareholders”) shall promptly appoint a substitute Shareholder Representative which shall be binding uponreasonably acceptable to Acquiror; provided, any and all Shareholders.
4.2. Without limiting the generality of the foregoinghowever, in no event shall the Shareholder Representative resign without the Majority Shareholders having first appointed a substitute Shareholder Representative who shall assume such duties immediately upon the resignation of such Shareholder Representative.
(b) Neither Acquiror, Acquiror Sub nor the Surviving Company shall have full power and authority the right to object to: from and after the Closing, direct the Paying Agent to disburse amounts paid protest or otherwise contest any matter related to the Paying Agent in accordance with procedures for action being taken by the Waterfall and this Agreement, and such portion of Shareholder Representative as between the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement Shareholder Representative and the Escrow Agreement; to negotiate Shareholders. Acquiror, Acquiror Sub and sign all documents in connection with the Transaction and amendments theretoSurviving Company waive any claims they may have or assert, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments those that may require price reductions arise in the future, against the Shareholder Representative or holdbacks); and any of his Affiliates that relate to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (role as such, including hiring counsel and other litigation assistance and including in court of law any claims for any action or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions inaction taken or not taken by the Shareholder Representative in connection herewith.
(c) Each Shareholder that accepts payment of consideration in respect of the Merger as contemplated herein shall be deemed, by such acceptance of payment, or by his, her or its execution of the Letter of Transmittal, as the case may be, to have agreed that (i) the provisions of this Section 10.14 are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies such matters. By virtue of executing or adopting Shareholder may have in connection with the transactions contemplated by this Agreement, (ii) the remedy at law for any breach of the provisions of this Section 10.14 would be inadequate, (iii) such Shareholder shall be entitled to temporary and permanent injunctive relief without the necessity of proving damages if such Shareholder brings an action to enforce the provisions of this Section 10.14 and (iv) the provisions of this Section 10.14 shall be binding upon such Shareholders and the successors and assigns of such Shareholders.
(d) In addition, each Shareholder agrees to ratify that accepts payment of consideration in respect of the Merger as contemplated herein shall be deemed, by such acceptance of payment, or by his, her or its execution of the Letter of Transmittal, as the case may be, to:
(i) have waived any claims he, she or it may have or assert, including those that may arise in the future, against the Shareholder Representative and confirmany of his Affiliates, and hereby ratifies and confirms, for any action or inaction taken or not taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each connection therewith; and
(ii) have accepted such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including obligations with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not such Shareholder’s liability for amounts to be liable reimbursed to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing Acquiror pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)Article IX.
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption approval of the Merger and this AgreementAgreement by the requisite vote of the Shareholders, each Shareholder irrevocably approves of the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Shareholders shall be deemed to have agreed to appoint Magnum Communications Fund L.P. as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative for and on behalf of all Shareholdersthe Shareholders (i) to give and receive notices and communications, to authorize payment to any Indemnified Party directly against the Shareholders in satisfaction of claims by any Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to any such claims, to negotiate, investigate and resolve all matters arising out relating to ARTICLE VIII and ARTICLE IX hereof, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any Shareholder or by any such Shareholder against any Indemnified Party or any dispute between any Indemnified Party and any such Shareholder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices(ii) to agree to, communications negotiate, execute and determinations by or distribute the Earnout Warrants and deliver the Earnout Warrants to the Shareholders as provided therein, to fulfill all of its obligations thereunder and resolve all matters relating thereto, act on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, noticesconnection therewith, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and iii) to take all other actions called for under or contemplated by or that may otherwise be are either (A) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (B) specifically mandated by the terms of this Agreement. Such agency may be changed by the Shareholders from time to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed unless Shareholders holding a majority of Company Shares agree to such removal and to prosecute, defend and settle in the identity of the substituted agent. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderShareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s 's duties hereunder hereunder, including the reasonable fees and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that expenses of any such Representative Loss is finally adjudicated to have been directly caused legal counsel retained by the fraudShareholder Representative ("SHAREHOLDER REPRESENTATIVE EXPENSES"). A decision, willful misconductact, gross negligence consent or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse including but not limited to an amendment, extension or waiver of this Agreement, shall constitute a decision of the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraudand shall be final, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, binding and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to conclusive upon the Shareholders; providedand Parent may rely upon any such decision, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of fundsact, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered consent or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal instruction of the Shareholder Representative as being the decision, act, consent or instruction of the termination of this AgreementShareholders. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on Parent is hereby relieved from any liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder person for any act acts done by it in accordance with such decision, act, consent or omitted hereunder by instruction of the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Scansoft Inc)
Shareholder Representative. 4.1. By virtue (a) Each of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and Shareholders hereby irrevocably constitutes (except as set forth in Section 1.6(b)) authorizes and appoints NP▇▇▇▇ ▇▇▇▇▇▇▇ and any replacement representative appointed pursuant to Section 1.6(b) (the “Shareholder Representative”) ), with all the rightsfull power of substitution and resubstitution, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, such Shareholder’s representative and attorney-in-fact and agent to act for and on behalf of all Shareholders, and each of them, such Shareholder with respect to any and all matters arising out in connection with this Agreement, including the power and authority, exercisable in the sole discretion of the Shareholder Representative, to (i) take any action contemplated to or that may be taken by the Shareholders under this Agreement, including pursuant to Article VIII, or any other Operative Document; (ii) negotiate, determine, defend and settle any disputes that may arise under or in connection with this Agreement (excluding Agreement, including with respect to the final determination of payments to be made pursuant to Section 10.2)1.2.3 and any Indemnification Claim pursuant to Article VIII, the Paying Agent Agreementor any other Operative Document; and (iii) make, the Escrow Agreement execute, acknowledge and the agreements ancillary hereto following the Closing and taking deliver any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsconsents, releases, assurances, receipts, requests, instructions, notices, communications agreements, certificates and determinations any other documents or instruments, and generally do any and all things and take any and all actions that may be requisite, proper or advisable in connection with this Agreement, including pursuant to Article VIII, or any other Operative Document.
(b) The Shareholder Representative may be removed by or on behalf written agreement among Buyer and a majority in interest of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed calculated with reference to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representativeeach Shareholder’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3Pro Rata Share. The Shareholder Representative may resign at any time. Should the Shareholder Representative dietime upon giving 60 days’ prior written notice of such resignation to Buyer, become legally incapacitated or bankruptEscrow Agent and each Shareholder, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis but shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of exercise all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities powers enumerated in Section 1.6(a) until the effective date of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faithsuch resignation. In all questions arising in respect the event of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement removal or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeitureresignation, or expense (including upon the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), death or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part disability of the Shareholder Representative, the Shareholder Representative will reimburse Buyer and a majority in interest of the Shareholders the amount of calculated with reference to each Shareholder’s Pro Rata Share shall agree within 30 days after such indemnified Representative Loss removal, resignation, death or disability upon a replacement Shareholder Representative. Any Survival Period set forth in Section 8.1 and any period in which any Buyer Indemnified Party is required to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly provide notice to the Shareholder Representative with respect to any Indemnification Claim or action to be taken in connection with this Agreement shall be deemed to be extended by the Shareholders, any such Representative Losses may be recovered by number of days that elapses between the Shareholder Representative from Representative’s resignation, death or disability and the appointment of a replacement Shareholder Representative.
(ic) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the The Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done action taken or omitted by him hereunder by or under any other Operative Document or other document or instrument executed or delivered hereunder, or in connection therewith, except that the Shareholder Representative.
4.6Representative shall not be relieved of any liability imposed by Law for willful misconduct or gross negligence. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf Each of the Shareholders acknowledges and agrees that, with respect to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder RepresentativeShareholders, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement shall not be obligated to take any actions and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes entitled to take such actions as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had deems appropriate in any such interest or earnings. The Shareholder Representative’s sole discretion, and the Shareholders, jointly and severally, shall indemnify and hold harmless the Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably Losses incurred by the Shareholder Representative in performing its connection with the performance of his duties hereunder or under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent other Operative Document or in any way relating to him in his capacity as Shareholder Representative hereunder or under any other Operative Document, except to the Paying Agent for further distribution to extent that such Losses are the Shareholders based on the Waterfall following the completion direct result of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of willful misconduct or gross negligence.
(d) Each Shareholder agrees that Buyer shall be entitled to rely on any action taken by the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights Representative on behalf of the Shareholders prior pursuant to Closing Section 1.6(a) above (each, an “Authorized Action”), and that each Authorized Action shall be binding on each such Shareholder as fully as if such Person had taken such Authorized Action. Each Shareholder acknowledges and agrees that any payment made by Buyer on behalf of such Shareholder to the Shareholder Representative pursuant to this Agreement, including the exercise Agreement shall constitute full and complete payment to such Shareholder and Buyer shall have no further liability therefor. No Shareholder shall bring any Claim against Buyer as a result of any actions or inactions of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) Each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes designates and appoints N(and each permitted Transferee of each such Shareholder is hereby deemed to have so designated and appointed) ▇▇▇▇▇▇ ▇. ▇▇▇▇ (the “Shareholder Representative”) with all the rights), powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and its attorney-in-fact for with full power of substitution, to serve as the representative of such Shareholder to perform all such acts as are required, authorized or contemplated by this Agreement to be performed by such Shareholder (including the voting of the Subject Shares in accordance with Sections 1(a) and on behalf of all Shareholders1(b)), and hereby acknowledges that the Shareholder Representative shall be authorized to take any action so required, authorized or contemplated by this Agreement. Each such Shareholder further acknowledges that the foregoing appointment and designation shall be deemed to be coupled with an interest. Each such Shareholder hereby authorizes (and each such Permitted Transferee of them, with respect such Shareholder shall be deemed to have authorized) the other parties hereto to disregard any and all matters arising out of notices or in connection with this Agreement (excluding other action taken by such Shareholder pursuant to Section 10.2), the Paying Agent this Agreement, except for notices and actions taken by the Escrow Agreement Shareholder Representative. The Purchaser is and the agreements ancillary hereto following the Closing and taking will be entitled to rely on any action so taken or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be any notice given or made by the Shareholder Representative and all such actions, notices, is and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall will be entitled and authorized to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted give notices only to the Shareholder Representative pursuant for any notice contemplated by this Agreement to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each be given to any such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her A successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice be chosen by a majority in interest of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows notice thereof is given by the new Shareholder Representative to the Purchaser.
(b) Notwithstanding the generality of Section 6(a), each Shareholder hereby constitutes and appoints the Shareholder Representative, with full power of substitution, as the proxy pursuant to the provisions of Section 705 of the California Corporations Code and attorney of such Shareholder, and hereby authorizes and empowers the Shareholder Representative to be paid from represent, vote and otherwise act (by voting at any meeting of the aforementioned sources shareholders of fundsthe Company, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law by written consent in lieu thereof or otherwise. In no event will ) with respect to the Subject Shares owned or held by such Shareholder Representative be required regarding the matters referred to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge in Sections 1(a), 1(b) and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or 1(c) until the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (same extent and with the same effect as if it was a such Shareholder Representativemight or could do under applicable law, rules and regulations. The proxy granted pursuant to the immediately preceding sentence is coupled with an interest and shall be irrevocable. Each Shareholder hereby revokes any and all previous proxies or powers of attorney granted with respect to any of the Subject Shares owned or held by such Shareholder regarding the matters referred to in Sections 1(a) and 1(b).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue Effective automatically upon the approval of the execution or adoption Merger and the other Transactions by the Company Shareholders, and without further act of this Agreementany Company Shareholder, each Company Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints Nshall be deemed to have appointed ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact of such Company Shareholder (except such Company Shareholders, if any, that have perfected their dissenters’ rights under Alabama law), with full power and authority, including power of substitution, acting in the name of and for and on behalf of such Company Shareholder and to, in his sole discretion: (a) enter into and amend or waive any provision of this Agreement; (b) terminate this Agreement pursuant to the provisions of Article 9; (c) do all other things and take all other action under or related to this Agreement which he may consider necessary or proper to effectuate the Merger and the other Transactions; (d) resolve any dispute with Parent, Purchaser or the Surviving Corporation over any aspect of this Agreement or any instrument or document delivered hereunder; (e) execute and take any actions under the Escrow Agreement; (f) give and receive notices and communications; (g) authorize delivery to Parent of cash from the Escrow Fund in satisfaction of claims by Parent and the Escrow Agent; (h) object to such deliveries; (i) agree to, negotiate, enter into settlements and compromises of, and demand litigation or arbitration and comply with orders and awards of courts and arbitrators in respect of such claims; (j) on behalf of such Company Shareholder to enter into any agreement to effectuate any of the foregoing items (a)–(i) which shall have the effect of binding such Company Shareholder as if such Company Shareholder had personally entered into such agreement(s), taken such actions or refrained from taking such actions described in Sections (a)-(i) above; and (k) take all other actions necessary or appropriate in the judgment of the Shareholder Representative for the accomplishment of the foregoing. Notwithstanding the foregoing, all actions taken or decisions made by the Shareholder Representative on behalf of the Company Shareholders shall be taken or made in a manner which is ratable and equitable among all Company Shareholders. This appointment and power of attorney shall be deemed an agency coupled with an interest and all authority conferred hereby shall be irrevocable and shall not be subject to termination by operation of law, whether by the death or incapacity or liquidation or dissolution of any Company Shareholder or the occurrence of any other event or events and any action taken by the Shareholder Representative pursuant to this Section 2.13 shall be as valid as if any such death, incapacity, liquidation, dissolution or other event had not occurred, regardless or whether or not the Shareholder Representative, the Company, Parent or Purchaser shall have received notice of any such death, incapacity, liquidation, dissolution or other event. The Shareholder Representative may not terminate this power of attorney with respect to any Company Shareholder or such successors or assigns without the consent of Parent. Effective automatically upon approval of the Merger and the other Transactions by the Company Shareholders, and without further act of any Company Shareholders, each Company Shareholder agrees to hold the Shareholder Representative harmless and indemnify the Shareholder Representative, severally (and not jointly) in accordance with the amount of themMerger Consideration received by such indemnifying Company Shareholder, with respect to any and all matters arising out of loss, damage or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement liability and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes expenses (including hiring counsel and other litigation assistance and including in court legal fees) which such Company Shareholder may sustain as a result of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad good faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in In the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for death, physical or mental incapacity or resignation of the payment of all fees and expenses reasonably incurred by the initial Shareholder Representative in performing its duties under this Agreement and or any successor, the agreements ancillary hereto; provided that any portion Company Shareholders shall, by a vote of the Expense Fund not ultimately required for Company Shareholders who held at least a majority of the payment outstanding shares of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based Company Common Stock on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining Execution Date, promptly appoint a substitute and shall in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallwriting advise Parent thereof.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Agreement and Plan of Merger (Tier Technologies Inc)
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of approving this Agreement and the Escrow Agreement; transactions contemplated hereby or by executing and delivering a Letter of Transmittal, and by the consummation of the Merger or participating in the Merger and receiving the benefits thereof, including the right to negotiate and sign all documents receive the consideration payable in connection with the Transaction Merger, each Shareholder shall have irrevocably authorized and amendments theretoappointed Shareholder Representative as of the Closing as such Person’s representative, whether before or after Closing (including, without limitation, Escrow agent and attorney in fact to act on behalf of such Person with respect to this Agreement, the Payment Agent Agreement, share transfer deeds Promissory Note and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations any other agreements ancillary hereto and to take any and all other actions called for under and make any decisions required or contemplated permitted to be taken by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and Representative pursuant to this Agreement, the Paying Agent Promissory Note or such other ancillary agreements, including the exercise of the power to:
(i) give and receive notices and communications;
(ii) agree to, negotiate, enter into settlements and compromises of, and comply with orders or otherwise handle any other matters described in Section 2.16;
(iii) agree to, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to claims for indemnification made by Parent pursuant to Article VI and Article VIII;
(iv) litigate, arbitrate, resolve, settle or compromise any claim for indemnification pursuant to Article VI and Article VIII;
(v) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement and any Ancillary Document (including the Escrow AgreementPromissory Note);
(vi) make all elections or decisions contemplated by this Agreement and any Ancillary Document (including the Promissory Note);
(vii) engage, employ or appoint any agents or representatives (including attorneys, accountants and consultants) to assist Shareholder Representative in complying with its duties and obligations; and
(viii) take all actions necessary or appropriate in the good faith judgment of Shareholder Representative for the accomplishment of the foregoing. From and after After the Closing, the Purchaser Parent shall be entitled to deal exclusively with the Shareholder Representative in on all matters relating to this Agreement (including Article VIII) (except with respect to any payments required to be made by the Shareholders directly) and shall be entitled to rely conclusively (without further evidence of any matter arising under the Transaction Documentskind whatsoever) on any document executed or purported to be executed on behalf of any Shareholder by Shareholder Representative, and on any other action taken or purported to be taken on behalf of any Shareholder by Shareholder Representative, as being fully binding upon such Person. After the Closing notices or communications to or from Shareholder Representative shall constitute notice to or from each of the Shareholders. Any decision or action by Shareholder Representative hereunder, in their relationship with including any agreement between Shareholder Representative and Parent relating to the Purchaserdefense, payment or settlement of any claims for indemnification hereunder, shall constitute a decision or action of all Shareholders and shall be bound by all actions taken by final, binding and conclusive upon each such Person. No Shareholder shall have the Shareholder Representative in connection with such mattersright to object to, dissent from, protest or otherwise contest the same. By virtue The provisions of executing or adopting this AgreementSection, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of including the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2hereby, which power of attorneyare independent and severable, being are irrevocable and coupled with an interest, is irrevocable interest and shall survive the deathnot be terminated by any act of any one or Shareholders, incapacity or incompetence by operation of each such ShareholderLaw, whether by death or other event.
