Appointment of Stockholders’ Representative. (a) Stockholders’ Representative is hereby designated by each of the Securities Holders to serve as the representative of Securities Holders with respect to the matters set forth in this Agreement to be performed by Stockholders’ Representative. The initial Stockholders’ Representative will be Xxxx XxXxxxx. Should any Stockholders’ Representative resign or be unable to serve, Securities Holders who, immediately prior to the Closing, held more than fifty percent (50%) of the voting power of the Stock (with the Warrants and Company Stock Options being considered on an as-exercised basis) shall be entitled to designate a substitute agent to serve as a successor Stockholders’ Representative, who shall be a Stockholders’ Representative for all purposes thereafter. The appointment of any such successor shall be effective on the date of such Stockholders’ Representative’s resignation or incapacity or, if later, the date on which such successor is appointed. (b) Each Securities Holder, by approving the Merger or delivering Certificates, letters of transmittal or other documentation demonstrating participating in the Merger, hereby irrevocably appoints Stockholders’ Representative as the agent, proxy and attorney-in-fact for such Securities Holder for all purposes of this Agreement, including the full power and authority on such Securities Holder’s behalf (i) to consummate the transactions contemplated herein and any post-Closing matters; (ii) to pay such Securities Holder’s Transaction Expenses (whether incurred on or after the date of this Agreement); (iii) to hold or disburse any funds received hereunder to such Securities Holder and each other Securities Holder; (iv) to endorse and deliver the Certificates or any certificates or instruments representing Company Stock Options and Warrants and execute such further instruments of assignment as GlobalSCAPE may reasonably request; (v) to execute and deliver on behalf of such Securities Holder, any amendment or waiver in connection with this Agreement and the other agreements or documents contemplated hereby as Stockholders’ Representative, in its sole discretion, may deem necessary or desirable; (vi) to make any objection to, defend, negotiate, waive, take no action against or settle any indemnification claims of the GlobalSCAPE Indemnity Group pursuant to this Agreement, or to pay or authorize the payment of funds to the GlobalSCAPE Indemnity Group; (vii) to review, negotiate, dispute, not dispute or approve any Net Working Capital adjustment; (viii) to make any claim on behalf of the Securities Holders Indemnified Parties; (ix) to take all other actions to be taken by or on behalf of such Securities Holder in connection herewith; (x) to do each and every act and exercise any and all rights which such Securities Holder(s) collectively are permitted or required to do or exercise under this Agreement; (xi) to prepare and distribute to each Securities Holder, any documentation necessary or desirable for the filing of income Tax Returns; and (xii) to make, execute, acknowledge and deliver this Agreement and all such other agreements, guarantees, orders, receipts, endorsements, notices, requests, instructions, certificates, letters and other writings, and, in general, to do any and all things and to take any and all action that Stockholders’ 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 and all other agreements and documents referred to herein or therein or executed in connection herewith and therewith, including, without limitation, retaining counsel, accountants and other agents, representatives and experts, incurring fees and expenses, asserting or pursuing any Claim against GlobalSCAPE, the Company and/or any Securities Holder, defending any Claims by GlobalSCAPE or third-party Claims, consenting to, compromising or settling any such Claims, conducting negotiations with GlobalSCAPE, the Company and their respective representatives regarding such Claims, it being understood that Stockholders’ Representative shall not have any obligation to take any such actions, and shall not have any liability for any failure to take any such actions. Notwithstanding anything to the contrary herein, however, Stockholders’ Representative shall not (i) have the power to take any action or actions arising out of any alleged Breach of any representation or warranty made personally by a specific Securities Holder, or (ii) be empowered to grant waivers or execute and deliver amendments to this Agreement or other agreements contemplated hereby if such waiver or amendment materially and adversely impacts holders of a particular class of equity securities, without the consent of holders of a majority of the class of securities so impacted, and GlobalSCAPE hereby acknowledges such limitations. Each Securities Holder agrees that such agency and proxy are coupled with an interest, are therefore irrevocable without the consent of Stockholders’ Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of any Securities Holder. All decisions and actions by Stockholders’ Representative (to the extent authorized by this Agreement) shall be binding upon all Securities Holders, and no Securities Holder shall have the right to object, dissent, protest or otherwise contest the same; provided, however, that Stockholders’ Representative shall not take any such action where (x) any single Securities Holder would be held solely liable for any Losses (without such Securities Holder’s consent) or (y) such action materially and adversely affects the substantive rights or obligations of one Securities Holder, or group of Securities Holders, without a similar proportionate effect upon the substantive rights or obligations of all Securities Holders, unless each such disproportionately affected Securities Holder consents in writing thereto. (c) Each Securities Holder agrees that GlobalSCAPE and the Surviving Corporation shall be entitled to rely on any action taken or omission to act by Stockholders’ Representative, on behalf of such Securities Holder (an “Authorized Action”), and that each Authorized Action shall be binding on each Securities Holder as fully as if such Securities Holder had taken such Authorized Action. GlobalSCAPE agrees, for itself and each of the Surviving Corporation, that Stockholders’ Representative, in its capacity as Stockholders’ Representative, shall have no liability to GlobalSCAPE or any of the Surviving Corporation for any Authorized Action, except to the extent that such Authorized Action is found by a final order of a court of competent jurisdiction to have constituted fraud or willful misconduct. Each Securities Holder hereby severally, for itself only and not jointly and severally, agrees to indemnify and hold harmless Stockholders’ Representative against all expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by Stockholders’ Representative in connection with any action, suit or proceeding to which Stockholders’ Representative is made a party by reason of the fact it is or was acting as Stockholders’ Representative pursuant to the terms of this Agreement and any expenses incurred by Stockholders’ Representative in connection with the performance of its duties hereunder. (d) Stockholders’ Representative shall be entitled to an annual fee payable by the Securities Holders equal to $20,000 for each of the first two years following the Effective Date, and shall be entitled to reimbursement from the Securities Holders of all expenses incurred as Stockholders’ Representative, payable from the Stockholder’s Representative Fund to the extent available. Thereafter, no fee will be payable to Stockholders’ Representative Fund for the performance of his services but all expenses will continue to be paid from the Stockholders’ Representative Fund to the extent available and thereafter from the Securities Holders. (e) Stockholders’ Representative shall not have, by reason of this Agreement, a fiduciary relationship in respect of any Securities Holder, except in respect of amounts received on behalf of such Securities Holder. Stockholders’ Representative shall not be liable to any Securities Holder for any action taken or omitted by it or any agent employed by it hereunder or under any other document entered into in connection herewith, except that Stockholders’ Representative shall not be relieved of any liability imposed by law for willful misconduct. Stockholders’ Representative shall not be liable to the Securities Holders for any apportionment or distribution of payments made by Stockholders’ Representative in good faith, and if any such apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Securities Holder to whom payment was due, but not made, shall be to recover from other Securities Holders any payment in excess of the amount to which they are determined to have been entitled. Stockholders’ Representative shall not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement. Neither Stockholders’ Representative nor any agent employed by it shall incur any liability to any Securities Holder by virtue of the failure or refusal of Stockholders’ Representative for any reason to consummate the transactions contemplated hereby or relating to the performance of its other duties hereunder, except for actions or omissions constituting fraud or bad faith. (f) All of the indemnities, immunities and powers granted to Stockholders’ Representative under this Agreement shall survive the Closing Date. (g) Stockholders’ Representative shall be entitled to establish the Stockholders’ Representative Fund and related Stockholders’ Representative Account and to receive the portion of the Merger Consideration and the other amounts described in this Agreement and to pay from the Stockholders’ Account any expenses, Losses, negative Final Post-Closing Adjustment or other amounts deemed necessary or advisable by Stockholders’ Representative to accomplish the purposes of this Agreement. At such time as the Stockholders’ Representative receives a payment on behalf of the Securities Holders of any portion of the Earnout Payment, it will be entitled to deduct therefrom any amounts necessary, in the exercise of his, her or its sole discretion, necessary or advisable to retain in the Stockholders’ Representative Account to provide adequate reserves for the performance of his, her or its duties hereunder. At such time or from time to time as Stockholders’ Representative, in the exercise of its sole discretion, determines that the funds in the Stockholders’ Representative Account exceed the reserves advisable to retain in the Stockholders’ Representative Account, Stockholders’ Representative will distribute such excess funds to Securities Holders in accordance with the proportions with which the Stockholders’ Representative Fund was originally funded. If the amount remaining in the Stockholders’ Representative Account is less than the expense that would be incurred in making such distribution, Stockholders’ Representative may, in lieu of making such a distribution to Securities Holders, contribute the balance to a Tax-exempt 501(c)(3) organization of its choice.
Appears in 1 contract
Samples: Merger Agreement (Globalscape Inc)
Appointment of Stockholders’ Representative. (a) The Landmark Stockholders hereby irrevocably appoint Rxxxxx X. Xxxx as the Stockholders’ Representative is hereby designated by each to act as the agent of such stockholders with respect to, and with the full power to resolve, all questions, disputes, to authorize the payments of amounts for expenses, to defend, negotiate and/or settle such claims, to employ such agents, consultants and professionals, to delegate authority to his agents, and to take such actions, to grant such consents and waivers and execute such documents on their behalf in connection with this Agreement as the Stockholders’ Representative, in his sole discretion, deems best and to perform all of the Securities Holders to serve as functions of the representative of Securities Holders Stockholders’ Representative under this Agreement.
(b) Parent may rely upon written directions and notices received from the Stockholders’ Representative with respect to the matters described herein. In the event Rxxxxx X. Xxxx ceases to be able to perform his duties as a Stockholders’ Representative as a result of his death, incapacity or resignation, the former Landmark Stockholders (voting in proportion to each stockholder’s former holdings of Landmark Shares as of the Effective Time) shall designate an individual to serve as his successor and to assume all of his duties and obligations as a Stockholders’ Representative hereunder and shall so notify Parent in writing of any such designation. The parties acknowledge and agree that Rxxxxx X. Xxxx, or any successors designated pursuant to this Section 2.7, is acting as the Stockholders’ Representative for the stockholders of Landmark for the limited administrative purposes set forth herein and nothing in this Agreement to be performed by is intended to, nor shall, impose any personal liability on Rxxxxx X. Xxxx or any other Person who serves as Stockholders’ Representative. The initial Stockholders’ Representative will be Xxxx XxXxxxx. Should At any Stockholders’ Representative resign or be unable to servetime, Securities Holders who, Landmark Stockholders who held immediately prior to the Closing, held more than fifty percent (50%) of the voting power of the Stock (with the Warrants and Company Stock Options being considered on an as-exercised basis) shall be entitled to designate a substitute agent to serve as a successor Stockholders’ Representative, who shall be a Stockholders’ Representative for all purposes thereafter. The appointment of any such successor shall be effective on the date of such Stockholders’ Representative’s resignation or incapacity or, if later, the date on which such successor is appointed.