4.3. (b) The Shareholder Representative may resign at any time. Should and the Shareholder Representative die, become legally incapacitated may be removed for any reason or bankrupt, dissolve, liquidate no reason by the vote or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve written consent of a majority in his or her stead, interest of the Shareholders according to each Shareholder’s Pro Rata Share (the “Majority Holders”); provided, however, in no event shall Shareholder Representative be removed without the Majority Holders having first appointed a new Shareholder Representative who have held, shall assume such duties immediately prior to upon the Closing, removal of Shareholder Representative. In the majority event of the voting power death, incapacity, resignation or removal of Shareholder Representative, a new Shareholder Representative shall be appointed by the vote or written consent of the Company Majority Holders. Notice of such vote or a copy of the written consent appointing such new Shareholder Representative shall be sent to Parent, such appointment to be effective upon the later of the date indicated in such consent or the date such notice is received by Parent; provided, that until such notice is received, Parent, Merger Sub and the Surviving Corporation shall be entitled to rely on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable decisions and actions of the prior Shareholder Representative as the successor described in Section 10.1(a) above.
(c) The Shareholder Representative hereunder. If at will incur no liability of any time there shall not be a Shareholder Representative kind with respect to any action or omission by it in connection with its services pursuant to this Agreement and any agreements ancillary hereto, except in the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt event of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all liability directly resulting from the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential gross negligence or contingent liabilities of the Shareholders hereunder).
4.4willful misconduct. The Shareholder Representative shall not be liable to the Shareholders for any act done action or omitted hereunder in its capacity as the Shareholder Representative, except omission pursuant to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereundercounsel. The Shareholders shall severally indemnify, defend and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend hold harmless the Shareholder Representative from and hold the Shareholder Representative harmless against any lossand all losses, liabilityliabilities, deficiencydamages, damageclaims, costpenalties, claimfines, penaltyforfeitures, fineactions, forfeiturefees, or expense costs and expenses (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment)) (collectively, or actions incurred by the Shareholder “Representative and Losses”) arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder execution and under the Transaction Documents (collectively, “Representative Losses”)performance of this Agreement and any agreements ancillary hereto, in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part willful misconduct of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faithwillful misconduct. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, Escrow Amount and (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding Notwithstanding anything in this Agreement to the contrary, the any restrictions or limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5section. The Purchaser shall not be liable to any Shareholder for any act done foregoing indemnities will survive the Closing, the resignation or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses removal of the Shareholder Representative incurred in connection with or the termination of this Agreement.
(d) The Expense Escrow Amount will be used for the purposes of paying directly, or reimbursing the Shareholder Representative for, any third party expenses pursuant to this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closinghereto. The Shareholders will not receive any interest or earnings on the Expense Fund Escrow Amount and irrevocably transfer and assign to the Shareholder Representative any ownership right that they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund Escrow Amount other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall As soon as practicable following the completion of the Shareholder Representative’s responsibilities. All amounts , the Shareholder Representative will deliver any remaining in balance of the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by Escrow Amount to the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on Shareholders. For tax purposes, the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of Expense Escrow Amount will be treated as having been received and voluntarily set aside by the Shareholders prior to Closing pursuant to this Agreement, including at the exercise time of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)Closing.
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) The Shareholder irrevocably approves the constitution Representative shall be constituted and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 appointed as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement Seller and the agreements ancillary hereto following the Closing Shareholders and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power authority to represent, to give and authority to: from receive notices and after communications, to authorize the Closing, direct the Paying Escrow Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such release any portion of the Indemnity Escrow Amount to Buyer in satisfaction of claims by Buyer or the Performance Escrow Amount as is remaining at provided hereunder, to object to such deliveries, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such claims, to act on the end of Seller’s and the escrow period contemplated under Section 2.8Shareholders’ behalf with respect to the matters set forth herein, in accordance with the Waterfall and in accordance with the terms and conditions provisions set forth herein, including giving and receiving all notices and communications to be given or received with respect to the matters set forth in Section 2.8 and Section 10 and to take all actions necessary or appropriate in the judgment of the Shareholder Representative for the interpretation of this Agreement and accomplishment of the foregoing. Such agency may be changed by the holders of a majority in interest of the Escrow Agreement; Amount from time to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing time upon not less than ten (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and 10) days’ prior written notice to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise Buyer. No bond shall be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law . Notices or any other legal proceeding) and communications to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with or from the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing constitute notice to or adopting this Agreement, from each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder)and the Seller.
4.4. (b) The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the exercise of reasonable judgment and any act done or omitted pursuant to the advice of counsel and any action based upon shall be conclusive evidence of such reliance shall relieve the Shareholder Representative of any liability hereundergood faith. The Seller and Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of his, her or its duties hereunder.
(c) The Shareholder Representative shall have reasonable access to information about Company and the reasonable assistance of Company’s officers and employees for purposes of performing its duties and exercising its rights hereunder, provided that the Shareholder Representative shall treat confidentially and not disclose any nonpublic information from or about Company to anyone (except on a need to know basis to individuals who agree to treat such information confidentially).
(d) Buyer acknowledges that the Shareholder Representative may have a conflict of interest with respect to its duties as Shareholder Representative, and in such regard the Shareholder Representative has informed Buyer that it will act in the best interests of the Seller and the Shareholders.
(e) A decision, act, consent or instruction of the Shareholder Representative shall constitute a decision of the Seller and all Shareholders for whom the Purchase Consideration otherwise payable to them is released to Buyer from the Indemnity Escrow Account or the Performance Escrow Account with respect to the matters set forth herein and shall be final, binding and conclusive upon the Seller and each Shareholder, and Buyer may rely upon any decision, act, consent or instruction of the Shareholder Representative as being the decision, act, consent or instruction of the Seller and each and every Shareholder. Buyer is hereby relieved from any liability to any Person for any acts done by them in accordance with such decision, act, consent or instruction of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Membership Interest Purchase Agreement (Rocket Lab USA, Inc.)
Shareholder Representative. 4.1. (a) By virtue approving this Agreement and the transactions contemplated hereby or by executing and delivering a Letter of the execution or adoption of this AgreementTransmittal, each Shareholder shall have irrevocably approves the constitution authorized and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “appointed Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Representative as the sole, exclusive, true and lawful agent, such Person’s representative and attorney-in-fact for and to act on behalf of all Shareholders, and each of them, such Person with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; Agreement and to negotiate take any and sign all documents in connection with actions and make any decisions required or permitted to be taken by Shareholder Representative pursuant to this Agreement or the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, including the Payment Agent exercise of the power to:
(i) give and receive notices and communications;
(ii) authorize delivery to Parent of cash from the Purchase Price Adjustment Escrow Fund (or, if necessary, the Indemnification Escrow Fund) in satisfaction of any amounts owed to Parent pursuant to Section 2.12(f) or from the Indemnification Escrow Fund in satisfaction of claims for indemnification made by Parent pursuant to Article VIII;
(iii) agree to, negotiate, enter into settlements and compromises of, and comply with orders or otherwise handle any other matters described in Section 2.12(f);
(iv) agree to, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to claims for indemnification made by Parent pursuant to Article VIII;
(v) litigate, arbitrate, resolve, settle or compromise any claim for indemnification pursuant to Article VIII;
(vi) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement and any Ancillary Document (including the Escrow Agreement);
(vii) make all elections or decisions contemplated by this Agreement and any Ancillary Document (including the Escrow Agreement);
(viii) engage, share transfer deeds employ or appoint any agents or representatives (including attorneys, accountants and endorsements consultants) to assist Shareholder Representative in complying with its duties and termination instruments and including amendments that may require price reductions or holdbacks)obligations; and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to and
(ix) take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in good faith judgment of Shareholder Representative for the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court accomplishment of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreementforegoing. From and after the Closing, the Purchaser Parent shall be entitled to deal exclusively with the Shareholder Representative in respect on all matters relating to this Agreement (including Article VIII) and shall be entitled to rely conclusively (without further evidence of any matter arising under the Transaction Documentskind whatsoever) on any document executed or purported to be executed on behalf of any Shareholder by Shareholder Representative, and on any other action taken or purported to be taken on behalf of any Shareholder by Shareholder Representative, as being fully binding upon such Person. Notices or communications to or from Shareholder Representative shall constitute notice to or from each of the Shareholders. Any decision or action by Shareholder Representative hereunder, in their relationship with including any agreement between Shareholder Representative and Parent relating to the Purchaserdefense, payment or settlement of any claims for indemnification hereunder, shall constitute a decision or action of all Shareholders and shall be bound by all actions taken by final, binding and conclusive upon each such Person. No Shareholder shall have the Shareholder Representative in connection with such mattersright to object to, dissent from, protest or otherwise contest the same. By virtue The provisions of executing or adopting this AgreementSection, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of including the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2hereby, which power of attorneyare independent and severable, being are irrevocable and coupled with an interest, is irrevocable interest and shall survive the deathnot be terminated by any act of any one or more Shareholders, incapacity or incompetence by operation of each such ShareholderLaw.
4.3. (b) The Shareholder Representative may resign at any time. Should , and may be removed for any reason or no reason by the vote or written consent of a majority in interest of the Shareholders according to each Shareholder’s Pro Rata Share (the “Majority Holders”); provided, however, in no event shall Shareholder Representative die, become legally incapacitated resign or bankrupt, dissolve, liquidate be removed without the Majority Holders having first appointed a new Shareholder Representative who shall assume such duties immediately upon the resignation or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, removal of Shareholder Representative. In the Shareholders who have held, immediately prior to the Closing, the majority event of the voting power death, incapacity, resignation or removal of Shareholder Representative, a new Shareholder Representative shall be appointed by the vote or written consent of the Company Majority Holders. Notice of such vote or a copy of the written consent appointing such new Shareholder Representative shall be sent to Parent, such appointment to be effective upon the later of the date indicated in such consent or the date such notice is received by Parent; provided, that until such notice is received, Parent, Merger Sub and the Surviving Corporation shall be entitled to rely on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable decisions and actions of the prior Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate described in writing a successor Shareholder Representative within five (5Section 9.01(a) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder)above.
4.4. (c) The Shareholder Representative shall not be liable to the Shareholders for actions taken pursuant to this Agreement or the Escrow Agreement, except to the extent such actions shall have been determined by a court of competent jurisdiction to have constituted gross negligence or involved fraud, intentional misconduct or bad faith (it being understood that any act done or omitted hereunder in its capacity as the Shareholder Representative, except pursuant to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel counsel, accountants and any action based upon such reliance shall relieve the other professionals and experts retained by Shareholder Representative shall be conclusive evidence of any liability hereundergood faith). The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided thattheir Pro Rata Shares), for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the hold harmless Shareholder Representative from and hold the Shareholder Representative harmless against against, compensate it for, reimburse it for and pay any lossand all losses, liabilityliabilities, deficiencyclaims, damageactions, costdamages and expenses, claim, penalty, fine, forfeiture, or expense (including the reasonable attorneys’ fees and expenses of counsel and experts and their staffs and all expense of document locationdisbursements, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or and in connection with its activities as Shareholder Representative under this Agreement and the acceptance, performance or administration of Escrow Agreement (the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss it is finally adjudicated to have been directly that a Representative Loss or any portion thereof was primarily caused by the gross negligence, fraud, willful misconduct, gross negligence intentional misconduct or bad faith on the part of the Shareholder Representative, the Shareholder Representative will shall reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, fraud, willful misconduct, gross negligence intentional misconduct or bad faith. If not paid directly to The Representative Losses shall be satisfied: (i) from the Shareholder Representative by Expense Fund; and (ii) to the extent the amount of the Representative Losses exceeds amounts available to Shareholder Representative under (i), from the Shareholders, any such Representative Losses may be recovered by severally and not jointly (in accordance with their Pro Rata Shares). As soon as practicable after the date on which the final obligation of Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of Escrow Agreement have been discharged or such fees and expenses shall be delivered by other date as Shareholder Representative deems appropriate, the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All shall pay any amounts remaining in the Expense Shareholder Representative Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on in accordance with their Pro Rata Shares, as set forth in the WaterfallEscrow Agreement.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Northwest Pipe Co)
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N(A) ▇▇▇ ▇▇▇▇▇ van der Hooning shall be constituted and appointed as agent (the “Shareholder Representative”"SHAREHOLDER REPRESENTATIVE") with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholdersthe Company shareholders (pursuant to the Instrument of Release, Consent and Appointment of Shareholder Representative) to be signed by each such shareholder as contemplated by Section 6.5(b) hereof) to give and receive notices and communications, to agree to, negotiate, and each of thementer into, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsshareholders, noticesamendments, communications consents and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities waivers under this Agreement (including with respect Section 5.2 hereof) and the Escrow Agreement, to potential or contingent liabilities enter into and administer, on behalf of the Shareholders hereunder)Company shareholders, the Escrow Agreement, to authorize delivery to Parent of the Parent Common Stock or other property from the Escrow Fund in accordance with the Escrow Agreement, and to take all actions necessary or appropriate in the judgment of the Shareholder Representative for the accomplishment of the foregoing. Such agency may be changed by the holders of a majority in interest of the Company shareholders from time to time upon not less than 10 days' prior written notice to Parent. No bond shall be required of the Shareholder Representative, and the Shareholder Representative shall receive no compensation for his services. Notices or communications to or from the Shareholder Representative shall constitute notice to or from each of the Company shareholders.
4.4. (B) The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity or under the Escrow Agreement as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the exercise of reasonable judgment, and any act done or omitted pursuant to the advice of counsel and any action based upon shall be conclusive evidence of such reliance shall relieve the Shareholder Representative of any liability hereundergood faith. The Shareholders Company shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative him harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of his duties hereunder.
(C) The Shareholder Representative shall have reasonable access to information about the Shareholder Representative’s duties hereunder Company and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part reasonable assistance of the Shareholder RepresentativeCompany's and Parent's officers and employees for purposes of performing its duties and exercising its rights hereunder, provided that the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence shall treat confidentially and not disclose any nonpublic information from or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for about the Company or Parent to exercise rights anyone (except on behalf of the Shareholders prior a need to Closing pursuant know basis to this Agreement, including the exercise of the right individuals who agree to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representativetreat such information confidentially).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement(A) The Shareholders irrevocably make, each Shareholder irrevocably approves the constitution constitute and appointment of, and hereby irrevocably constitutes and appoints Nappoint ▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as their agent (the “"Shareholder Representative”") with all and authorize and empower him to fulfill the rightsrole of Shareholder Representative hereunder for a period of seven (7) years after the Closing Date. If a Shareholder Representative should resign, powers and obligations contemplated die or become incapacitated, its or his successor shall be appointed within 30 days of his resignation, death or incapacity by this Section 4a majority of the Shareholders, and such successor either shall be a Shareholder or shall otherwise be acceptable to the Buyer. The choice of a successor Shareholder Representative appointed in any manner permitted above shall be final and binding upon all of the Shareholders. The decisions and actions of any successor Shareholder Representative(sRepresentative shall be, for all purposes, those of a Shareholder Representative as if originally named herein.
(B) designated under Each Shareholder has made, constituted and appointed and by the execution of this Section 4 Agreement hereby irrevocably makes, constitutes and appoints the Shareholder Representative as the sole, exclusive, such person's true and lawful attorney in fact and agent, representative for such person and attorney-in-fact in such person's name, (1) to receive all Claim Notices and all other notices and communications directed to such Shareholder under this Agreement and to take any action (or to determine to take no action) with respect thereto as he may deem appropriate as effectively as such Shareholder could act for himself or herself, including without limitation, the settlement or compromise of any dispute or controversy, (2) to execute and on behalf deliver all instruments and documents of all Shareholdersevery kind incident to the foregoing, including, but not limited to, the certificates identified in Section 9.4 hereof, and (3) to represent each of them, with respect to such Shareholder's interests in any and all matters arbitration or other judicial or extrajudicial proceeding arising out of or in connection with this Agreement (excluding Agreement, to all intents and purposes and with the same effect as such Shareholder could do personally, and each such Shareholder hereby ratifies and confirms as his or her own act, all that the Shareholder Representative shall do or cause to be done pursuant to Section 10.2), the Paying Agent Agreement, provisions hereof. Each Shareholder hereby declares that the Escrow Agreement foregoing powers are coupled with an interest and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreementshall be irrevocable. All actions, notices, Claim Notices and all other notices and communications and determinations by or on behalf of the directed to Shareholders in accordance herewith under this Agreement shall be given to the Shareholder Representative.
(C) The death or made by incapacity of any Shareholder shall not terminate the authority and agency of the Shareholder Representative.