(b) Each Securities Holder, by approving the Merger or delivering Certificates, letters of transmittal or other documentation demonstrating participating in the Merger, hereby irrevocably appoints Stockholders’ Representative as the agent, proxy and attorney-in-fact for such Securities Holder for all purposes of this Agreement, including the full power and authority on such Securities Holder’s behalf (i) to consummate the transactions contemplated herein and any post-Closing matters; (ii) to pay such Securities Holder’s Transaction Expenses (whether incurred on or after the date of this Agreement); (iii) to hold or disburse any funds received hereunder to such Securities Holder and each other Securities Holder; (iv) to endorse and deliver the Certificates or any certificates or instruments representing Company Stock Options and Warrants and execute such further instruments of assignment as GlobalSCAPE may reasonably request; (v) to execute and deliver on behalf of such Securities Holder, any amendment or waiver in connection with this Agreement and the other agreements or documents contemplated hereby as Stockholders’ Representative, in its sole discretion, may deem necessary or desirable; (vi) to make any objection to, defend, negotiate, waive, take no action against or settle any indemnification claims of the GlobalSCAPE Indemnity Group pursuant to this Agreement, or to pay or authorize the payment of funds to the GlobalSCAPE Indemnity Group; (vii) to review, negotiate, dispute, not dispute or approve any Net Working Capital adjustment; (viii) to make any claim on behalf of the Securities Holders Indemnified Parties; (ix) to take all other actions to be taken by or on behalf of such Securities Holder in connection herewith; (x) to do each and every act and exercise any and all rights which such Securities Holder(s) collectively are permitted or required to do or exercise under this Agreement; (xi) to prepare and distribute to each Securities Holder, any documentation necessary or desirable for the filing of income Tax Returns; and (xii) to make, execute, acknowledge and deliver this Agreement and all such other agreements, guarantees, orders, receipts, endorsements, notices, requests, instructions, certificates, letters and other writings, and, in general, to do any and all things and to take any and all action that Stockholders’ 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 and all other agreements and documents referred to herein or therein or executed in connection herewith and therewith, including, without limitation, retaining counsel, accountants and other agents, representatives and experts, incurring fees and expenses, asserting or pursuing any Claim against GlobalSCAPE, the Company and/or any Securities Holder, defending any Claims by GlobalSCAPE or third-party Claims, consenting to, compromising or settling any such Claims, conducting negotiations with GlobalSCAPE, the Company and their respective representatives regarding such Claims, it being understood that Stockholders’ Representative shall not have any obligation to take any such actions, and shall not have any liability for any failure to take any such actions. Notwithstanding anything to the contrary herein, however, Stockholders’ Representative shall not (i) have the power to take any action or actions arising out of any alleged Breach of any representation or warranty made personally by a specific Securities Holder, or (ii) be empowered to grant waivers or execute and deliver amendments to this Agreement or other agreements contemplated hereby if such waiver or amendment materially and adversely impacts holders of a particular class of equity securities, without the consent of holders of Effective Time a majority of the class of securities so impacted, and GlobalSCAPE hereby acknowledges such limitations. Each Securities Holder agrees that such agency and proxy are coupled with an interest, are therefore irrevocable without Landmark Shares may remove or replace the consent of person serving as the Stockholders’ Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of any Securities Holder. All decisions and actions name a substitute for such person by Stockholders’ Representative (written notice to the extent authorized by this Agreement) shall be binding upon all Securities Holders, and no Securities Holder shall have the right to object, dissent, protest or otherwise contest the same; provided, however, that Stockholders’ Representative shall not take any such action where (x) any single Securities Holder would be held solely liable for any Losses (without such Securities Holder’s consent) or (y) such action materially and adversely affects the substantive rights or obligations of one Securities Holder, or group of Securities Holders, without a similar proportionate effect upon the substantive rights or obligations of all Securities Holders, unless each such disproportionately affected Securities Holder consents in writing theretoParent.
(c) Each Securities Holder agrees that GlobalSCAPE and the Surviving Corporation shall be entitled to rely on any action taken or omission to act by Stockholders’ Representative, on behalf of such Securities Holder (an “Authorized Action”), and that each Authorized Action shall be binding on each Securities Holder as fully as if such Securities Holder had taken such Authorized Action. GlobalSCAPE agrees, for itself and each of the Surviving Corporation, that Stockholders’ Representative, in its capacity as Stockholders’ Representative, shall have no liability to GlobalSCAPE or any of the Surviving Corporation for any Authorized Action, except to the extent that such Authorized Action is found by a final order of a court of competent jurisdiction to have constituted fraud or willful misconduct. Each Securities Holder hereby severally, for itself only and not jointly and severally, agrees to indemnify and hold harmless Stockholders’ Representative against all expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by Stockholders’ Representative in connection with any action, suit or proceeding to which Stockholders’ Representative is made a party by reason of the fact it is or was acting as Stockholders’ Representative pursuant to the terms of this Agreement and any expenses incurred by Stockholders’ Representative in connection with the performance of its duties hereunder.
(d) Stockholders’ Representative shall be entitled to an annual fee payable by the Securities Holders equal to $20,000 for each of the first two years following the Effective Date, and shall be entitled to reimbursement from the Securities Holders of all expenses incurred as Stockholders’ Representative, payable from the Stockholder’s Representative Fund to the extent available. Thereafter, no fee will be payable to Stockholders’ Representative Fund for the performance of his services but all expenses will continue to be paid from the Stockholders’ Representative Fund to the extent available and thereafter from the Securities Holders.
(e) Stockholders’ Representative shall not have, by reason of this Agreement, a fiduciary relationship in respect of any Securities Holder, except in respect of amounts received on behalf of such Securities Holder. The Stockholders’ Representative shall not be liable to any Securities Holder for any action taken act done or omitted by it or any agent employed by it hereunder or under any other document entered into in connection herewith, except that Stockholders’ Representative shall not be relieved of any liability imposed by law for willful misconduct. Stockholders’ Representative shall not be liable to the Securities Holders for any apportionment or distribution of payments made by Stockholders’ Representative such capacity while acting in good faith, and if except for any such apportionment act done or distribution is subsequently determined omitted which constitutes gross negligence or willful misconduct. Any act done or omitted pursuant to have been made in error, the sole recourse advice of any Securities Holder to whom payment was due, but not made, counsel shall be to recover from other Securities Holders any payment in excess conclusive evidence of such good faith and of the amount to which they are determined to have been entitled. Stockholders’ Representative shall not be required to make any inquiry concerning either the performance absence of gross negligence or observance of any of the terms, provisions or conditions of this Agreement. Neither Stockholders’ Representative nor any agent employed by it shall incur any liability to any Securities Holder by virtue of the failure or refusal of Stockholders’ Representative for any reason to consummate the transactions contemplated hereby or relating to the performance of its other duties hereunder, except for actions or omissions constituting fraud or bad faithwillful misconduct.
(fd) All Each of the indemnitiesLandmark Stockholders hereby agrees, immunities jointly and powers granted severally, to Stockholders’ Representative under this Agreement shall survive the Closing Date.
(g) Stockholders’ Representative shall be entitled to establish indemnify, defend and forever hold the Stockholders’ Representative Fund harmless, from and related Stockholdersagainst any and all losses, demands, causes of action, judgments, liabilities, claims, costs, damages and expenses (including, without limitation, fines, forfeitures, reasonable attorneys’ Representative Account fees, disbursements and administrative or court costs) directly or indirectly arising out of, resulting from, or in connection with, any claim or alleged claim with respect to receive the portion of the Merger Consideration and the other amounts described in this Agreement and to pay from the Stockholders’ Account Representative’s obligations under this Agreement or any expensesother agreement contemplated hereby or thereby, Losses, negative Final Post-Closing Adjustment except for claims or other amounts deemed necessary alleged claims arising out of the gross negligence or advisable by willful misconduct of the Stockholders’ Representative to accomplish the purposes of this Agreement. At such time as Representative.
(e) Parent shall provide the Stockholders’ Representative receives with such information and assistance as he may reasonably request, including making employees available on a payment on behalf of the Securities Holders of any portion of the Earnout Payment, it will be entitled to deduct therefrom any amounts necessary, in the exercise of his, her or its sole discretion, necessary or advisable to retain in the Stockholders’ Representative Account to provide adequate reserves for the performance of his, her or its duties hereunder. At such time or from time to time as Stockholders’ Representative, in the exercise of its sole discretion, determines that the funds in the Stockholders’ Representative Account exceed the reserves advisable to retain in the Stockholders’ Representative Account, Stockholders’ Representative will distribute such excess funds to Securities Holders in accordance with the proportions with which the Stockholders’ Representative Fund was originally funded. If the amount remaining in the Stockholders’ Representative Account is less than the expense that would be incurred in making such distribution, Stockholders’ Representative may, in lieu of making such a distribution to Securities Holders, contribute the balance to a Tax-exempt 501(c)(3) organization of its choicemutually convenient basis.