(D) The Shareholders hereby agree to indemnify the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before hold it or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative him harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without grossly negligent conduct or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s his duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, including the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees costs and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the such Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that defending against any portion claim of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining liability in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallconnection herewith.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of 11.7.1 At the execution or adoption of this AgreementClosing, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (shall be constituted and appointed as the “Shareholder Representative”) with all . The Shareholder Representative shall be the rightsexclusive representative, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative agent and attorney-in-fact for and on behalf of all Shareholdersthe Sellers to: (i) give and receive notices, instructions and each of themcommunications permitted or required under this Agreement, with respect to or any and all matters arising out of other agreement, document or instrument entered into or executed in connection with this Agreement (excluding pursuant to Section 10.2)the Transactions, the Paying Agent Agreement, the Escrow Agreement for and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders any Seller, to or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or from Buyer (on behalf of itself or any other Seller) relating to this Agreement or any of the Shareholders in accordance herewith Transactions and any other 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 made received by a Seller individually), (ii) review, negotiate and agree to and authorize Buyer to reclaim an amount from the Aggregate Holdback Amount and Escrow Amount in satisfaction of claims asserted by Buyer (on behalf of itself or any other Buyer Indemnified Party, including by not objecting to such claims) pursuant to Sections 4, 9 and 10, (iii) object to such claims pursuant to Section 10, (iv) 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 the Transactions by arbitration, settlement or otherwise, and take or forego any or all actions permitted or required of any Indemnifying Shareholder or necessary in the judgment of the Shareholder Representative for the accomplishment of the foregoing and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoingother terms, the Shareholder Representative shall have full power conditions and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and limitations of this Agreement, (v) consult with legal counsel, independent public accountants and such portion other experts selected by it, solely at the cost and expense of the Escrow Amount as is remaining at Indemnifying Shareholders, (vi) consent or agree to, including the end of the escrow period contemplated under Section 2.8execution and delivery of, in accordance with the Waterfall and in accordance with the any amendment to this Agreement or to waive any terms and conditions of this Agreement and providing rights or benefits to the Escrow Agreement; to negotiate and sign all documents Sellers in connection accordance with the Transaction terms hereof and amendments theretoin the manner provided herein, whether before (vii) pursuant to Section 2 and 3, review, negotiate, object to, accept or after Closing agree to Buyer’s calculation of Purchase Price (including, without limitation, Escrow Agreement, the including any portion thereof such as an Earn-out Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacksany Purchase Price Adjustment); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to (viii) take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in judgment of the Shareholder Representative’s discretion all indemnification disputes Representative for the accomplishment of the foregoing, in each case without having to seek or obtain the consent of any Person under any circumstance. Zenvia and its Affiliates (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser Companies) shall be entitled to deal exclusively with rely on the appointment of ▇▇▇▇▇▇ as initial the Shareholder Representative and treat such Shareholder Representative as the duly appointed attorney-in-fact of each Seller and as having the duties, power and authority provided for in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, this Section 11.8. The Sellers shall be bound by all actions taken and documents executed by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirmSection 11.8, and hereby ratifies Buyer and confirms, other Buyer Indemnified Parties shall be entitled to rely exclusively on any action taken by or decision of the Shareholder Representative. The Person serving as the Shareholder Representative in may resign, or be removed or replaced at any time by the exercise Seller’s holding more than fifty percent (50%) of the power Seller Pro-Rata Share as of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the effective time of the Closing, the majority of the voting power of the Company on an provided that if such Person resigns from its position as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative, then a successor may be appointed, by the Seller’s responsibilities under this Agreement holding more than fifty percent (including with respect to potential or contingent liabilities 50%) of the Shareholders hereunder)Seller Pro-Rata Share as of immediately prior to the effective time of the Closing, upon not less than 10 days’ prior written notice to Buyer.
4.4. 11.7.2 The Shareholder Representative shall not be liable to the Shareholders any Seller for any act done or omitted hereunder in its capacity as the Shareholder Representative, except Representative while acting in good faith (and any act done or omitted pursuant to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel shall be conclusive evidence of such good faith) and any action based upon such reliance without gross negligence or willful misconduct. The Shareholder Representative shall relieve serve as the Shareholder Representative of any liability hereunder. The Shareholders without compensation; provided that the Sellers shall severally and but not jointly jointly, on a pro-rata basis (based on each Shareholder’s pro rata share i) in accordance with such Seller’s Seller Pro-Rata Share in the Waterfall compared case of matters not related to indemnification matters hereunder, and (ii) in accordance with such Seller’s Indemnification Pro-Rata Share in the pro rata shares case of all Shareholders signing this Agreement or otherwise bound hereby; provided thatmatters related to indemnification matters hereunder, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative him/her/it harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, Liability or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraudwithout gross negligence, willful misconduct, gross negligence misconduct or bad faith on the part of the Shareholder RepresentativeRepresentative and arising out of, resulting from or in connection with the acceptance or administration of his duties hereunder, including without limitation all reasonable out-of-pocket costs and expenses and legal fees and other legal costs reasonably incurred by the Shareholder Representative will reimburse (collectively, the Shareholders the amount of such indemnified “Shareholder Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faithExpenses”). If not paid directly to the Shareholder Representative by the ShareholdersSellers, any such Representative Losses losses, Liabilities or expenses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, Fund Amount and (ii) the funds in the case of Shareholder Representative Expenses related to indemnification matters hereunder, the portion of the Aggregate Holdback Amount or Escrow Amount at such time as such amounts would Account otherwise be distributable to the ShareholdersIndemnifying Shareholders (and not distributed or distributable to a Buyer Indemnified Party or subject to a Resolved Claim or an Unresolved Claim) on or after the applicable date of release and payment of such amounts by Buyer to the Indemnifying Shareholders pursuant to the terms hereof, at the time of distribution, and such recovery will be made from the Sellers according to their respective Seller Pro-Rata Shares or Indemnification Pro-Rata Share (iiidepending on whether such matters do not relate, or relate, to indemnification matters hereunder, respectively) any other funds that become payable to the Shareholders under this Agreement at of such time as such amounts would otherwise be distributable to the Shareholderslosses, Liabilities or expenses; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders Sellers from their obligation to promptly pay such Shareholder Representative Losses Expenses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders Sellers or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding Notwithstanding anything in this Agreement to the contrary, the any restrictions or limitations on liability or indemnification obligations of, or provisions limiting of the recourse against non-recourse parties otherwise applicable to, the indemnifying Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5Section. The Purchaser shall not be liable to any Shareholder for any act done foregoing indemnities will survive the Closing, the resignation or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses removal of the Shareholder Representative incurred or the termination of this Agreement.
11.7.3 The Buyer shall not, in connection any circumstance, be liable for any acts or omissions of the Shareholders Representative related to the Sellers, including, but not limited to, with regards to any conflict or dispute between the Shareholders Representative and the Sellers in relation to the content and conditions of this Agreement. The Sellers agree that the appointment of the Shareholders’ Representative pursuant to his duties mentioned in Section 11.8.1 shall not, in any circumstance, be considered as the Sellers have not reviewed, negotiated or agreed with any provision contained in this Agreement and and, as such, the agreements ancillary hereto (the “Expense Fund”). All amounts deposited Sellers shall not be exempted from complying with any obligation applicable to the Expense Fund shall be treated for all purposes as having been paid at Closing Sellers under this Agreement due to the Shareholders and received and voluntarily set aside by appointment of the Shareholders at Shareholders’ Representative.
11.7.4 Upon the Closing. The Shareholders , Buyer will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign wire to the Shareholder Representative the Expense Fund Amount, which will be used for the purposes of paying directly, or reimbursing the Shareholder Representative for, any ownership right they may otherwise have had Shareholder Representative Expenses incurred pursuant to this Agreement and any other agreement, document or instrument entered into or executed in any such interest or earningsconnection with the Transactions. The Shareholder Representative will is not be liable providing any investment supervision, recommendations or advice and shall have no responsibility or liability for any loss of principal of the Expense Fund Amount other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will is not use these funds for its operating expenses acting as a withholding agent or in any other corporate purposes and will not voluntarily make these funds available to its creditors similar capacity in the event of bankruptcy. The amounts deposited in connection with the Expense Fund shall be available for Amount, and has no tax reporting or income distribution obligations. The Sellers will not receive any interest or earnings on the payment of all fees Expense Fund Amount and expenses reasonably incurred by irrevocably transfer and assign to the Shareholder Representative any ownership right that they may otherwise have had in performing its duties under this Agreement and any such interest or earnings. As soon as practicable following the agreements ancillary hereto; provided that any portion earlier of (i) the twenty-four (24) month anniversary of the Expense Fund not ultimately required for the payment of such fees Closing Date, and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following (ii) the completion of the Shareholder Representative’s responsibilities. All amounts , the Shareholder Representative will deliver any remaining in balance of the Expense Fund upon termination of Amount to the Shareholder Representative’s engagement (Indemnifying Shareholders in accordance with their Indemnification Pro-Rata Share thereof. For tax purposes, the Expense Fund Amount will be treated as having been received and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered voluntarily set aside by the Escrow Agent to Indemnifying Shareholders at the Paying Agent for further distribution to the Shareholders based on the Waterfalltime of Closing.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N(a) ▇▇▇▇ ▇. ▇▇▇▇ (the “Shareholder Representative”) with all the rights▇▇▇, powers and obligations contemplated by this Section 4Ph.D., and any successor Shareholder Representative(s) designated under this Section 4 is hereby irrevocably appointed as the solerepresentative, exclusive, true and lawful agent, representative agent and attorney-in-fact for and on behalf of all Shareholders, the Company and each of themShareholder, with respect (i) to any give and all receive notices and communications relating to the transactions and other matters arising out of or in connection with contemplated by this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsSeller Ancillary Documents, notices, communications including those relating to adjustments to the Merger Payment and determinations by or indemnification claims; (ii) to make decisions on behalf of the Company and the Shareholders in accordance herewith shall with respect to the transactions and other matters contemplated by this Agreement or the Seller Ancillary Documents, including regarding (A) adjustments to the Merger Payment, (B) indemnification claims, (C) amendments to this Agreement or the Seller Ancillary Documents and (D) the defense of third party suits that may be given the subject of indemnification claims, and to negotiate, enter into settlements and compromises of, and demand litigation or made arbitration with respect to such third party suits or claims by the Parent for indemnification; and (iii) to take other actions on behalf of the Company and the Shareholders as contemplated by this Agreement or the Seller Ancillary Documents, including the exercise of all rights granted to the Company and the Shareholders under this Agreement or the Seller Ancillary Documents.
(b) The Company and each Shareholder Representative agrees that (i) the provisions of this Section 12.1 are independent and all such actionsseverable, notices, are irrevocable and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, coupled with an interest and shall be binding upon, enforceable notwithstanding any and all Shareholders.
4.2. Without limiting rights or remedies the generality of the foregoing, the Company or any Shareholder Representative shall may have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or transactions contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense FundSeller Ancillary Documents, (ii) the funds in remedy at law for any breach of the Escrow Amount at such time as such amounts provisions of this Section 12.1 would otherwise be distributable to the Shareholdersinadequate, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 12.1 shall apply, mutatis mutandis, to be binding upon the successors and assigns of the Company and each Shareholder.
(c) A decision, act, consent or instruction of the Shareholder Representative relating to this Agreement or the Seller Ancillary Documents shall constitute a decision for the Company and all Shareholders, and shall be final, binding and conclusive upon the Company and the Shareholders, and the Parent may rely upon any such decision, act, consent or instruction of the Shareholder Representative as if it was a being the decision, act, consent or instruction of the Company and every Shareholder. The Shareholders shall indemnify and hold harmless the Parent from any action or omission on their behalf at the request or instruction of Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N(a) The Parties have agreed that it is desirable to designate B▇▇▇▇ ▇▇▇▇▇▇ (and if B▇▇▇▇ ▇▇▇▇▇▇ is unable or unwilling to serve, then M▇▇▇ ▇▇▇▇▇▇) to serve as the representative of the holders of the Company Stock (the “Shareholder Representative”) with all for certain limited purposes as set forth herein. The approval of this Agreement by the rightsholders of the Company Stock will constitute ratification and approval of such designation. The Shareholder Representative will have such power and authority necessary to carry out the functions assigned to the Shareholder Representative under this Agreement and the Escrow Agreement, powers including the power and obligations contemplated by this Section 4authority:
(i) to execute and deliver the Escrow Agreement, and to enter into any successor amendments, modifications and/or waivers in respect thereof;
(ii) to enforce, defend and protect the rights and interests of the holders of the Company Stock following the Closing under Article IX of this Agreement and under the Escrow Agreement, and to take any and all actions that the Shareholder Representative(s) designated Representative believes are necessary or appropriate under Article IX of this Section 4 as Agreement and under the sole, exclusive, true and lawful agent, representative and attorney-in-fact Escrow Agreement for and on behalf of all Shareholdersthe holders of the Company Stock, including, without limitation, asserting, pursuing or defending any claim by or against Parent or the Surviving Corporation, consenting to, compromising or settling any such claim, and each of themconducting negotiations with Parent or Surviving Corporation; and
(iii) to make, with respect execute, acknowledge and deliver all such other agreements, notices, requests, instructions and other writings, and, in general, to do any and all matters arising out of things and to take any and all actions that the Shareholder Representative may consider necessary or proper in connection with this Agreement (excluding pursuant to Section 10.2), carrying out the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf responsibilities of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions Article IX of this Agreement and the Escrow Agreement; .
(b) The Shareholder Representative will be entitled to negotiate engage such counsel, experts and sign all documents other agents as the Shareholder Representative deems necessary or proper in connection with performing its obligations hereunder and under the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, and will be promptly reimbursed by the Payment Agent Agreementholders of the Company Stock for all reasonable expenses, share transfer deeds disbursements and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken advances incurred by the Shareholder Representative in connection with such matterscapacity upon demand, pro rata based upon each such holder’s share of the Company Stock as of the Closing. By virtue Each holder of executing or adopting this Agreementthe Company Stock shall indemnify and hold harmless the Shareholder Representative, each Shareholder agrees to ratify pro rata based upon such holder’s share of all Company Stock as of the Closing, from any and confirm, and hereby ratifies and confirms, any action taken all Damages that are incurred by the Shareholder Representative in as a result of actions taken, or actions not taken, by the exercise Shareholder Representative herein, except to the extent that such Damages arise from the gross negligence or willful misconduct of the power Shareholder Representative.
(c) All amounts received by the Shareholder Representative on behalf of attorney granted the holders of the Company Stock (whether under this Agreement or the Escrow Agreement), will be promptly paid by the Shareholder Representative to the holders of the Company Stock, in accordance with Section 1.7; provided, however, that the Shareholder Representative will be entitled to set off any amounts payable to the Shareholder Representative under Section 10.13(b) against amounts otherwise payable to holders of the Company Stock pursuant to this Section 10.13(c).
(d) Parent and Surviving Corporation shall have the right to rely upon all actions taken or not taken by the Shareholder Representative pursuant to this Section 4.2Agreement and the Escrow Agreement, all of which power of attorney, being coupled with an interest, is irrevocable and actions or omissions shall survive be legally binding upon the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power holders of the Company on an as converted basis shall designate in writing to Purchaser within five Stock.
(5e) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a the Shareholder Representative and resigns, dies or becomes incapable of acting, the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt holders of a written request delivered by Purchaser to majority of the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court Company Stock as of competent jurisdiction to appoint a Shareholder the Closing shall choose another holder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4Agreement.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Geisel Brian R)
Shareholder Representative. 4.1. By virtue (a) The parties hereto have agreed that it is desirable to designate Sightline Partners LLC to serve, commencing as of the execution or adoption of this AgreementEffective Time, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agentrepresentative, representative agent and attorney-in-fact of each and all of the holders of the Company Stock, Options and Warrants (the "Shareholder Representative") for certain limited purposes as set forth herein. The adoption of this Agreement by the holders of the Company Stock shall constitute ratification and on behalf approval of all Shareholderssuch designation, and each the irrevocable constitution and appointment of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2as set forth herein. Without limiting the generality of the foregoing, the The Shareholder Representative shall have full such power and authority to: from and after necessary to carry out the Closing, direct the Paying Agent to disburse amounts paid functions assigned to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated Shareholder Representative under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; , including but not limited to negotiate the power and sign authority:
(i) to execute and deliver the Escrow Agreement, and to enter into any amendments, modifications and/or waivers in respect thereof;
(ii) to enforce, defend and protect the rights and interests of the holders of the Company Stock following the Closing under this Article VIII and under the Escrow Agreement, and to take any and all documents in connection with actions that the Transaction Shareholder Representative believes are necessary or appropriate under this Article VIII and amendments theretounder the Escrow Agreement for and on behalf of the holders of the Company Stock, whether before or after Closing (including, without limitation, Escrow Agreementasserting, pursuing or defending any claim by or against the Payment Agent AgreementParent or the Surviving Corporation, share transfer deeds consenting to, compromising or settling any such claim, and endorsements conducting negotiations with the Parent or Surviving Corporation; and
(iii) to make, execute, acknowledge and termination instruments and including amendments that may require price reductions or holdbacks); and to grantdeliver all such other agreements, providenotices, negotiate and sign all waivers, consentsrequests, instructions and authorizations other writings, and, in general, to do any and all things and to take any and all other actions called for under or contemplated by or that the Shareholder Representative may otherwise be consider necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made carrying out its responsibilities under and pursuant to this Agreement, the Paying Agent Agreement Article VIII and the Escrow Agreement. From and after the Closing, the Purchaser shall .