Appears in 1 contract
Appointment of Stockholders’ Representative. By virtue of the ------------------------------------------- affirmative vote of the stockholders of IDRC required to approve the Merger and the agreement of the IDRC Optionholders, the Merger Agreement and this Agreement, the stockholders of IDRC and the IDRC Optionholders irrevocably appoint Xxxxx XxXxxxxx (athe "Stockholders' Representative") to act as attorney- in-fact of said stockholders and Optionholders with authority to make all decisions on behalf of said stockholders and Optionholders with respect to any matters arising from the indemnification obligations of the stockholders of IDRC and the IDRC Optionholders (including matters arising under Article VII of the Merger Agreement); and any decisions made by the Stockholders’ ' Representative with respect to any matter thereof shall be final and binding on such stockholders and Optionholders. Without limiting the foregoing, the Stockholders' Representative is hereby designated by each authorized on behalf of the Securities Holders stockholders of IDRC and IDRC Optionholders to serve as (i) object to any claim for indemnification against the representative Escrow Property or the stockholders of Securities Holders IDRC or the IDRC Optionholders under Article VII of the Merger Agreement, (ii) settle or compromise any claim for such indemnification, (iii) assume responsibility for administering all matters arising under Article VII of the Merger Agreement, (iv) interpret on behalf of the stockholders of IDRC and the IDRC Optionholders all of the provisions of this Agreement and of Article VII of the Merger Agreement, and (v) generally to represent all stockholders of IDRC and the IDRC Optionholders and their heirs, personal representatives, successors and assigns with respect to all matters arising under this Agreement and Article VII of the Merger Agreement. The Stockholders' Representative is authorized to retain counsel to assist him in matters relating to this Agreement and Article VII of the Merger Agreement and his obligations hereunder or thereunder, including the dispute of any claims. With respect to all matters set forth on Schedule 7.3 to the Merger Agreement, TeleSpectrum shall consult with the Stockholders' Representative regarding material developments relating to these matters and will not settle or reach a final resolution with regard to those matters without the approval of the Stockholders' Representative, which approval will not unreasonably be withheld. TeleSpectrum will continue to retain the counsel previously retained by IDRC relating to the matters set forth in this Agreement to be performed by Stockholders’ Representative. The initial Stockholders’ Representative will be Xxxx XxXxxxx. Should any Stockholders’ Representative resign or be unable to serve, Securities Holders who, immediately prior on Schedule 7.3 to the Closing, held more than fifty percent (50%) of the voting power of the Stock (with the Warrants and Company Stock Options being considered on an as-exercised basis) shall be entitled to designate a substitute agent to serve as a successor Stockholders’ Representative, who shall be a Stockholders’ Representative for all purposes thereafter. The appointment of any such successor shall be effective on the date of such Stockholders’ Representative’s resignation or incapacity or, if later, the date on which such successor is appointed.
(b) Each Securities Holder, by approving the Merger or delivering Certificates, letters of transmittal or other documentation demonstrating participating in the Merger, hereby irrevocably appoints Stockholders’ Representative as the agent, proxy and attorney-in-fact for such Securities Holder for all purposes of this Agreement, including the full power and authority on such Securities Holder’s behalf Agreement unless (i) to consummate the transactions contemplated herein board of directors of TeleSpectrum shall otherwise determine and any post-Closing matters; (ii) to pay the Stockholders' Representative agrees with any such Securities Holder’s Transaction Expenses (whether incurred on or after the date of this Agreement); (iii) to hold or disburse any funds received hereunder to such Securities Holder and each other Securities Holder; (iv) to endorse and deliver the Certificates or any certificates or instruments representing Company Stock Options and Warrants and execute such further instruments of assignment as GlobalSCAPE may reasonably request; (v) to execute and deliver on behalf of such Securities Holder, any amendment or waiver in connection with this Agreement and the other agreements or documents contemplated hereby as Stockholders’ Representative, in its sole discretion, may deem necessary or desirable; (vi) to make any objection to, defend, negotiate, waive, take no action against or settle any indemnification claims determination of the GlobalSCAPE Indemnity Group pursuant to this AgreementTeleSpectrum Board, or to pay or authorize the payment of funds to the GlobalSCAPE Indemnity Group; (vii) to review, negotiate, dispute, not dispute or approve any Net Working Capital adjustment; (viii) to make any claim on behalf of the Securities Holders Indemnified Parties; (ix) to take all other actions to be taken by or on behalf of such Securities Holder in connection herewith; (x) to do each and every act and exercise any and all rights which such Securities Holder(s) collectively are permitted or required to do or exercise under this Agreement; (xi) to prepare and distribute to each Securities Holder, any documentation necessary or desirable for the filing of income Tax Returns; and (xii) to make, execute, acknowledge and deliver this Agreement and all such other agreements, guarantees, orders, receipts, endorsements, notices, requests, instructions, certificates, letters and other writings, and, in general, to do any and all things and to take any and all action that Stockholders’ 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 and all other agreements and documents referred to herein or therein or executed in connection herewith and therewith, including, without limitation, retaining counsel, accountants and other agents, representatives and experts, incurring fees and expenses, asserting or pursuing any Claim against GlobalSCAPE, the Company and/or any Securities Holder, defending any Claims by GlobalSCAPE or third-party Claims, consenting to, compromising or settling any such Claims, conducting negotiations with GlobalSCAPE, the Company and their respective representatives regarding such Claims, it being understood that Stockholders’ Representative agreement shall not have any obligation to take any such actions, and shall not have any liability for any failure to take any such actions. Notwithstanding anything to the contrary herein, however, Stockholders’ Representative shall not (i) have the power to take any action or actions arising out of any alleged Breach of any representation or warranty made personally by a specific Securities Holder, or (ii) unreasonably be empowered to grant waivers or execute and deliver amendments to this Agreement or other agreements contemplated hereby if such waiver or amendment materially and adversely impacts holders of a particular class of equity securities, without the consent of holders of a majority of the class of securities so impacted, and GlobalSCAPE hereby acknowledges such limitations. Each Securities Holder agrees that such agency and proxy are coupled with an interest, are therefore irrevocable without the consent of Stockholders’ Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of any Securities Holder. All decisions and actions by Stockholders’ Representative (to the extent authorized by this Agreement) shall be binding upon all Securities Holders, and no Securities Holder shall have the right to object, dissent, protest or otherwise contest the same; provided, however, that Stockholders’ Representative shall not take any such action where (x) any single Securities Holder would be held solely liable for any Losses (without such Securities Holder’s consent) or (y) such action materially and adversely affects the substantive rights or obligations of one Securities Holder, or group of Securities Holders, without a similar proportionate effect upon the substantive rights or obligations of all Securities Holders, unless each such disproportionately affected Securities Holder consents in writing theretowithheld.