(b) The Shareholder Representative will be entitled to deal exclusively with engage such counsel, experts and other agents as the Shareholder Representative deems necessary or proper in respect of any matter arising connection with performing its obligations hereunder and under the Transaction DocumentsEscrow Agreement, and will be promptly reimbursed by amounts in the Shareholders, in their relationship with the Purchaser, shall be bound by Shareholder Representative Escrow Fund for all actions taken reasonable Shareholder Representative Expenses incurred by the Shareholder Representative in connection with such matterscapacity, up to an amount equal to Five Hundred Thousand Dollars ($500,000). By virtue of executing or adopting this AgreementIn addition, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative shall be entitled to receive a fee, in the exercise amount of Four Hundred Dollars ($400) per hour, for the performance of its services hereunder and under the Escrow Agreement following the Closing Date (the "Shareholder Representative Fee"). To the extent not paid out of the power of attorney granted Shareholder Representative Escrow Fund, the Shareholder Representative Fee shall be paid to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive from the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at Escrow Fund following the Escrow Termination Date before any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior distributions therefrom are made to the Closingholders of Company Stock, the majority of the voting power of the Company on an as converted basis shall designate Options and Warrants in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including accordance with respect to potential or contingent liabilities of the Shareholders hereunderSection 8.5(c).
4.4. The Shareholder Representative shall not be liable to any holder of Company Stock, Options or Warrants, and each holder of the Shareholders for any act done or omitted hereunder in its capacity as Company Stock, Options and Warrants shall indemnify and hold harmless the Shareholder Representative, except pro rata based upon, and up to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreementan amount not to exceed, the Shareholder Representative may rely on the advice of counsel and Merger Consideration paid to such holder, from any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions Damages that are incurred by the Shareholder Representative and arising out as a result of actions taken, or actions not taken, by the Shareholder Representative herein, in connection with each case except to the acceptance, performance extent of any gross negligence or administration willful misconduct of the Shareholder Representative’s duties hereunder . In taking any action whatsoever hereunder, the Shareholder Representative shall be entitled to and under the Transaction Documents (collectivelyprotected in relying upon any notice, “Representative Losses”), in each case as such Representative Loss is suffered paper or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused other document believed by the fraudShareholder Representative in good faith to be genuine, willful misconduct, gross negligence or bad upon evidence deemed by the Shareholder Representative in good faith on the part of to be sufficient. With respect to its service as the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of shall have no liability as such indemnified Representative Loss to the extent attributable Parent, the Merger Sub or the Surviving Corporation hereunder.
(c) All amounts received by the Shareholder Representative on behalf of the holders of the Company Stock (whether under this Agreement or the Escrow Agreement), will be promptly paid by (or promptly caused to such fraudbe paid by) the Shareholder Representative to the holders of the Company Stock, willful misconductOptions and Warrants in accordance herewith and the Escrow Agreement. Notwithstanding the foregoing, gross negligence or bad faith. If not paid directly the Shareholder Representative will be entitled to reimbursement of any amounts payable to the Shareholder Representative by the Shareholders, any such under Section 8.10(b) hereof including Shareholder Representative Losses may be recovered by Expenses and Shareholder Representative Fees from the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwiseAmount. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding Notwithstanding anything in this Agreement herein to the contrary, the limitations on liability or indemnification obligations ofShareholder Representative, or provisions limiting the recourse against non-recourse parties otherwise applicable toat its option, the Shareholders may set forth elsewhere in this Agreement (off any amounts due under Section 8.10(b) including in Section 10.8) are not intended to be applicable to the indemnities provided to Shareholder Representative Expenses and the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from Fees against amounts otherwise payable at Closing to the Shareholders contributed by holders of Company Stock, Options and Warrants from the Purchaser on behalf of the Shareholders Escrow Fund pursuant to the Escrow Agent for an account maintained by the Escrow Agent for the benefit terms of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (Escrow Agreement. In addition, in the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to event the Shareholder Representative any ownership right they receives amounts from holders of Company Stock, Options or Warrants to reimburse or contribute toward Shareholder Representative Expenses, the Shareholder Representative may set off amounts otherwise have had payable to holders of Company Stock, Options and Warrants from the Escrow Fund in order to refund to holders a pro rata portion of such amounts that were reimbursed or contributed, in order to ensure that all holders bear an equal pro rata portion of any such interest or earnings. The Shareholder Representative will Expenses.
(d) The Parent, Surviving Corporation and the Escrow Agent shall each have the right to rely upon all actions taken or not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred taken by the Shareholder Representative in performing its duties under this Agreement pursuant hereto and the agreements ancillary hereto; provided that any portion Escrow Agreement, all of which actions or omissions shall be legally binding upon the holders of the Expense Fund not ultimately required for the payment Company Stock or any of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallthem.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Healthways, Inc)
Shareholder Representative. 4.1. By virtue (a) Upon approval by the stockholders of CTI of the execution or adoption Merger, this Agreement and the other transactions contemplated hereby, the stockholders of this AgreementCTI will be deemed to have appointed, each Shareholder irrevocably approves as of the constitution and appointment ofEffective Time, and hereby irrevocably constitutes and appoints N▇Edwa▇▇ ▇. ▇▇▇▇▇ (the “▇▇e "Shareholder Representative”") with all as their representative under this Agreement and the rightsEscrow Agreement, powers and including for purposes of the indemnification obligations contemplated by set forth in this Section 4Article VIII, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact and agent for and on behalf of all Shareholders, and each of them, such CTI stockholders with respect authority to take any and all matters arising out of actions and make any and all decisions required or in connection with permitted to be taken or made by them under this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, and the Escrow Agreement and (including the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf settling of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreementclaims for indemnity). All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the The Shareholder Representative shall have full power and authority to: from and after as agent of the Closing, direct CTI stockholders to represent the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this AgreementCTI stockholders, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated their successors, heirs, representatives, and assigns with respect to all matters arising under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate Agreement and sign all documents in connection with any other matters concerning the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or transactions contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and Agreement after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in shall be binding upon the exercise CTI stockholders and their successors, heirs, representatives and assigns as if expressly confirmed and ratified by each of the power of attorney granted to the them.
(b) The Shareholder Representative pursuant shall act in good faith in undertaking his duties set forth herein. The Shareholder Representative, acting in such capacity, shall not incur any liability with respect to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity any action or incompetence of each such Shareholder.
4.3inaction taken by him except those involving his own willful misconduct or gross negligence. The Shareholder Representative may resign at any time. Should may, in all questions arising under this Agreement, rely on the advice of counsel and for anything done, omitted or suffered in good faith by the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her steadbased on such advice, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to anyone, except to the Shareholders for extent such action or inaction involves 51 52 the Shareholder Representative's own willful misconduct or gross negligence. Nothing set forth in this Section 8.7(b) shall in any act done way relieve the Shareholder Representative in his capacity as a CTI Stockholder of his obligations under this Article VIII.
(c) In the event of the death or omitted hereunder in its capacity permanent disability of the Shareholder Representative or his resignation as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the a successor Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderbe appointed by Roge▇ ▇▇▇▇▇▇. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount ▇▇ompt notice of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses appointment shall be delivered in writing by Roge▇ ▇▇▇▇▇▇ ▇▇ WAXS and the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallAgent.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption approval of the Merger and this AgreementAgreement by the requisite vote of the Shareholders, each Shareholder irrevocably approves of the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Shareholders shall be deemed to have agreed to appoint Magnum Communications Fund L.P. as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the Shareholder Representative for and on behalf of all Shareholdersthe Shareholders (i) to give and receive notices and communications, to authorize payment to any Indemnified Party directly against the Shareholders in satisfaction of claims by any Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to any such claims, to negotiate, investigate and resolve all matters arising out relating to ARTICLE VIII and ARTICLE IX hereof, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any Shareholder or by any such Shareholder against any Indemnified Party or any dispute between any Indemnified Party and any such Shareholder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices(ii) to agree to, communications negotiate, execute and determinations by or distribute the Earnout Warrants and deliver the Earnout Warrants to the Shareholders as provided therein, to fulfill all of its obligations thereunder and EXECUTION COPY resolve all matters relating thereto, act on behalf of the Shareholders in accordance herewith shall be given or made by connection therewith, (iii) to prepare the Shareholder Representative Payment Schedules and to direct the payment of all such actions, noticesMerger Consideration payable hereunder, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and iv) to take all other actions called for under or contemplated by or that may otherwise be are either (A) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (B) specifically mandated by the terms of this Agreement. Such agency may be changed by the Shareholders from time to time upon not less than thirty (30) days prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed unless Shareholders holding a majority of Company Shares agree to such removal and to prosecute, defend and settle in the identity of the substituted agent. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderShareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s 's duties hereunder hereunder, including the reasonable fees and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that expenses of any such Representative Loss is finally adjudicated to have been directly caused legal counsel retained by the fraudShareholder Representative ("SHAREHOLDER REPRESENTATIVE EXPENSES"). A decision, willful misconductact, gross negligence consent or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse including but not limited to an amendment, extension or waiver of this Agreement, shall constitute a decision of the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraudand shall be final, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, binding and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to conclusive upon the Shareholders; providedand Parent may rely upon any such decision, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of fundsact, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered consent or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal instruction of the Shareholder Representative as being the decision, act, consent or instruction of the termination of this AgreementShareholders. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on Parent is hereby relieved from any liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder person for any act acts done by it in accordance with such decision, act, consent or omitted hereunder by instruction of the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N(a) ▇▇▇ ▇▇▇▇▇ agrees to act as, and assume the obligations and responsibilities of, the Shareholder Representative under this Agreement (the “Shareholder Representative”). Each Shareholder, as a condition of tendering its Shares for the Per Share Merger Consideration shall, pursuant to its Letter of Transmittal, (i) with all irrevocably appoint the rightsShareholder Representative as its representative, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative proxy, and attorney-in-fact for all purposes under this Agreement, including the full power and authority on behalf of all Shareholderssuch Shareholder’s behalf: (x) to consummate the transactions contemplated by this Agreement, (y) to negotiate disputes arising under, or relating to, this Agreement and the other agreements, certificates, instruments, and each documents contemplated by this Agreement or executed or delivered in connection with this Agreement, and (z) to execute and deliver any amendment or waiver to this Agreement or any of themthe other agreements, with respect to any certificates, instruments, and all matters arising out of documents contemplated by this Agreement or executed or delivered in connection with this Agreement to be executed by such Shareholder; (excluding pursuant ii) consent to Section 10.2), ▇▇▇▇▇▇▇ acting as the Paying Agent Agreement, the Escrow Agreement Shareholder Representative and the agreements ancillary hereto following the Closing and to ▇▇▇▇▇▇▇ taking any action all actions required or omitting permitted to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made taken by the Shareholder Representative pursuant to this Agreement and all such actionsthe other agreements, noticescertificates, instruments, and determinations documents contemplated by this Agreement or executed or delivered in connection with this Agreement and performing the duties of the Shareholder Representative shall conclusively pursuant to the terms hereof or thereof; and (iii) agree to be deemed to have been authorized by, and shall be binding upon, any and all Shareholdersbound by the provisions of this Section 10.5.
4.2. Without limiting the generality of (b) Notwithstanding the foregoing, the Shareholder Representative shall have full power no obligation to take any such action and authority to: from no duties other than actions and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated duties expressly required under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection be complied with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes .
(including hiring counsel c) All decisions and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with actions by the Shareholder Representative shall be binding upon all of the Shareholders, and no Shareholder shall have the right to object, dissent, protest, or otherwise contest the same. The Shareholder Representative shall have no Liability in respect of any matter arising under the Transaction Documentsaction, and the Shareholdersclaim, in their relationship with the Purchaser, shall be bound by all actions taken by or proceeding brought against the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each by any Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by if the Shareholder Representative took or omitted taking any action in good faith or took or omitted to take such action at the exercise direction of the power Shareholders owning a majority of attorney granted the outstanding Preferred Stock immediately prior to the Closing.
(d) The designation of the Shareholder Representative pursuant to this Section 4.2, which power of as attorney, being -in-fact for each Shareholder is coupled with an interest, interest and is irrevocable and shall survive binding upon such Shareholder notwithstanding the death, incapacity or incompetence dissolution of each any such Shareholder.
4.3. The Shareholder Representative may resign at If any time. Should such event shall occur prior to the completion of the transactions contemplated by this Agreement, the Shareholder Representative dieis, become legally incapacitated or bankruptnevertheless, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closingextent that it is legally able to do so, the majority of the voting power of the Company on an authorized and directed to complete all transactions and act pursuant to this authority as converted basis shall designate in writing to Purchaser within five if such event had not occurred.
(5e) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion acceptance of all the Shareholder Representative’s responsibilities its duties under this Agreement (including is subject to the following terms and conditions, which the Parties hereto agree shall govern and control with respect to potential its rights, duties, liabilities and immunities as the Shareholder Representative (but not in its capacity as a Shareholder):
(i) The Shareholder Representative, in its capacity as Shareholder Representative, makes no representation and has no responsibility as to the validity of this Agreement or contingent liabilities of any other instrument referred to herein, or as to the Shareholders hereunder)correctness of any statement contained herein, and it shall not be required to inquire as to the performance of any obligation under this Agreement by any Party.
4.4. (ii) The Shareholder Representative shall be protected in acting upon written notice, request, waiver, consent, receipt or other paper or document, not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth of any information therein contained, which it in good faith believes to be genuine and what it purports to be.
(iii) The Shareholder Representative, in its capacity as Shareholder Representative, shall not be liable to the Shareholders for any error of judgment, or for any act done or step taken or omitted hereunder by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection therewith, except its own gross negligence or willful misconduct.
(iv) The Shareholder Representative, in its capacity as the Shareholder Representative, except to the extent caused may consult with competent and responsible legal counsel selected by its willful misconductit, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and it shall not be liable for any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share taken or omitted by it in good faith in accordance with the Waterfall compared to the advice of such counsel.
(f) The Shareholders shall bear pro rata shares of (based on the Per Share Merger Consideration owed to each) for all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense expenses (including the fees reasonable attorneys’ fees, transfer Taxes and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions other governmental charges) incurred by the Shareholder Representative in connection with its duties hereunder and arising out all amounts paid by the Shareholder Representative pursuant to the terms of or this Agreement, including without limitation, under Section 2.7, 2.8, 2.9, 2.10, and 8.6 and Article 9, and shall indemnify, defend and hold it harmless against any and all Losses incurred in connection with the acceptanceperformance of this Agreement, performance except as a result of its own gross negligence or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurredwillful misconduct; provided, that in however, (i) the event that obligation of any Shareholder other than ▇▇▇▇▇▇▇ shall be non-recourse to such Representative Loss is finally adjudicated Shareholder and shall be payable solely from the Per Share Merger Consideration and (ii) no Shareholder other than ▇▇▇▇▇▇▇ shall have any obligation to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, reimburse the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative for any Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time pursuant to Article 9 solely as such amounts would otherwise be distributable to the Shareholders, and (iii) a result of any other funds breach by ▇▇▇▇▇▇▇ of its covenants or representations. The Shareholders agree that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative shall have the right from time to be paid from time to direct the aforementioned sources of funds, this does not relieve the Shareholders from their obligation Paying Agent to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available amounts owed to it at law or otherwise. In no event will pursuant to this Section 10.5(f) from amounts then on deposit in the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding Paying Agent Account.
(g) Notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to extent the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable has any Liability to any Shareholder Purchaser Party pursuant to this Agreement or any other agreement, certificate, or instrument delivered in connection with this Agreement, ▇▇▇▇▇▇▇ shall have personal Liability to such Purchaser Party for any act done or omitted hereunder by such Liability, regardless of the extent to which the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of Representative is entitled or is able, either as a Shareholder or as the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of enforce its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or rights against any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallShareholder.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue (a) Each of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and Shareholders hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (Bank, not individually but as Trustee of and on behalf of the “Shareholder Representative”) with all the rights▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, as the "Shareholder Representative" for and on behalf of all Shareholdersthe Shareholders to give and receive notices and communications, to authorize payment to any Indemnified Party from the Escrow Fund in satisfaction of claims by any Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each demand arbitration and comply with orders of them, courts and awards of arbitrators with respect to such claims, to assert, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to, any other claim by any Indemnified Party against any Shareholder or by any such Shareholder against any Indemnified Party or any dispute between any Indemnified Party and all matters arising out of or any such Shareholder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documentsjudgment of the Shareholder Representative for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed by the Shareholders from time to time upon not less than 30 days prior written notice to Parent; provided, however, that the Shareholder Representative may not be removed unless holders of a majority in interest of the Escrow Fund agree to such removal and to prosecute, defend and settle the identity of the substituted agent. A vacancy in the position of Shareholder Representative may be filled by the holders of a majority in interest of the Escrow Fund. No bond shall be required of the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel , and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of shall not receive any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by compensation for its services. Notices or communications to or from the Shareholder Representative in connection with such matters. By virtue of executing shall constitute notice to or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by from the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such ShareholderShareholders.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5b) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with whose behalf the Waterfall compared Escrow Amount was contributed to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby Escrow Fund shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s 's duties hereunder hereunder, including the reasonable fees and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that expenses of any such Representative Loss is finally adjudicated to have been directly caused legal counsel retained by the fraudShareholder Representative ("Shareholder Representative Expenses"). A decision, willful misconductact, gross negligence consent, or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount including but not limited to an amendment or waiver of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above9.12 hereof, shall constitute a decision of the provisions Shareholders and shall be final, binding and conclusive upon the Shareholders; and the Escrow Agent and Parent may rely upon any such decision, act, consent or instruction of this Section 4 shall applythe Shareholder Representative as being the decision, mutatis mutandisact, consent, or instruction of the Shareholders. The Escrow Agent and Parent are hereby relieved from any liability to any person for any acts done by them in accordance with such decision, act, consent or instruction of the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue To facilitate the consummation of the execution or adoption of transactions contemplated by this Agreement, from and after the Closing, each Shareholder of the Selling Shareholders (and their successors and assigns) hereby irrevocably approves consent to the constitution and appointment of, and do hereby irrevocably constitutes appoint and appoints Nempower, each of ▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. (the “Shareholder Representative”and each of them does hereby accept such appointment) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and each such Selling Shareholder's attorney-in-fact (with full power of substitution) for carrying out the transactions contemplated hereby and as the sole and exclusive representative (each, a "SHAREHOLDER REPRESENTATIVE") of all of them (and their successors and assigns) to make all decisions and determinations on behalf of all Shareholdersof them (and their successors and assigns) that the Shareholder Representatives may deem necessary or appropriate to accomplish the intent, and each implement the provisions, of themthis Agreement, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2)including, without limitations, the Paying Agent Agreement, execution of the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Subscription Agreement or the Paying Agent Option Agreement. All actions, notices, communications and determinations by or on behalf of as the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2case may be. Without limiting the generality of the foregoing, the Shareholder Representative Representatives shall have full the power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid agree to the Paying Agent in accordance any matters with the Waterfall and this Agreement, and such portion respect to indemnification provided for hereunder. All decisions of the Escrow Amount as is remaining at the end Shareholder Representatives shall be final and binding on all of the escrow period contemplated under Section 2.8, in accordance with the Waterfall Selling Shareholders (and in accordance with the terms their successors and conditions of this Agreement assigns). The Purchaser (and the Escrow Agreement; to negotiate its successors and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceedingassigns) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documentsrely upon, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirmswithout independent investigation, any decision or action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and shall be fully protected in connection with any action or inaction taken or omitted to be taken in reliance thereon. The Selling Shareholders (and their permitted successors and assigns) may by the Shareholders fail vote of holders holding a majority of shares at any time and from time to designate time replace the Shareholder Representatives and appoint another Selling Shareholder as a Shareholder Representative. It is a condition to the appointment of any Person as the Shareholder Representative hereunder that such Person confirms in writing a successor to the Purchaser that such Person has accepted such appointment as the Shareholder Representative within five (5) Business Days after receipt under the terms of this Article. If a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designatedis replaced as provided for herein, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The newly-appointed Shareholder Representative shall notify the Purchaser in writing of such Person's appointment and appropriate contact information, and the Purchaser (and its successors and assigns) shall be entitled to rely upon, without independent investigation, the identity of the Shareholder Representative as set forth in such written notice. The Selling Shareholders agree, by their execution of this Agreement, that the Shareholder Representatives, in their capacity as such, shall not be liable have any liability to any of the Selling Shareholders for any act done acts or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate omissions of the Shareholder Representative’s indemnity coverage from Representatives taken, or omitted to be taken, in connection with performance of the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend duties of the Shareholder Representative Representatives described herein, and hold each Selling Shareholder hereby waives and releases any claims against the Shareholder Representative harmless against Representatives in such capacity and shall not initiate any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiturelawsuits or other court proceedings, or expense (including take similar action, against the fees and expenses of counsel and experts and their staffs and all expense of document locationShareholder Representatives, duplication and shipment), in any case other than for acts or actions incurred omissions involving wilful misconduct by the Shareholder Representative Representatives. The Selling Shareholders agree to indemnify, defend and hold harmless the Shareholder Representatives from and against any Losses based upon, arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that otherwise resulting from any such Representative Loss is finally adjudicated action undertaken pursuant to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered this Agreement by the Shareholder Representative from (i) the funds in the Expense FundRepresentatives, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than any Losses arising as a result of its the gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion malfeasance of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallRepresentatives.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption of this Agreementand delivery hereof, including counterparts hereof, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇▇▇ ▇▇▇▇▇▇ as the true and lawful agent and attorney-in-fact (the “Shareholder Representative”) of such Shareholder with all full powers of substitution to act in the rightsname, powers place and obligations contemplated by this Section 4, and any successor stead of such Shareholder Representative(s) designated under this Section 4 as with respect to the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and performance on behalf of such Shareholder under the terms and provisions hereof and to do or refrain from doing all Shareholderssuch further acts and things, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and execute all such actionsdocuments, notices, and determinations by as the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be deem necessary or appropriate in connection with any transaction contemplated hereunder, including the Transaction Documentspower to:
(i) act for such Shareholder with respect to all indemnification matters referred to herein, including the right to compromise or settle any such claim on behalf of such Shareholder;
(ii) amend or waive any provision hereof (including any condition to Closing) in any manner that does not differentiate among any Shareholder;
(iii) employ, obtain and rely upon the advice of legal counsel, accountants and other professional advisors as the Shareholder Representative, in the sole discretion thereof, deems necessary or advisable in the performance of the duties of the Shareholder Representative;
(iv) receive and receipt for any portion of the Purchase Price or any other payment due from the Purchaser to such Shareholder pursuant to this Agreement;
(v) act for each Shareholder with respect to all Purchase Price matters and all Purchase Price adjustments matters referred to herein;
(vi) incur any expenses, liquidate and withhold assets received on behalf of such Shareholder prior to their distribution to such Shareholder to the extent of any amount that the Shareholder Representative deems necessary for payment of or as a reserve against expenses, and pay such expenses or deposit the same in an interest-bearing bank account established for such purpose;
(vii) receive all notices, communications and deliveries hereunder on behalf of such Shareholder; and
(viii) do or refrain from doing any further act or deed on behalf of such Shareholder that the Shareholder Representative deems necessary or appropriate, in the sole discretion of the Shareholder Representative, relating to the subject matter hereof as fully and completely as such Shareholder could do if personally present and acting and as though any reference to prosecutesuch Shareholder herein was a reference to the Shareholder Representative.
(b) The appointment of the Shareholder Representative shall be deemed coupled with an interest and shall be irrevocable, defend and settle any other Person may conclusively and absolutely rely, without inquiry, upon any action of the Shareholder Representative as the act of each Shareholder in all matters referred to herein. Each Shareholder hereby ratifies and confirms that the Shareholder Representative shall do or cause to be done by virtue of the Shareholder Representative’s discretion appointment as Shareholder Representative of such Shareholder. The Shareholder Representative shall act for each Shareholder on all indemnification disputes of the matters set forth herein in the manner the Shareholder Representative believes to be in the best interest of such Shareholder, but the Shareholder Representative shall not be responsible to any Shareholder for any loss or damage such Shareholder may suffer by reason of the performance by the Shareholder Representative of the Shareholder Representative’s duties hereunder, other than loss or damage arising from willful misconduct or gross negligence in the performance of the Shareholder Representative’s duties hereunder.
(including hiring counsel c) Each Shareholder hereby expressly acknowledges and other litigation assistance agrees that the Shareholder Representative is authorized to act on behalf of such Shareholder notwithstanding any dispute or disagreement, and including in court of law or that any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser Person shall be entitled to deal exclusively with the Shareholder Representative in respect of rely on any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in hereunder without liability to, or obligation to inquire of, any Shareholder. In the exercise of the power of attorney granted to event the Shareholder Representative pursuant resigns or ceases to this Section 4.2function in such capacity for any reason whatsoever, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as then the successor Shareholder Representative hereunder. If at shall be the Person that the remaining Shareholders appoint; provided, however, that in the event for any time there shall not be a Shareholder Representative and reason no successor has been appointed within thirty (30) days following such resignation or cessation, then the Shareholders fail shall have the right to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint for appointment of a Shareholder to act as new Shareholder Representative hereunder. The successor Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless from and against any lossand all liabilities, liabilitylosses, deficiencycosts, damage, cost, claim, penalty, fine, forfeiture, or expense damages and expenses (including attorneys’ fees) reasonably incurred or suffered as a result of the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectivelyhereunder, “Representative Losses”), in each case as such Representative Loss is suffered except for willful misconduct or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4negligence.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue approving this Agreement and the transactions contemplated hereby or by executing and delivering a letter of the execution or adoption of this Agreementtransmittal, each Shareholder, SAFE 1 Holder and OneQor Post-Closing SAFE Holder shall have irrevocably authorized and appointed Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Representative as the sole, exclusive, true and lawful agent, such Person’s representative and attorney-in-fact for and to act on behalf of all Shareholders, and each of them, such Person with respect to this Agreement and to take any and all matters arising out of actions and make any decisions required or in connection with this Agreement (excluding pursuant permitted to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations be taken by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, including the Paying Agent exercise of the power to:
(i) give and receive notices and communications;
(ii) agree to, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to claims for indemnification made by Terra Tech pursuant to Section 7.5;
(iii) litigate, arbitrate, resolve, settle or compromise any claim for indemnification pursuant to Section 7.5;
(iv) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement and any Transaction Agreement;
(v) make all elections or decisions contemplated by this Agreement and any Transaction Agreement;
(vi) engage, employ or appoint any agents or representatives (including attorneys, accountants and consultants) to assist Shareholder Representative in complying with its duties and obligations; and
(vii) take all actions necessary or appropriate in the Escrow Agreement. From and after good faith judgment of Shareholder Representative for the Closing, accomplishment of the Purchaser foregoing.
(b) Terra Tech shall be entitled to deal exclusively with the Shareholder Representative in respect on all matters relating to this Agreement and shall be entitled to rely conclusively (without further evidence of any matter arising under the Transaction Documentskind whatsoever) on any document executed or purported to be executed on behalf of any Shareholder, SAFE 1 Holder or OneQor Post-Closing SAFE Holder by Shareholder Representative, and on any other action taken or purported to be taken on behalf of any Shareholder, SAFE 1 Holder or OneQor Post-Closing SAFE Holder by Shareholder Representative, as being fully binding upon such Person. Notices or communications to or from Shareholder Representative shall constitute notice to or from each of the Shareholders, in their relationship with SAFE 1 Holders or OneQor Post-Closing SAFE Holders. Any decision or action by Shareholder Representative hereunder, including any agreement between Shareholder Representative and Terra Tech relating to the Purchaserdefense, payment or settlement of any claims for indemnification hereunder, shall constitute a decision or action of all Shareholders, SAFE 1 Holders and OneQor Post-Closing SAFE Holders and shall be bound by all actions taken by final, binding and conclusive upon each such Person. No Shareholder, SAFE 1 Holder or OneQor Post-Closing SAFE Holder shall have the Shareholder Representative in connection with such mattersright to object to, dissent from, protest or otherwise contest the same. By virtue The provisions of executing or adopting this AgreementSection, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of including the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2hereby, which power of attorneyare independent and severable, being are irrevocable and coupled with an interest, is irrevocable interest and shall survive the deathnot be terminated by any act of any one or Shareholders, incapacity SAFE 1 Holders or incompetence OneQor Post-Closing SAFE Holders or by operation of each such ShareholderLaw, whether by death or other event.
4.3. (c) The Shareholder Representative may resign at any time. Should , and may be removed for any reason or no reason by the vote or written consent of a majority in interest of the Shareholders; provided, however, in no event shall Shareholder Representative die, become legally incapacitated resign or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, removed without the Shareholders who have held, immediately holders of a majority of the Shares prior to the ClosingMerger having first appointed a new Shareholder Representative who shall assume such duties immediately upon the resignation or removal of Shareholder Representative. In the event of the death, incapacity, resignation or removal of Shareholder Representative, a new Shareholder Representative shall be appointed by the vote or written consent of the holders of a majority of the voting power Shares prior to the Merger. Notice of such vote or a copy of the Company written consent appointing such new Shareholder Representative shall be sent to Terra Tech, such appointment to be effective upon the later of the date indicated in such consent or the date such notice is received by Terra Tech; provided, that until such notice is received, Terra Tech, Merger Sub and the Surviving Corporation shall be entitled to rely on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable decisions and actions of the prior Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate described in writing a successor Shareholder Representative within five (5Section 12.16(a) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder)above.
4.4. (d) The Shareholder Representative shall not be liable to the Shareholders Shareholders, SAFE 1 Holders or OneQor Post-Closing SAFE Holders for actions taken pursuant to this Agreement, except to the extent such actions shall have been determined by a court of competent jurisdiction to have constituted gross negligence or involved fraud, intentional misconduct or bad faith (it being understood that any act done or omitted hereunder in its capacity as the Shareholder Representative, except pursuant to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel counsel, accountants and any action based upon such reliance shall relieve the other professionals and experts retained by Shareholder Representative shall be conclusive evidence of any liability hereundergood faith). The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the their pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate portion of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) Existing Shares), indemnify and defend the hold harmless Shareholder Representative from and hold the Shareholder Representative harmless against against, compensate it for, reimburse it for and pay any lossand all losses, liabilityliabilities, deficiencyclaims, damageactions, costdamages and expenses, claim, penalty, fine, forfeiture, or expense (including the reasonable attorneys’ fees and expenses of counsel and experts and their staffs and all expense of document locationdisbursements, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or and in connection with its activities as Shareholder Representative under this Agreement (the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss it is finally adjudicated to have been directly that a Representative Loss or any portion thereof was primarily caused by the gross negligence, fraud, willful misconduct, gross negligence intentional misconduct or bad faith on the part of the Shareholder Representative, the Shareholder Representative will shall reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such gross negligence, fraud, willful misconduct, gross negligence intentional misconduct or bad faith. If not paid directly to the Shareholder The Representative by Losses shall be satisfied from the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from severally and not jointly (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from accordance with their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any pro rata portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder RepresentativeShares).
Appears in 1 contract
Sources: Merger Agreement (Terra Tech Corp.)
Shareholder Representative. 4.1. (a) By virtue of their approval of the execution or adoption of this AgreementMerger, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes Securityholder designates and appoints N▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 Representative as the sole, exclusive, true and lawful agent, representative such Securityholder’s agent and attorney-in-fact with full power and authority to act for and on behalf of all Shareholderseach Securityholder to give and receive notices and communications, and each to accept service of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or process on behalf of the Shareholders pursuant to Section 9.4(f) and Section 11.11, to authorize and agree to adjustments to the Merger Consideration under Sections 2.6 and 2.7 and other applicable provisions of this Agreement, to agree to, negotiate, enter into settlements and compromises of, and comply with Judgments of courts or other Governmental Authorities and awards of arbitrators, with respect to, any claims by any Purchaser Indemnified Party against any Shareholder or by any Shareholder against any Purchaser Indemnified Party, or any other dispute between any Purchaser Indemnified Party and any Securityholder, in accordance herewith shall be given each case relating to this Agreement or made the transactions contemplated by this Agreement and to take all actions that are either (i) necessary or appropriate in the judgment of the Shareholder Representative and all such actions, notices, and determinations for the accomplishment of the foregoing or (ii) specifically mandated by the terms of this Agreement. Notices or communications to or from the Shareholder Representative shall conclusively constitute notice to or from each of the Securityholders for all purposes under this Agreement.
(b) The Shareholder Representative may delegate its authority as Shareholder Representative to any one of the Shareholders for a fixed or indeterminate period of time upon not fewer than 10 Business Days’ prior written notice to the Purchaser in accordance with Section 11.2. In the event of the death or incapacity of the Shareholder Representative, a successor Shareholder Representative will be deemed to have been authorized byelected promptly by the Shareholders whose interests aggregate not less than a majority of the Net Notional Merger Consideration and the Securityholders will so notify the Purchaser. Each successor Shareholder Representative has all of the power, authority, rights and privileges conferred by this Agreement upon the original Shareholder Representative, and shall be binding upon, the term “Shareholder Representative” as used in this Agreement includes any and all Shareholderssuccessor Shareholder Representative.
4.2(c) A decision, act, consent or instruction of the Shareholder Representative constitutes a decision of all the Securityholders and is final, binding and conclusive upon the Securityholders, and the Purchaser and any Indemnified Party may rely upon any such decision, act, consent or instruction of the Shareholder Representative as being the decision, act, consent or instruction of the Securityholders. The Purchaser is hereby relieved from any Liability to any Person for any acts done or omissions by the Purchaser in accordance with such decision, act, consent or instruction of the Shareholder Representative. Without limiting the generality of the foregoing, the Purchaser is entitled to rely, without inquiry, upon any document delivered by the Shareholder Representative shall have full power as being genuine and authority to: from correct and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before having been duly signed or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated sent by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes .
(including hiring counsel and other litigation assistance and including in court of law d) The Shareholder Representative will have no Liability to any Person for any act done or any other legal proceeding) and to receive all notices, requests and demands that may be made omitted under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with as the Shareholder Representative while acting in respect good faith and not in a manner constituting gross negligence or willful misconduct, and any act done or omitted pursuant to the advice of counsel will be conclusive evidence of such good faith. The Securityholders will severally indemnify and hold harmless the Shareholder Representative from and against any Losses the Shareholder Representative may suffer as a result of any matter arising under such action or omission.