(c) Each Securities Holder agrees that GlobalSCAPE and the Surviving Corporation shall be entitled to rely on any action taken or omission to act by Stockholders’ Representative, on behalf of such Securities Holder (an “Authorized Action”), and that each Authorized Action shall be binding on each Securities Holder as fully as if such Securities Holder had taken such Authorized Action. GlobalSCAPE agrees, for itself and each of the Surviving Corporation, that Stockholders’ Representative, in its capacity as Stockholders’ Representative, shall have no liability to GlobalSCAPE or any of the Surviving Corporation for any Authorized Action, except to the extent that such Authorized Action is found by a final order of a court of competent jurisdiction to have constituted fraud or willful misconduct. Each Securities Holder hereby severally, for itself only and not jointly and severally, agrees to indemnify and hold harmless Stockholders’ Representative against all expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by Stockholders’ Representative in connection with any action, suit or proceeding to which Stockholders’ Representative is made a party by reason of the fact it is or was acting as Stockholders’ Representative pursuant to the terms of this Agreement and any expenses incurred by Stockholders’ Representative in connection with the performance of its duties hereunder.
(d) Stockholders’ Representative shall be entitled to an annual fee payable by the Securities Holders equal to $20,000 for each of the first two years following the Effective Date, and shall be entitled to reimbursement from the Securities Holders of all expenses incurred as Stockholders’ Representative, payable from the Stockholder’s Representative Fund to the extent available. Thereafter, no fee will be payable to Stockholders’ Representative Fund for the performance of his services but all expenses will continue to be paid from the Stockholders’ Representative Fund to the extent available and thereafter from the Securities Holders.
(e) Stockholders’ Representative shall not have, by reason of this Agreement, a fiduciary relationship in respect of any Securities Holder, except in respect of amounts received on behalf of such Securities Holder. Stockholders’ Representative shall not be liable to any Securities Holder for any action taken or omitted by it or any agent employed by it hereunder or under any other document entered into in connection herewith, except that Stockholders’ Representative shall not be relieved of any liability imposed by law for willful misconduct. Stockholders’ Representative shall not be liable to the Securities Holders for any apportionment or distribution of payments made by Stockholders’ Representative in good faith, and if any such apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Securities Holder to whom payment was due, but not made, shall be to recover from other Securities Holders any payment in excess of the amount to which they are determined to have been entitled. Stockholders’ Representative shall not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement. Neither Stockholders’ Representative nor any agent employed by it shall incur any liability to any Securities Holder by virtue of the failure or refusal of Stockholders’ Representative for any reason to consummate the transactions contemplated hereby or relating to the performance of its other duties hereunder, except for actions or omissions constituting fraud or bad faith.
(f) All of the indemnities, immunities and powers granted to Stockholders’ Representative under this Agreement shall survive the Closing Date.
(g) Stockholders’ Representative shall be entitled to establish the Stockholders’ Representative Fund and related Stockholders’ Representative Account and to receive the portion of the Merger Consideration and the other amounts described in this Agreement and to pay from the Stockholders’ Account any expenses, Losses, negative Final Post-Closing Adjustment or other amounts deemed necessary or advisable by Stockholders’ Representative to accomplish the purposes of this Agreement. At such time as the Stockholders’ Representative receives a payment on behalf of the Securities Holders of any portion of the Earnout Payment, it will be entitled to deduct therefrom any amounts necessary, in the exercise of his, her or its sole discretion, necessary or advisable to retain in the Stockholders’ Representative Account to provide adequate reserves for the performance of his, her or its duties hereunder. At such time or from time to time as Stockholders’ Representative, in the exercise of its sole discretion, determines that the funds in the Stockholders’ Representative Account exceed the reserves advisable to retain in the Stockholders’ Representative Account, Stockholders’ Representative will distribute such excess funds to Securities Holders in accordance with the proportions with which the Stockholders’ Representative Fund was originally funded. If the amount remaining in the Stockholders’ Representative Account is less than the expense that would be incurred in making such distribution, Stockholders’ Representative may, in lieu of making such a distribution to Securities Holders, contribute the balance to a Tax-exempt 501(c)(3) organization of its choice.