(e) The Shareholder Representative will receive no compensation for services as the Transaction DocumentsShareholder Representative. The Securityholders will reimburse, on a pro rata basis in proportion to their interest in the Merger Consideration, the Shareholder Representative for professional fees and expenses of any attorney, accountant or other advisors retained by the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken Shareholder Representative and other reasonable out-of-pocket expenses incurred by the Shareholder Representative in connection with such matters. By virtue the performance of executing or adopting the Shareholder Representative’s duties under this Agreement, each Shareholder agrees to ratify .
(f) This appointment and confirm, grant of power and hereby ratifies and confirms, any action taken authority by the Shareholder Representative in the exercise of the power of attorney granted Securityholders to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being 11.1 is coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority consideration of the voting power of the Company on an as converted basis shall designate mutual covenants made in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, is irrevocable and may not be terminated by the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative act of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder or by operation of Law, whether upon the death or incapacity of any Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out occurrence of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4event.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each (a) Each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably authorizes, constitutes and appoints N▇▇▇ ▇▇▇▇▇ the Person identified in Exhibit 12 attached hereto as such “Shareholder Representative” as such Shareholder’s representative (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, such Shareholder’s true and lawful agentattorney in fact, representative and attorney-in-fact for and to act on such Shareholder’s behalf in the absolute discretion of all Shareholders, and each of them, Shareholder Representative with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant relating to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, including execution and such portion delivery of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8any amendment, in accordance with the Waterfall and in accordance with the terms and conditions supplement, or modification of this Agreement and any other Transaction Document and any waiver of any claim or right arising out of this Agreement and giving and receiving all notices pursuant to this Agreement; and in general, to do all things and to perform all acts, including executing and delivering all agreements, certificates, receipts, instructions, and other instruments contemplated by or deemed advisable to effectuate the provisions of this Section 5.09 (Shareholder Representative), including the exercise of the power to:
(i) give and receive notices and communications;
(ii) agree to, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to claims for indemnification made by Buyer;
(iii) litigate, arbitrate, resolve, settle or compromise any claim for indemnification or Earn Out Payments;
(iv) execute and deliver all documents necessary or desirable to carry out the intent of this Agreement, including the Escrow Agreement;
(v) make all elections or decisions contemplated by this Agreement and any Transaction Document; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing and,
(including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to vi) take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in good faith judgment of Shareholder Representative for the Shareholder Representative’s discretion all indemnification disputes accomplishment of the foregoing
(including hiring counsel and other litigation assistance and including in court of law or any other legal proceedingb) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser Buyer shall be entitled to deal exclusively with the Shareholder Representative in respect on all matters relating to this Agreement and shall be entitled to rely conclusively (without further evidence of any matter arising under the Transaction Documentskind whatsoever) on any document executed or purported to be executed on behalf of any Shareholder by Shareholder Representative, and on any other action taken or purported to be taken on behalf of any Shareholder by Shareholder Representative, as being fully binding upon such Person. Notices or communications to or from Shareholder Representative shall constitute notice to or from each of the Shareholders. Any decision or action by Shareholder Representative hereunder, in their relationship with including any agreement between Shareholder Representative and Buyer relating to the Purchaserdefense, payment or settlement of any claims for indemnification hereunder or the amount of any Earn Out Payments, shall constitute a decision or action of all Shareholders and shall be bound by all actions taken by final, binding and conclusive upon each such Person. No Shareholder shall have the Shareholder Representative in connection with such mattersright to object to, dissent from, protest or otherwise contest the same. By virtue The provisions of executing or adopting this AgreementSection, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of including the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2hereby, which power of attorneyare independent and severable, being are irrevocable and coupled with an interest, is irrevocable interest and shall survive the deathnot be terminated by any act of any Shareholder, incapacity either individually or incompetence collectively, or by operation of each such ShareholderLaw, whether by death or other event.
4.3. (c) The Shareholder Representative may resign at any time. Should , and may be removed for any reason or no reason by the Shareholder Representative die, become legally incapacitated vote or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve written consent of a majority in his or her stead, interest of the Shareholders who have held, according to each Shareholder’s percentage ownership in the Company immediately prior to the ClosingFirst Closing (the “Majority Holders”); provided, the majority of the voting power of the Company on an as converted basis however, in no event shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as resign or be removed without the successor Shareholder Representative hereunder. If at any time there shall not be Majority Holders having first appointed a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The who shall assume such duties immediately upon the resignation or removal of Shareholder Representative’s engagement shall terminate following . In the completion event of all the death, incapacity, resignation or removal of Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The , a new Shareholder Representative shall not be liable to appointed by the Shareholders for any act done vote or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate written consent of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwiseMajority Holders. The Shareholders acknowledge and agree that, if a Shareholder is available that the foregoing indemnities will survive the resignation or removal is also an employee of the Company, any Shareholder Representative appointed hereunder must at the time of such appointment be an employee of the Company and shall be deemed to have immediately resigned such appointment upon the effective date of any cessation of employment with the Company. Notice of such vote or a copy of the written consent appointing such new Shareholder Representative shall be sent to Buyer, such appointment to be effective upon the later of the date indicated in such consent or the termination date such notice is received by Buyer; provided, that until such notice is received, Buyer shall be entitled to rely on the decisions and actions of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the prior Shareholder Representative under this Section 4.4as described in subsection (b) above.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption (i) For purposes of this Agreement, each Shareholder irrevocably approves the constitution and Company Shareholders, without any further action on the part of any such Company Shareholder, shall be deemed to have consented to the appointment of, and hereby irrevocably constitutes and appoints Nof ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “Shareholder Representative”) with all as agent and the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholderseach such Shareholder, and each of them, with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, of any and all Shareholders.
4.2. Without limiting actions and the generality making of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent any decisions required or permitted to disburse amounts paid to the Paying Agent in accordance with the Waterfall and be taken by him under this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power (i) to give and receive notices and communications, (ii) to authorize delivery to Parent of attorney granted the Escrowed Consideration in satisfaction of claims by Parent, to object to such delivery, to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such claims, (iii) authorize delivery to Parent and Merger Sub of the Escrow Amount, or any portion thereof, in satisfaction of Indemnification Claims, and (iv) to take all actions necessary or appropriate in the judgment of the Shareholder Representative pursuant for the accomplishment of the foregoing. Such agency may be changed by the holders of a majority in interest of the Escrowed Consideration from time to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3time. The Shareholder Representative may resign at any timeshall serve as the Indemnification Representative as defined in the Escrow Agreement. Should No bond shall be required of the Shareholder Representative, and the Shareholder Representative die, become legally incapacitated shall receive no compensation for his services. Notices or bankrupt, dissolve, liquidate communications to or otherwise similarly be unable from the Shareholder Representative shall constitute notice to or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power from each of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder)Shareholders.
4.4. (ii) The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice other than for acts or omissions of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderwillful misconduct or gross negligence. The Company Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative him harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of his duties hereunder, including the cost of any accounting firm or legal counsel retained by the Representative on behalf of the Company Shareholders.
(iii) The Shareholder Representative shall have reasonable access to information about the Company and/or the Surviving Company reasonable assistance of the Company’s and/or Surviving Company’s officers and employees for purposes of performing his duties and exercising his rights hereunder, provided that the Shareholder Representative’s duties hereunder Representative shall treat confidentially and under not disclose any nonpublic information from or about the Transaction Documents Company and/or the Surviving Company to any Person (collectivelyexcept on a need to know basis to individuals who agree to treat such information confidentially).
(iv) A decision, “act, consent or instruction of the Shareholder Representative Losses”)shall constitute a decision of all Company Shareholders entitled to the Escrowed Consideration, and shall be final, binding and conclusive upon each such Company Shareholder, and the Escrow Agent and Parent may rely upon any decision, act, consent or instruction of the Shareholder Representative as being the decision, act, consent or instruction of each and every such Company Shareholder. To the extent that either the Escrow Agent or Parent acts in each case as such Representative Loss is suffered accordance with a decision, act, consent or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part instruction of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable Escrow Agent and Parent are hereby relieved from any liability with respect to such fraudact, willful misconductto any Person, gross negligence or bad faith. If not paid directly to including the Shareholder Representative by the Company Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5(v) The Company Shareholders shall retain full voting power over all shares of Parent Common Stock held as Escrowed Consideration. The Purchaser shall not be liable to Any cash dividends, dividends payable in securities or other distributions of any Shareholder for kind (but excluding any act done shares of Parent Common Stock received upon a stock split or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 stock dividend), shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered promptly distributed by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion beneficial holder of the Shareholder Representative’s responsibilitiesEscrow Shares to which such distribution relates in accordance with the Distribution Schedule. All amounts remaining in the Expense Fund upon termination Any shares of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered Parent Common Stock received by the Escrow Agent upon a stock split made in respect of any securities in the Escrowed Consideration shall be added to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7Escrowed Consideration and become a part thereof. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the The provisions of this Section 4 shall apply, mutatis mutandis, be adjusted to the Company (as if it was a Shareholder Representative)appropriately reflect any stock split or reverse stock split.
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and The Escrow Shareholders hereby irrevocably constitutes authorize, direct and appoints N▇▇▇ ▇▇▇▇▇ appoint the Shareholder Representative (as defined in the “Shareholder Representative”Escrow Agreement) with all the rights, powers as sole and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful exclusive agent, representative and attorney-in-fact for and on behalf representative of all Shareholderssuch Persons and such Persons' heirs, representatives and each of them, with respect successors to (i) take any and all matters arising out actions (including without limitation executing and delivering any documents), incurring any costs and expenses for the account of the Escrow Shareholders and making any and all determinations which may be required or permitted to be taken by the Escrow Shareholders in connection with this Agreement Article IX; and (excluding pursuant ii) exercise such rights, power and authority as are incidental to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreementforegoing. All Any actions, noticesexercises of rights, communications power or authority and any decisions or determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative shall be absolutely and all irrevocably binding on each of the Escrow Shareholders as if each such actionsPerson personally had taken such action, noticesexercised such rights, power or authority or made such decision or determination in such Person's individual capacity.
(a) With respect to the matters covered by or related to this Article IX, (i) each Escrow Shareholder irrevocably relinquishes its right to act independently and determinations by other than through the Shareholder Representative shall conclusively be deemed with respect to have been authorized bysuch subject matter (except with respect to the appointment of a successor Shareholder Representative), and (ii) no Escrow Shareholder shall be binding uponhave right to institute any suit, action or proceeding against HPL, Merger Sub, the Surviving Corporation or FabCentric or the with respect to any such matter, any such right being irrevocably and all Shareholders.
4.2exclusively delegated to the Shareholder Representative. Without limiting the generality of the foregoing, any notice hereunder delivered to HPL or an Indemnitee by an Escrow Shareholder other than through the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreementbe of no effect, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated each notice delivered by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law HPL or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted Indemnitee to the Shareholder Representative pursuant shall be effective as against each Escrow Shareholder; provided, that HPL and other Indemnitees may elect at their sole discretion to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such give effect to any notice delivered by any Escrow Shareholder.
4.3. (b) The Shareholder Representative may resign at any timetime upon thirty days' notice by submitting a written resignation to HPL, with copies to all Escrow Shareholders at their address set forth in the Escrow Agreement. Should In the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority event of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased death, physical or legally incapacitated mental incapacity or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part resignation of the Shareholder Representative, the Shareholder Representative will reimburse the Escrow Shareholders the amount shall promptly (and in any event with thirty (30) days of notice of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (ievent) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the appoint a successor Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).ARTICLE X
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of (a) Prior to the execution or adoption of this AgreementClosing Date, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ Shareholders shall select a Person (the “"Shareholder Representative”") with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact to act for and on behalf of all Shareholders, and each of them, such Shareholders with respect to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, Article 8 and the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionsas defined in Section 9.1(i), notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, the power and authority, in his or her sole discretion, to:
(i) negotiate, determine, defend and settle any dispute which may arise under Article 8 or the Escrow Agreement; and
(ii) make, the Payment Agent Agreementexecute, share transfer deeds acknowledge and endorsements deliver any releases, assurances, receipts, requests, instructions, notices, agreements, certificates and termination instruments and including amendments that may require price reductions or holdbacks); any other instruments, and to grant, provide, negotiate generally do any and sign all waivers, consents, instructions and authorizations things and to take any and all other actions called which may be requisite, proper or advisable in connection with Article 8 or under the Escrow Agreement.
(b) The Shareholders may replace the Shareholder Representative at any time with a substitute Shareholder Representative who shall have all the powers and responsibilities of the Shareholder Representative set forth in this Section 6.10.
(c) Neither the Shareholder Representative, nor any substitute Shareholder Representative, shall be liable to any Person for under any action taken or contemplated by or that may otherwise be necessary or appropriate any omission to act, in good faith, in connection with the Transaction Documents; and to prosecuteShareholder Representative's responsibilities as Shareholder Representative.
(d) Promptly following his or her selection, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law , or any other legal proceeding) substitute Shareholder Representative, shall provide Parent with a written certification of his or her selection and of the address for notices to receive all notices, requests and demands that such Shareholder Representative. Parent may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to thereafter deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship connection with the Purchaser, shall be bound by all actions taken by the Shareholder Representative claims procedure in reliance on such certification. Whenever in connection with such matters. By virtue the provisions of executing this Agreement or adopting this the Escrow Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, Parent shall receive any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity certificate or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a other written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as correspondence from the Shareholder Representative, except such certificate or other written correspondence shall be full authorization to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and Parent for any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share taken or suffered in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred good faith by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and it under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to Agreement or the Company (as if it was a Shareholder Representative)Escrow Agreement in reliance thereon.
Appears in 1 contract
Shareholder Representative. 4.1. By virtue (a) Each of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and Closing Date Principal Shareholders hereby irrevocably constitutes appoints Riverstone/Carlyle Global Energy and appoints N▇▇▇ ▇▇▇▇▇ Power Fund IV (Cayman), L.P. (the “Shareholder Representative”) with all the rightsas such Closing Date Principal Shareholder’s representative, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative and attorney-in-fact and agent, with full power of substitution to act in the name, place and stead of such Closing Date Principal Shareholder, to act for and on behalf of all Shareholders, and each of them, with respect such Closing Date Principal Shareholder to take any and all matters arising out of actions and make any and all decisions which under this Agreement as to which the Shareholder Representative is expressly authorized to act or make, including the power:
(i) to take any and all action necessary or desirable in connection with this Agreement (excluding pursuant the waiver of any condition to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following obligations of the Closing and taking any action or omitting Date Principal Shareholders to take action on behalf of all Shareholders or each of them hereunder or under consummate the Escrow Agreement or the Paying Agent transactions contemplated by this Agreement. All actions, notices, communications and determinations by or ;
(ii) to receive on behalf of the Closing Date Principal Shareholders notice of all indemnification claims by a Parent Indemnified Party pursuant to Article IX and to notify all Closing Date Principal Shareholders of any such claim and to take all actions in accordance herewith shall connection with such indemnifications claims on behalf of the Closing Date Principal Shareholders as may be given necessary or desirable; and
(iii) to give instructions to the Escrow Agent in connection with the release of the Indemnification Escrow Amount as contemplated by Section 9.6(f). Each of the Closing Date Principal Shareholders hereby consents to and confirms such appointment and the taking by the Shareholder Representative of any and all such acts and the making of any and all such decisions. Each of the Closing Date Principal Shareholders will be bound by any and all actions taken and any and all decisions made by the Shareholder Representative and all such actions, noticespursuant to the terms of this Section 10.3, and determinations by Parent and the Surviving Company will be entitled to rely on any such actions or decisions.
(b) The Shareholder Representative shall conclusively will not be deemed to have been authorized by, and shall be binding upon, liable for any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and act taken or omitted by it as permitted under this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, except if taken or omitted in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before bad faith or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect of any matter arising under the Transaction Documents, and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3willful misconduct. The Shareholder Representative may resign at will also be fully protected in relying upon any time. Should written notice, demand, certificate or document that it in good faith believes to be genuine (including facsimiles thereof).
(c) The Closing Date Principal Shareholders agree, severally but not jointly, to indemnify the Shareholder Representative diefor, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling and to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against against, any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, without willful misconduct, gross negligence misconduct or bad faith on the part of the Shareholder Representative, arising out of or in connection with the Shareholder Representative’s carrying out its duties under this Agreement, including costs and expenses of successfully defending the Shareholder Representative will reimburse the Shareholders the amount against any claim of such indemnified Representative Loss to liability with respect thereto. To the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative is entitled to any amount as a result of an indemnity claim under this Section 10.3(c), such amount shall be paid by the ShareholdersClosing Date Principal Shareholders pro rata based on each Closing Date Principal Shareholder’s relative percentage ownership of the aggregate amount of Outstanding Shares held by the Closing Date Principal Shareholders at Closing, as set forth opposite such Closing Date Principal Shareholder’s name on Schedule 3.4.