Appears in 1 contract
Samples: Indemnification Agreement (Telespectrum Worldwide Inc)
Appointment of Stockholders’ Representative. (a) Stockholders’ Representative is The Stockholder hereby designated by each of the Securities Holders to serve as the representative of Securities Holders with respect irrevocably agrees to the matters set forth in this Agreement to be performed by appointment of Baupost Capital, L.L.C. (the “Stockholders’ Representative. The initial Stockholders’ Representative will be Xxxx XxXxxxx. Should any Stockholders’ Representative resign ”) as his, her or be unable to serve, Securities Holders who, immediately prior to the Closing, held more than fifty percent (50%) of the voting power of the Stock (with the Warrants and Company Stock Options being considered on an as-exercised basis) shall be entitled to designate a substitute its agent to serve as a successor Stockholders’ Representative, who shall be a Stockholders’ Representative for all purposes thereafter. The appointment of any such successor shall be effective on the date of such Stockholders’ Representative’s resignation or incapacity or, if later, the date on which such successor is appointed.
(b) Each Securities Holder, by approving the Merger or delivering Certificates, letters of transmittal or other documentation demonstrating participating in the Merger, hereby irrevocably appoints Stockholders’ Representative as the agent, proxy and attorney-in-fact for such Securities Holder for all purposes of this taking action with respect to Article VIII of the Merger Agreement, including the full power Escrow Agreement and authority on such Securities Holder’s behalf (iSchedule 1.1(a) to consummate the transactions contemplated herein Merger Agreement, and consents to the taking by the Stockholders’ Representative of any post-Closing matters; (ii) to pay such Securities Holder’s Transaction Expenses (whether incurred on or after the date of this Agreement); (iii) to hold or disburse any funds received hereunder to such Securities Holder and each other Securities Holder; (iv) to endorse and deliver the Certificates or any certificates or instruments representing Company Stock Options and Warrants and execute such further instruments of assignment as GlobalSCAPE may reasonably request; (v) to execute and deliver on behalf of such Securities Holder, any amendment or waiver in connection with this Agreement all actions and the other agreements making of any decisions required or documents contemplated hereby as Stockholders’ Representative, in its sole discretion, may deem necessary or desirable; (vi) to make any objection to, defend, negotiate, waive, take no action against or settle any indemnification claims of the GlobalSCAPE Indemnity Group pursuant to this Agreement, or to pay or authorize the payment of funds to the GlobalSCAPE Indemnity Group; (vii) to review, negotiate, dispute, not dispute or approve any Net Working Capital adjustment; (viii) to make any claim on behalf of the Securities Holders Indemnified Parties; (ix) to take all other actions permitted to be taken by or on behalf of such Securities Holder in connection herewith; (xit under the Merger Agreement, the Escrow Agreement and Schedule 1.1(a) to do each and every act and exercise any and all rights which such Securities Holder(s) collectively are permitted or required to do or exercise under this Agreement; (xi) to prepare and distribute to each Securities Holder, any documentation necessary or desirable for the filing of income Tax Returns; and (xii) to make, execute, acknowledge and deliver this Merger Agreement and all to exercise such other agreementsrights, guaranteespower and authority, ordersas are incidental thereto (including the right, receipts, endorsements, notices, requests, instructions, certificates, letters power and other writings, and, in general, authority to do any and all things and to take any and all action that Stockholders’ 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 and all other agreements and documents referred to herein or therein or executed in connection herewith and therewith, including, without limitation, retaining counselretain attorneys, accountants and other agents, representatives and experts, incurring fees and expenses, asserting or pursuing any Claim against GlobalSCAPE, the Company and/or any Securities Holder, defending any Claims by GlobalSCAPE or third-party Claims, consenting to, compromising or settling any such Claims, conducting negotiations with GlobalSCAPE, the Company and their respective representatives regarding such Claims, advisors to assist it being understood that Stockholders’ Representative shall not have any obligation to take any such actions, and shall not have any liability for any failure to take any such actions. Notwithstanding anything to the contrary herein, however, Stockholders’ Representative shall not (i) have the power to take any action or actions arising out of any alleged Breach of any representation or warranty made personally by a specific Securities Holder, or (ii) be empowered to grant waivers or execute and deliver amendments to this Agreement or other agreements contemplated hereby if such waiver or amendment materially and adversely impacts holders of a particular class of equity securities, without the consent of holders of a majority of the class of securities so impacted, and GlobalSCAPE hereby acknowledges such limitations. Each Securities Holder agrees that such agency and proxy are coupled with an interest, are therefore irrevocable without the consent of Stockholders’ Representative and shall survive the death, incapacity, bankruptcy, dissolution or liquidation of any Securities Holder. All decisions and actions by Stockholders’ Representative (to the extent authorized by this Agreement) shall be binding upon all Securities Holders, and no Securities Holder shall have the right to object, dissent, protest or otherwise contest the same; provided, however, that Stockholders’ Representative shall not take any such action where (x) any single Securities Holder would be held solely liable for any Losses (without such Securities Holder’s consent) or (y) such action materially and adversely affects the substantive rights or obligations of one Securities Holder, or group of Securities Holders, without a similar proportionate effect upon the substantive rights or obligations of all Securities Holders, unless each such disproportionately affected Securities Holder consents in writing thereto.
(c) Each Securities Holder agrees that GlobalSCAPE and the Surviving Corporation shall be entitled to rely on any action taken or omission to act by Stockholders’ Representative, on behalf of such Securities Holder (an “Authorized Action”), and that each Authorized Action shall be binding on each Securities Holder as fully as if such Securities Holder had taken such Authorized Action. GlobalSCAPE agrees, for itself and each of the Surviving Corporation, that Stockholders’ Representative, in its capacity as Stockholders’ Representative, shall have no liability to GlobalSCAPE or any of the Surviving Corporation for any Authorized Action, except to the extent that such Authorized Action is found by a final order of a court of competent jurisdiction to have constituted fraud or willful misconduct. Each Securities Holder hereby severally, for itself only and not jointly and severally, agrees to indemnify and hold harmless Stockholders’ Representative against all expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by Stockholders’ Representative in connection with any action, suit or proceeding to which Stockholders’ Representative is made a party by reason of the fact it is or was acting as Stockholders’ Representative pursuant to the terms of this Agreement and any expenses incurred by Stockholders’ Representative in connection with the performance of its duties hereunder.
(dthereunder). The Stockholder agrees that the Stockholders’ Representative shall have the ability and power to execute and deliver all instruments, certificates and other documents of every kind incident to the foregoing and with all right, power and authority to act on its behalf in connection therewith. Parent shall be entitled to deal exclusively with the Stockholders’ Representative on all matters relating to Article VIII of the Merger Agreement, the Escrow Agreement and Schedule 1.1(a) to the Merger Agreement. If the Stockholders’ Representative shall resign its position or be unable to fulfill its responsibilities as agent of the Company stockholders, then Phoenix Rental Partners, LLC shall, within ten days after a request by Parent, appoint a successor representative. Any such successor shall become the “Stockholders’ Representative” for purposes of Article VIII of the Merger Agreement, the Escrow Agreement and Schedule 1.1(a) to the Merger Agreement. If for any reason there is no Stockholders’ Representative at any time, all references herein to the Stockholders’ Representative shall be entitled deemed to an annual fee payable by refer to Baupost Capital, L.L.C.
(b) The Stockholder also agrees with the Securities Holders equal to $20,000 for each provisions in Article IX of the first two years following Merger Agreement in respect of the Effective Date, and shall be entitled to reimbursement from the Securities Holders of all expenses incurred as Stockholders’ Representative, payable from the Stockholder’s Representative Fund to the extent available. Thereafter, no fee will be payable to Stockholders’ Representative Fund for the performance of his services but all expenses will continue to be paid from the Stockholders’ Representative Fund to the extent available and thereafter from the Securities Holders.
(e) Stockholders’ Representative shall not have, by reason of this Agreement, a fiduciary relationship in respect of any Securities Holder, except in respect of amounts received on behalf of such Securities Holder. Stockholders’ Representative shall not be liable to any Securities Holder for any action taken or omitted by it or any agent employed by it hereunder or under any other document entered into in connection herewith, except that Stockholders’ Representative shall not be relieved of any liability imposed by law for willful misconduct. Stockholders’ Representative shall not be liable to the Securities Holders for any apportionment or distribution of payments made by Stockholders’ Representative in good faith, and if any such apportionment or distribution is subsequently determined to have been made in error, the sole recourse of any Securities Holder to whom payment was due, but not made, shall be to recover from other Securities Holders any payment in excess of the amount to which they are determined to have been entitled. Stockholders’ Representative shall not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement. Neither Stockholders’ Representative nor any agent employed by it shall incur any liability to any Securities Holder by virtue of the failure or refusal of Stockholders’ Representative for any reason to consummate the transactions contemplated hereby or relating to the performance of its other duties hereunder, except for actions or omissions constituting fraud or bad faith.
(f) All of the indemnities, immunities and powers granted to Stockholders’ Representative under this Agreement shall survive the Closing Date.
(g) Stockholders’ Representative shall be entitled to establish the Stockholders’ Representative Fund and related Stockholders’ Representative Account and to receive the portion of the Merger Consideration and the other amounts described in this Agreement and to pay from the Stockholders’ Account any expenses, Losses, negative Final Post-Closing Adjustment or other amounts deemed necessary or advisable by Stockholders’ Representative to accomplish the purposes of this Agreement. At such time as the Stockholders’ Representative receives a payment on behalf of the Securities Holders of any portion of the Earnout Payment, it will be entitled to deduct therefrom any amounts necessary, in the exercise of his, her or its sole discretion, necessary or advisable to retain in the Stockholders’ Representative Account to provide adequate reserves for the performance of his, her or its duties hereunder. At such time or from time to time as Stockholders’ Representative, in the exercise of its sole discretion, determines that the funds in the Stockholders’ Representative Account exceed the reserves advisable to retain in the Stockholders’ Representative Account, Stockholders’ Representative will distribute such excess funds to Securities Holders in accordance with the proportions with which the Stockholders’ Representative Fund was originally funded. If the amount remaining in the Stockholders’ Representative Account is less than the expense that would be incurred in making such distribution, Stockholders’ Representative may, in lieu of making such a distribution to Securities Holders, contribute the balance to a Tax-exempt 501(c)(3) organization of its choice.
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