(d) In the event the Shareholder Representative becomes unable or unwilling to continue to serve in the capacity of Shareholder Representative, he may resign and be discharged from his duties and obligations as Shareholder Representative by giving his resignation to each of the Parties, specifying a date not less than ten days following such notice date of when such resignation will take effect and, in that event, Riverstone/Carlyle Energy Partners IV, L.P. will be deemed to be appointed by the Closing Date Principal Shareholders as the new Shareholder Representative and shall, for all purposes of this Agreement, be the Shareholder Representative. In the event Riverstone/Carlyle Energy Partners IV, L.P. then becomes unable or unwilling to continue in its capacity as Shareholder Representative, Riverstone/Carlyle Energy Partners IV, L.P. may resign and be discharged from its duties or obligations hereunder by giving its resignation to each of the Parties, specifying a date not less than ten days following such notice date of when such resignation will take effect. In that event, Closing Date Principal Shareholders representing at least a majority of the Outstanding Shares at the Closing (the “Closing Date Majority”) will designate a successor representative prior to the expiration of such ten-day period by giving written notice to Parent. At any such time, the Closing Date Majority may remove the Shareholder Representative, provided that a successor Shareholder Representative Losses may be recovered is appointed at the same time. Until notified in writing by the Shareholder Representative from (i) that Riverstone/Carlyle Energy Partners IV, L.P. has resigned or by the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds Closing Date Principal Shareholders that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from has been removed, Parent may rely conclusively and act upon the aforementioned sources directions, instructions and notices of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the last known Shareholder Representative from seeking and, after such notice, upon the directions, instructions and notices of any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4successor.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. e) The Shareholder Representative will not be liable for entitled to receive any loss of principal of compensation from Parent, the Expense Fund other than Surviving Company or the Closing Date Principal Shareholders in connection with performing its functions as a result of its gross negligence or willful misconduct. The the Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcyunder this Agreement. The amounts deposited in the Expense Fund shall be available for the payment of all fees Any out-of-pocket costs and expenses reasonably incurred by the Shareholder Representative in performing its duties under connection with actions taken pursuant to the terms of this Agreement and will be paid by the agreements ancillary hereto; provided that any portion Closing Date Principal Shareholders pro rata based on each Closing Date Principal Shareholder’s relative percentage ownership of the Expense Fund not ultimately required for the payment aggregate amount of such fees and expenses shall be delivered Outstanding Shares held by the Escrow Agent to the Paying Agent for further distribution to the Closing Date Principal Shareholders based at Closing, as set forth opposite such Closing Date Principal Shareholder’s name on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallSchedule 3.4.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) (x) By virtue of the execution or adoption approval of the Merger and this AgreementAgreement by the requisite vote of the Shareholders, each Shareholder irrevocably approves of the constitution and appointment of, and hereby irrevocably constitutes and appoints NShareholders shall be deemed to have agreed to appoint ▇▇▇▇▇▇ ▇▇▇▇▇ (the “Shareholder Representative”) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative its agent and attorney-in-fact fact, and (y) by virtue of the return of the Option Waiver and receipt of consideration in connection with their Company In the Money Options, each Optionholder shall be deemed to have agreed to appoint ▇▇▇▇▇▇ ▇▇▇▇▇ as its agent and attorney-in-fact, in each case as the Shareholder Representative for and on behalf of the Shareholders and Optionholders to take all Shareholdersactions under this Agreement that are to be taken by the Shareholder Representative, including to amend this Agreement, to waive any provision of this Agreement, to negotiate payments due pursuant to this Article VI, to give and receive notices and communications, to authorize payment to any Indemnified Party, including reductions in the Contingent Consideration pursuant to Section 6.3, in satisfaction of claims by any Indemnified Party, to object to such payments, to agree to, negotiate, enter into settlements and compromises of, and each comply with orders of them, courts with respect to such claims, to assert, negotiate, enter into settlements and compromises of, and comply with orders of courts with respect to, any other claim by any Indemnified Party against any Shareholder or Optionholder or by any such Shareholder or Optionholder against any Indemnified Party or any dispute between any Indemnified Party and all matters arising out of any such Shareholder or Optionholder, in connection with each case relating to this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actionstransactions contemplated hereby, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be are either (i) necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court judgment of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with the Shareholder Representative in respect for the accomplishment of any matter arising under the Transaction Documentsforegoing or (ii) specifically mandated by the terms of this Agreement. Such agency may be changed by the Shareholders and Optionholders from time to time upon not less than thirty (30) days prior written notice to Parent; provided, and the Shareholdershowever, in their relationship with the Purchaser, shall be bound by all actions taken by that the Shareholder Representative may not be removed unless Shareholders and Optionholders holding an amount equal to at least two-thirds in connection with interest of the Contingent Consideration agree to such mattersremoval and to the identity of the substituted agent. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative A vacancy in the exercise position of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign be filled by the Shareholders and Optionholders holding an amount equal to at any timeleast two-thirds in interest of the Contingent Consideration. Should In the event a vacancy in the position of Shareholder Representative dieexists for fifteen (15) or more days, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling Parent shall have the right to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The replacement Shareholder Representative’s engagement . No bond shall terminate following the completion be required of all the Shareholder Representative’s responsibilities under , and the Shareholder Representative shall not receive any compensation for his services; provided, however, that the Shareholder Representative shall be entitled to reimbursement of his expenses from the Shareholder Representative Fund. Notices or communications to or from the Shareholder Representative shall constitute notice to or from the Shareholders and Optionholders.
(b) The Shareholder Representative represents and warrants to Parent, the Shareholders and the Optionholders that he has the irrevocable right, power and authority (i) to enter into and perform this Agreement (including with respect and to potential or contingent liabilities bind each of the Shareholders hereunderand Optionholders to its terms, (ii) to give and receive directions and notices hereunder and (iii) to make all determinations that may be required or that he deems appropriate under this Agreement.
(c) Until notified in writing by the Shareholder Representative that he has resigned, or that he has been removed by Shareholders holding an amount equal to at least two-thirds in interest of the Contingent Consideration, Parent may rely conclusively and act upon the directions, instructions and notices of the Shareholder Representative named above and, thereafter, upon the directions, instructions and notices of any successor named in a writing executed by Shareholders and Optionholders holding an amount equal to at least two-thirds in interest of the Contingent Consideration. If for any reason there is no Shareholder Representative at any time, all references herein to the Shareholder Representative shall be deemed to refer to the Shareholders and Optionholders until a Shareholder Representative is appointed pursuant to Section 6.5(a).
4.4. (d) The Company, the Shareholders and the Optionholders each hereby authorize the Shareholder Representative to:
(i) Receive all notices or documents given or to be given to the Shareholders and Optionholders pursuant hereto or in connection herewith or therewith and to receive and accept services of legal process in connection with any suit or proceeding arising under this Agreement;
(ii) Engage counsel, and such accountants and other advisors and incur such other expenses in connection with this Agreement and the transactions contemplated hereby or thereby as the Shareholder Representative may in his sole discretion deem appropriate; and
(iii) Take such action as the Shareholder Representative may in his sole discretion deem appropriate in respect of: (A) waiving any inaccuracies in the representations or warranties of Parent or Sub contained in this Agreement or in any document delivered by Parent or Sub pursuant hereto; (B) taking such other action as the Shareholder Representative is authorized to take under this Agreement; (C) receiving all documents or certificates and making all determinations, in his capacity as Shareholder Representative, required under this Agreement; and (D) all such actions as may be necessary to carry out any of the transactions contemplated by this Agreement, including, without limitation, the defense and/or settlement of any claims for which indemnification is sought pursuant to this Article VI and any waiver of any obligation of Parent or the Surviving Corporation.
(iv) Administer the Shareholder Representative Fund and pay any and all third-party expenses of the Shareholder Representative incurred in furtherance of his duties hereunder.
(e) The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on while acting in good faith and in the advice exercise of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunderreasonable judgment. The Shareholders and Optionholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or bad faith on the fees and expenses part of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder hereunder, including the reasonable fees and under expenses of any legal counsel retained by the Transaction Documents (collectivelyShareholder Representative. A decision, “Representative Losses”)act, in each case as such Representative Loss is suffered consent or incurredinstruction of the Shareholder Representative, including but not limited to an amendment, extension or waiver of this Agreement, shall constitute a decision of the Shareholders and Optionholders and shall be final, binding and conclusive upon the Shareholders and Optionholders; provided, that in the event that and Parent may rely upon any such decision, act, consent or instruction of the Shareholder Representative Loss as being the decision, act, consent or instruction of the Shareholders and Optionholders. Parent is finally adjudicated hereby relieved from any liability to have been directly caused any person for any decision, act, consent or instruction of the Shareholder Representative.
(f) On the Closing Date, Parent shall deposit with a third party bank to be appointed by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent provide for the benefit reimbursement of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its connection with the performance of his duties under this Agreement Agreement. The deposit of the Shareholder Representative Fund by Parent to such bank shall completely discharge Parent’s obligations with respect to such amount, and in no event shall Parent have any responsibility or liability whatsoever for the agreements ancillary hereto; provided manner in which the Shareholder Representative administers the Shareholder Representative Fund, or for causing or ensuring that all or any portion of the Expense Shareholder Representative Fund not is ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution paid or distributed to the Shareholders and Optionholders.
(g) Upon the later of the Contingent Consideration Payment Date or the final resolution of any Objection Notice submitted with respect to a claim made in an Officer’s Certificate prior to the Contingent Consideration Payment Date, the Shareholder Representative shall distribute any funds remaining in the Shareholder Representative Fund to the Shareholders and Optionholders on a pro rata basis (based on the Waterfall following amount the Merger Consideration to which each Shareholder and Optionholder is otherwise entitled pursuant to Section 1.6). Any amounts due to Optionholders who are employees of the Surviving Corporation on the Contingent Consideration Payment Date shall be paid by the Shareholder Representative to the Surviving Corporation for payment to the Optionholders. Upon completion of the distribution of the Shareholder Representative Fund, the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (duties and following the completion of the Shareholder Representative’s responsibilities) authority hereunder shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallcease.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. (a) By virtue of the execution or adoption vote of the Shareholders approving the Merger and adopting this Agreement, each Shareholder irrevocably approves and without any further act of any of the constitution Shareholders, Parent is hereby appointed, authorized and appointment ofempowered to act, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (for the “Shareholder Representative”) with all benefit of the rightsShareholders, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 as the sole, exclusive, true and lawful agent, representative exclusive agent and attorney-in-fact to act on behalf of each Shareholder, in connection with and to facilitate the consummation of the transactions contemplated hereby, including pursuant to the Ancillary Agreements (in such capacity, the “Representative”), which shall include the power and authority:
(i) to execute and deliver the Ancillary Agreements to which it is a party (with such modifications or changes therein as to which the Representative, in its sole discretion, shall have consented) and to agree to such amendments or modifications thereto as the Representative, in its sole discretion, determines to be desirable;
(ii) to negotiate, execute and deliver such waivers, modifications, amendments, consents and other documents required or permitted to be given in connection with this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby as the Representative, in its sole discretion, may deem necessary or desirable;
(iii) to take any action on behalf of the Shareholders or any individual Shareholder that may be necessary or desirable, as determined by the Representative in its sole discretion, in connection with negotiating or entering into settlements, resolutions and compromises with respect to the adjustments or payments contemplated by Section 2.8;
(iv) to collect and receive all moneys and other proceeds and property payable to the Representative or the Shareholders, as applicable, from Buyer as described herein or in the Ancillary Agreements, and, subject to any applicable withholding retention laws, and net of any out-of-pocket expenses incurred by the Representative, the Representative shall disburse and pay, except as otherwise provided hereunder, any amount payable to the Shareholders to each of the Shareholders to the extent of such Shareholder’s Pro Rata Share of such amount;
(v) to enforce and protect the rights and interests of the Shareholders and to enforce and protect the rights and interests of the Representative arising out of or under or in any manner relating to this Agreement and the Ancillary Agreements, and each other agreement, document, instrument or certificate referred to herein or therein or the transactions provided for herein or therein, and to take any and all actions which the Representative believes are necessary or appropriate under the Ancillary Agreements or this Agreement, including actions in connection with the determination of any payment due hereunder or thereunder for and on behalf of all the Shareholders, including (A) assert any claim or institute any Proceeding; (B) investigate, defend, contest or litigate any Proceeding initiated by Buyer, any Affiliate of Buyer, or any other Person, or by any federal, state or local Governmental Entity against the Representative or any of the Shareholders, and each receive process on behalf of themany or all Shareholders in any such Proceeding and compromise or settle on such terms as the Representative shall determine to be appropriate, and give receipts, releases and discharges with respect to, any such Proceeding; (C) file any proofs of debt, claims and petitions as the Representative may deem advisable or necessary; (D) settle or compromise any claims asserted under this Agreement or the Ancillary Agreements; and (E) file and prosecute appeals from any decision, judgment or award rendered in any such Proceeding, it being understood that the Representative shall not have any obligation to take any such actions, and all matters shall not have any liability for any failure to take any such actions;
(vi) to refrain from enforcing any right of any Shareholders or the Representative arising out of or under or in any manner relating to this Agreement, the Ancillary Agreements or any other agreement, instrument or document in connection with the foregoing; provided, however, that no such failure to act on the part of the Representative, except as otherwise provided in this Agreement, shall be deemed a waiver of any such right or interest by the Representative or by such Shareholders unless such waiver is in writing signed by the waiving party or by the Representative; and
(vii) to make, execute, acknowledge, deliver and receive all such other agreements, guarantees, orders, receipts, endorsements, notices, requests, instructions, certificates, stock powers, letters and other writings, and, in general, to do any and all things and to take any and all action that the Representative, in its sole and absolute discretion, may consider necessary or proper or convenient in connection with or to carry out the transactions contemplated by this Agreement, the Ancillary Agreements, and all other agreements, documents or instruments referred to herein or therein or executed in connection herewith and therewith.
(b) All actions, decisions and instructions of the Representative shall be conclusive and binding upon all of the Shareholders and no Shareholders or any other Person acting on behalf of any Shareholders shall have any claim or cause of action against the Representative, and the Representative shall have no liability to any Shareholders or any other Person acting on behalf of any Shareholders, for any action taken, decision made or instruction given by the Representative in connection with this Agreement (excluding pursuant to Section 10.2)or any Ancillary Agreements, except in the case of the Representative’s own gross negligence or intentional misconduct. In the performance of its duties hereunder, the Paying Agent AgreementRepresentative shall be entitled to rely upon any document or instrument reasonably believed by it to be genuine, accurate as to content and signed by any Shareholders, Buyer or any other Person. The Representative may assume that any Person purporting to give any notice in accordance with the Escrow provisions hereof has been duly authorized to do so.
(c) The Representative shall have such powers and authority as are necessary or appropriate to carry out the functions assigned to it under this Agreement and in any other document delivered in connection herewith; provided, however, that the agreements ancillary hereto following the Closing and taking any action or omitting Representative shall have no obligation to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or act on behalf of the Shareholders in accordance herewith Shareholders. The Representative shall be given entitled to engage such counsel, experts and other agents and consultants as it shall deem necessary in connection with exercising its powers and performing its function hereunder and (in the absence of willful misconduct on the part of the Representative) shall be entitled to conclusively rely on the opinions and advice of such Persons. Notwithstanding anything to the contrary contained herein, the Representative in its capacity as such shall have no fiduciary duties or made responsibilities to any Shareholders or the Company or its Subsidiaries and no duties or responsibilities except for those expressly set forth herein, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on behalf of any Shareholders shall otherwise exist against or with respect to the Representative in its capacity as such.
(d) In no event shall the Representative be liable hereunder or in connection herewith for any Non-Reimbursable Damages or for any liabilities resulting from the actions of a Shareholders other than the Representative acting in its capacity as such. Buyer shall have the right to rely upon all actions taken or omitted to be taken by the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed pursuant to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign Ancillary Agreements, all documents in connection with the Transaction and amendments thereto, whether before of which actions or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser omissions shall be entitled to deal exclusively legally binding upon the Shareholders. The grant of authority provided for herein (i) is coupled with the Shareholder Representative in respect an interest and shall be irrevocable by any act of any matter arising under the Transaction Documents, Shareholder or by operation of Law and the Shareholders, in their relationship with the Purchaser, shall be bound by all actions taken by the Shareholder Representative in connection with such matters. By virtue of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the indemnities, immunities, authority and power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and hereunder shall survive the death, incapacity incompetency, bankruptcy or incompetence liquidation of each such Shareholderany Shareholder and (ii) shall survive the Closing or any termination of this Agreement or any Ancillary Agreement.
4.3. (e) The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. The Shareholder Representative shall not be liable to the Shareholders for any act done or omitted hereunder or under any Ancillary Agreement as Representative while acting in its capacity as the good faith. Each Shareholder Representativeshall, except to the extent caused by of its willful misconductPro Rata Share, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, indemnify the Shareholder Representative may rely on the advice of counsel and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, liability or expense (including incurred without gross negligence or willful misconduct on the fees part of the Representative or any of its Affiliates and expenses any of counsel and experts and their staffs and all expense of document locationrespective partners, duplication and shipment)members, attorneys, accountants, advisors or actions incurred by the Shareholder Representative controlling Persons and arising out of or in connection with the acceptance, performance acceptance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”including pursuant to any Ancillary Agreement), in each case as such Representative Loss is suffered or incurred; provided, that in including the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the reasonable fees and expenses of any legal counsel retained by the Shareholder Representative incurred Representative. Buyer (on its behalf and on behalf of its Affiliates, including, after the Closing, the Company) acknowledges that the Representative, in connection with its capacity as the representative pursuant to this Section 10.5 (and not, for the avoidance of doubt, in its capacity as “Parent” hereunder), is party to this Agreement solely for purposes of serving as the “Representative” hereunder and no claim shall be brought by or on behalf of Buyer or any of its Affiliates (including, after the Closing, the Company) against the Representative in its capacity as such with respect to this Agreement or the agreements ancillary hereto or transactions contemplated hereby or any certificate, opinion, instrument or other documents delivered hereunder (with it being understood that any covenant or agreement of or by the “Expense Fund”). All amounts deposited Parties” or “each of the Parties” at or prior to the Expense Fund Closing shall not be treated deemed to require performance by, or be an agreement of, the Representative unless performance by the Representative is expressly provided for all purposes as having been paid at Closing in such covenant or the Representative expressly so agrees).
(f) Upon written notice from the Representative to the Shareholders and received and voluntarily set aside by delivered within two (2) years following the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign , each Shareholder shall promptly deliver to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the full payment of such Shareholder’s Pro Rata Share of all out-of-pocket fees and expenses (including legal, accounting and other advisors’ fees and expenses, if applicable) reasonably incurred by the Shareholder Representative in performing its duties any actions under this Agreement and or the agreements ancillary heretoAncillary Agreements; provided that any portion no Shareholder shall be liable for an amount in excess of its Pro Rata Share of the Expense Fund Aggregate Stockholder Consideration Value.
(g) Any resignation by the Representative shall not ultimately required for be effective until a new Representative shall be appointed by Persons who hold a majority of the payment Shares (or Shareholders who held a majority of the Shares immediately prior to the Effective Time, if the Closing has occurred) and has confirmed his, her or its acceptance of such fees and expenses shall be delivered by the Escrow Agent appointment in writing to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the WaterfallBuyer.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Sources: Merger Agreement (Invesco Ltd.)
Shareholder Representative. 4.1. By virtue (a) The Shareholders and the DolEx Class B Shareholders hereby agree and acknowledge that the Shareholder Representative shall act as an agent of the execution or adoption of Shareholders and the DolEx Class B Shareholders and is entitled with such powers as are delegated under this Agreement, each Shareholder irrevocably approves which shall include the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ power (the “Shareholder Representative”i) with all the rights, powers and obligations contemplated by this Section 4, and any successor Shareholder Representative(s) designated under this Section 4 to act as the sole, exclusive, true and lawful agent, representative and attorney-in-fact for and on behalf of all Shareholders, and each of them, with respect Shareholder or DolEx Class B Shareholder to any and all matters arising out of or in connection with this Agreement (excluding pursuant to Section 10.2), execute the Paying Agent Escrow Agreement, the Escrow Agreement Earnout Agreement, and the agreements ancillary hereto following the Closing any Company Ancillary Agreement, (ii) to give and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, receive notices and communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by and the Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and DolEx Class B Shareholders under this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Earnout Agreement, share transfer deeds any Stock Pledge Agreement, and endorsements any Company Ancillary Agreement, (iii) to waive provisions of any such agreements, (iv) to update the Schedules to this Agreement and termination instruments provide same to Parent, (v) to authorize delivery to the Parent Group Members of the funds or other property pursuant to the Escrow Agreement in satisfaction of claims by Parent Group Members, (vi) to object to any Claim Notice, (vii) to conduct, control and including amendments that may require price reductions or holdbacks); cooperate with respect to the defense of the litigation described in Article X herein, (viii) to agree to, negotiate, enter into settlements and compromises of, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to grantsuch claims, provide, negotiate and sign all waivers, consents, instructions and authorizations and (ix) to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; judgment of the Shareholder Representative for the accomplishment of the foregoing and to prosecute, defend otherwise act on behalf of the Shareholders and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant DolEx Class B Shareholders with respect to this Agreement, the Paying Agent Escrow Agreement, the Earnout Agreement, any Stock Pledge Agreement and any Company Ancillary Agreement and the Escrow Agreement. From transactions contemplated hereby and after thereby, each of which the ClosingShareholders and the DolEx Class B Shareholders have received, the Purchaser shall be entitled to deal exclusively with reviewed and approved in their execution form.
(b) A decision, act, consent or instruction of the Shareholder Representative in respect accordance with Section 12.13(a) shall constitute a decision of any matter arising under the Transaction Documentsall Shareholders and all DolEx Class B Shareholders and shall be final, binding and conclusive upon each such Shareholder or DolEx Class B Shareholder, and the ShareholdersParent may rely upon any decision, in their relationship with the Purchaseract, shall be bound by all actions taken by consent or instruction of the Shareholder Representative as being the decision, act, consent or instruction of each and every such Shareholder and DolEx Class B Shareholder. Each Parent Group Member is hereby relieved from any liability to any Person for any acts done by them in connection accordance with such matters. By virtue decision, act, consent or instruction of executing or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence of each such Shareholder.
4.3. The Shareholder Representative may resign at any time. Should the Shareholder Representative die, become legally incapacitated or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, the Shareholders who have held, immediately prior to the Closing, the majority of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. (c) The Shareholder Representative shall not be liable to the Shareholders or the DolEx Class B Shareholders for any act done or omitted hereunder in its capacity as the Shareholder Representative, except to the extent caused by its willful misconduct, gross negligence or bad faith. In all questions arising in respect of any matter arising under this Agreement, the Shareholder Representative may rely on the advice of counsel while acting in good faith and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense (including the fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part exercise of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholdersreasonable judgment, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by pursuant to the Shareholder Representativewritten advice of counsel shall be conclusive evidence of such good faith.
4.6. A total of US$100,000 (d) Neither Parent nor any Parent Group Member shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent responsible or liable for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses any acts or omissions of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties under this Agreement and the agreements ancillary hereto; provided that any portion of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfallcapacity as such.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this Agreement, including the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative).
Appears in 1 contract
Shareholder Representative. 4.1. By virtue of the execution or adoption of this Agreement, each Shareholder irrevocably approves the constitution and appointment of, and hereby irrevocably constitutes and appoints N▇▇▇ ▇▇▇▇▇ (a) The Shareholders shall at all times maintain a representative (the “Shareholder Representative”) with all for purposes of taking certain actions and giving certain consents on behalf of the rightsShareholders, powers and obligations contemplated by this Section 4as specified herein. Pursuant to the Company Shareholder Agreement, the Major Shareholders appointed ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Representative, LLC, as the initial Shareholder Representative, and immediately upon the approval of this Agreement by the requisite vote or written consent of the Shareholders, each other Shareholder shall be deemed to have consented to such appointment (or any applicable successor) and the terms hereof. Another person shall be appointed as the Shareholder Representative if the person so designated (or any successor thereof) is unwilling or unable to so act. Actions taken, consents given and representations made by the Shareholder Representative(s) designated Representative pursuant hereto shall be final, binding and conclusive upon the Shareholders, including all actions under this Section 4 as Article VII and under the soleEscrow Agreement and the Company Shareholder Agreement. This appointment and grant of power and authority by each Shareholder is coupled with an interest and is irrevocable and shall not be terminated by any act of any Shareholder or by operation of Law, exclusivewhether by the death or incapacity of any individual Shareholder, true or by the occurrence of any other event. The Shareholder Representative is entitled to authorize delivery to the Parent Indemnified Parties of the funds or other property from the Indemnity Escrow Fund in satisfaction of claims by the Parent Indemnified Parties, to agree to, negotiate, enter into settlements and lawful agentcompromises of, representative and attorney-in-fact for comply with orders of courts and awards of arbitrators with respect to such claims, and to take all actions on behalf of all Shareholders, and each of them, with respect the Shareholders deemed necessary or appropriate in the judgment of the Shareholder Representative to any and all matters arising out of accomplish the foregoing or in connection with to facilitate or administer the transactions contemplated by this Agreement (excluding pursuant to Section 10.2), the Paying Agent Agreement, the Escrow Agreement and the agreements ancillary hereto following the Closing and taking any action or omitting to take action on behalf of all Shareholders or each of them hereunder or under the Escrow Agreement or the Paying Agent Agreement. All actions, notices, communications and determinations by or on behalf of the Shareholders in accordance herewith shall be given or made by the Company Shareholder Representative and all such actions, notices, and determinations by the Shareholder Representative shall conclusively be deemed to have been authorized by, and shall be binding upon, any and all Shareholders.
4.2. Without limiting the generality of the foregoing, the Shareholder Representative shall have full power and authority to: from and after the Closing, direct the Paying Agent to disburse amounts paid to the Paying Agent in accordance with the Waterfall and this Agreement, and such portion of the Escrow Amount as is remaining at the end of the escrow period contemplated under Section 2.8, in accordance with the Waterfall and in accordance with the terms and conditions of this Agreement and the Escrow Agreement; to negotiate and sign all documents in connection with the Transaction and amendments thereto, whether before or after Closing (including, without limitation, Escrow Agreement, the Payment Agent Agreement, share transfer deeds and endorsements and termination executing such other documents or instruments and including amendments that may require price reductions or holdbacks); and to grant, provide, negotiate and sign all waivers, consents, instructions and authorizations and to take all other actions called for under or contemplated by or that may otherwise be necessary or appropriate in connection with the Transaction Documents; and to prosecute, defend and settle in the Shareholder Representative’s discretion all indemnification disputes (including hiring counsel and other litigation assistance and including in court of law or any other legal proceeding) and to receive all notices, requests and demands that may be made under and pursuant to this Agreement, the Paying Agent Agreement and the Escrow Agreement. From and after the Closing, the Purchaser shall be entitled to deal exclusively with as the Shareholder Representative in respect of any matter arising under the Transaction Documentsdeems necessary or appropriate, and provided however, that no such action may incur additional liabilities on the Shareholders, other than as set forth in their relationship with the Purchaserthis Agreement. The Escrow Agent and Parent may rely upon any decision, shall be bound by all actions taken by act, consent or instruction of the Shareholder Representative in connection with such matters. By virtue of executing as being the decision, act, consent or adopting this Agreement, each Shareholder agrees to ratify and confirm, and hereby ratifies and confirms, any action taken by the Shareholder Representative in the exercise of the power of attorney granted to the Shareholder Representative pursuant to this Section 4.2, which power of attorney, being coupled with an interest, is irrevocable and shall survive the death, incapacity or incompetence instruction of each such and every Shareholder.
4.3. The Shareholder Representative may resign at any time. Should , and may be removed for any reason or no reason by the Shareholder Representative die, become legally incapacitated vote or bankrupt, dissolve, liquidate or otherwise similarly be unable or unwilling to serve or to appoint his or her successor to serve in his or her stead, written consent of Shareholders holding a majority of the Shareholders who have held, aggregate Company Ordinary Shares (on an as-converted basis) outstanding immediately prior to the Closing, the majority Effective Time. No bond shall be required of the voting power of the Company on an as converted basis shall designate in writing to Purchaser within five (5) Business Days a single Person to replace the deceased or legally incapacitated or otherwise similarly unable Shareholder Representative as the successor Shareholder Representative hereunder. If at any time there shall not be a Shareholder Representative and the Shareholders fail to designate in writing a successor Shareholder Representative within five (5) Business Days after receipt of a written request delivered by Purchaser to the Shareholders requesting that a successor Shareholder Representative be designated, then Purchaser may petition a court of competent jurisdiction to appoint a Shareholder to act as new Shareholder Representative hereunder. The Shareholder Representative’s engagement shall terminate following the completion of all the Shareholder Representative’s responsibilities under this Agreement (including with respect to potential or contingent liabilities of the Shareholders hereunder).
4.4. (b) The Shareholder Representative shall not be liable to the Shareholders for any act done actions taken pursuant to this Agreement, the Company Shareholder Agreement or omitted hereunder in its capacity as the Shareholder RepresentativeEscrow Agreement, except to the extent caused such actions shall have been determined in a final and non-appealable judgment by its a court of competent jurisdiction to have constituted willful misconductmisconduct or Fraud. Except in cases where a court of competent jurisdiction has made such a finding in a final and non-appealable judgment, gross negligence or bad faith. In the Shareholders shall jointly and severally indemnify and hold harmless, first from the Indemnity Escrow Fund (if any, after payment of all questions arising in respect of any matter arising under this Agreementclaims to which the Parent Indemnified Parties are entitled to payment pursuant to Article VII) and thereafter directly, the Shareholder Representative may rely on the advice of counsel from and any action based upon such reliance shall relieve the Shareholder Representative of any liability hereunder. The Shareholders shall severally and not jointly (based on each Shareholder’s pro rata share in accordance with the Waterfall compared to the pro rata shares of all Shareholders signing this Agreement or otherwise bound hereby; provided that, for the avoidance of doubt, in all cases the aggregate of the Shareholder Representative’s indemnity coverage from the Shareholders signing this Agreement or otherwise bound hereby shall sum to 100%) indemnify and defend the Shareholder Representative and hold the Shareholder Representative harmless against any loss, liability, deficiency, damage, cost, claim, penalty, fine, forfeiture, or expense and all Damages (including the reasonable legal and expert fees and expenses of counsel and experts and their staffs and all expense of document location, duplication and shipment), or actions incurred by the Shareholder Representative and arising out of or in connection with the acceptance, performance or administration of the Shareholder Representative’s duties hereunder and under the Transaction Documents (collectively, “Representative Losses”), in each case as such Representative Loss is suffered or incurred; provided, that in the event that any such Representative Loss is finally adjudicated to have been directly caused by the fraud, willful misconduct, gross negligence or bad faith on the part of the Shareholder Representative, the Shareholder Representative will reimburse the Shareholders the amount of such indemnified Representative Loss to the extent attributable to such fraud, willful misconduct, gross negligence or bad faith. If not paid directly to the Shareholder Representative by the Shareholders, any such Representative Losses may be recovered by the Shareholder Representative from (i) the funds in the Expense Fund, (ii) the funds in the Escrow Amount at such time as such amounts would otherwise be distributable to the Shareholders, and (iii) any other funds that become payable to the Shareholders under this Agreement at such time as such amounts would otherwise be distributable to the Shareholders; provided, that while this section allows the Shareholder Representative to be paid from the aforementioned sources of funds, this does not relieve the Shareholders from their obligation to promptly pay such Representative Losses as they are suffered or incurred, nor does it prevent the Shareholder Representative from seeking any remedies available to it at law or otherwise. In no event will the Shareholder Representative be required to advance its own funds on behalf of the Shareholders or otherwise. The Shareholders acknowledge and agree that the foregoing indemnities will survive the resignation or removal of the Shareholder Representative or the termination of this Agreement. For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, the limitations on liability or indemnification obligations of, or provisions limiting the recourse against non-recourse parties otherwise applicable to, the Shareholders set forth elsewhere in this Agreement (including in Section 10.8) are not intended to be applicable to the indemnities provided to the Shareholder Representative under this Section 4.4.
4.5. The Purchaser shall not be liable to any Shareholder for any act done or omitted hereunder by the Shareholder Representative.
4.6. A total of US$100,000 shall be withheld from amounts otherwise payable at Closing to the Shareholders contributed by the Purchaser on behalf of the Shareholders to the Escrow Agent for an account maintained by the Escrow Agent for the benefit of the Shareholder Representative, for the Escrow Agent to hold on behalf of the Shareholders as a fund for the fees and expenses of the Shareholder Representative incurred in connection with this Agreement and the agreements ancillary hereto (the “Expense Fund”). All amounts deposited to the Expense Fund shall be treated for all purposes as having been paid at Closing to the Shareholders and received and voluntarily set aside by the Shareholders at Closing. The Shareholders will not receive any interest or earnings on the Expense Fund and irrevocably transfer and assign to the Shareholder Representative any ownership right they may otherwise have had in any such interest or earnings. The Shareholder Representative will not be liable for any loss of principal of the Expense Fund other than as a result of its gross negligence or willful misconduct. The Shareholder Representative will hold these funds separate from its corporate funds, will not use these funds for its operating expenses or any other corporate purposes and will not voluntarily make these funds available to its creditors in the event of bankruptcy. The amounts deposited in the Expense Fund shall be available for the payment of all fees and expenses reasonably incurred by the Shareholder Representative in performing its duties investigating or defending (including any appeal) any claim for indemnification made against the Shareholders or Major Shareholders), arising out of and in connection with his or her activities as Shareholder Representative under this Agreement, the Company Shareholder Agreement, the Escrow Agreement and or otherwise.
(c) The approval of this Agreement by the agreements ancillary hereto; provided that any portion requisite vote or written consent of the Expense Fund not ultimately required for the payment of such fees and expenses shall be delivered by the Escrow Agent to the Paying Agent for further distribution to the Shareholders based on the Waterfall following the completion of the Shareholder Representative’s responsibilities. All amounts remaining in the Expense Fund upon termination of the Shareholder Representative’s engagement (and following the completion of the Shareholder Representative’s responsibilities) shall also be delivered deemed to constitute approval of all arrangements relating to the transactions contemplated hereby and to the provisions hereof binding upon the Shareholders, including, without limitation, those set forth in Article VII. All actions taken, consents given and representations made by the Escrow Agent to the Paying Agent for further distribution to Shareholder Representative pursuant hereto shall be binding upon the Shareholders based on after the Waterfall.
4.7. To the extent required in order for the Company to exercise rights on behalf of the Shareholders prior to Closing pursuant to this AgreementClosing, including all actions under Article VII and under the exercise of the right to waive rights or termination this Agreement pursuant to Section 3 above, the provisions of this Section 4 shall apply, mutatis mutandis, to the Company (as if it was a Shareholder Representative)Escrow Agreement.
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Sources: Merger Agreement (Endocare Inc)