Representative Expense Fund Clause Samples
The Representative Expense Fund clause establishes a dedicated fund to cover expenses incurred by a representative acting on behalf of a group, such as shareholders or creditors, during the administration of an agreement or transaction. Typically, this fund is sourced from a portion of the transaction proceeds and is used to pay for legal fees, administrative costs, or other necessary expenditures related to the representative's duties. Its core practical function is to ensure that the representative has the necessary resources to fulfill their obligations without needing to seek additional funding from individual group members, thereby streamlining administration and protecting the interests of all parties involved.
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Representative Expense Fund. Notwithstanding anything to the contrary set forth in this Agreement, Parent shall be entitled to withhold from the aggregate Final Adjusted Merger Consideration otherwise payable to holders of Company Common Stock in the Merger pursuant to Section 2.7(b)(i) an amount of cash equal to the Representative Expense Amount. The Representative Expense Amount shall be withheld from each holder of Company Common Stock on a pro rata basis, calculated based on each holder’s Company Stockholder Pro Rata Percentage. On the Closing Date, Parent shall deposit, or cause to be deposited, with the Representative an amount in cash equal to the Representative Expense Amount (such funds being referred to herein as the “Representative Expense Fund”). Each holder of Company Common Stock shall be deemed to have contributed to the Representative Expense Fund such holder’s pro rata portion of the Representative Expense Amount (based on the amount of the Final Adjusted Merger Consideration payable to such holder of Company Common Stock under this Agreement in respect of such holder’s Company Common Stock (without giving effect to the escrow contributions or holdbacks contemplated by this Agreement) relative to the aggregate Final Adjusted Merger Consideration payable in respect of Company Common Stock), to be held by the Representative pursuant to this Agreement. If, as of immediately prior to the Effective Time (and after giving effect to any acceleration of vesting that occurs as a result of the consummation of the Merger), a holder of Company Common Stock shall hold any Unvested Company Capital Stock, then all or a portion of any Final Adjusted Merger Consideration otherwise payable under this Agreement in respect of any Vested Company Capital Stock held by such Company Stockholder shall be withheld and deposited into the Representative Expense Fund prior to the deposit of any Unvested Cash and, thereafter, any Unvested Cash payable to such Company Stockholder under this Agreement shall be withheld and deposited into the Representative Expense Fund if and only to the extent necessary to satisfy such Company Stockholder’s entire representative expense fund contribution obligation under this Agreement (with the understanding and agreement that any Unvested Cash so deposited into the Representative Expense Fund on behalf of any such Company Stockholder shall vest prior to any Unvested Cash payable under this Agreement in respect of any Unvested Company Capital Stock held by such Co...
Representative Expense Fund. The Representative Expense Fund will be used for the purposes of paying directly, or reimbursing the Representative for, any third party expenses pursuant to this Agreement and the agreements ancillary hereto. The Equityholders will not receive any interest or earnings on the Representative Expense Fund and irrevocably transfer and assign to the Representative any ownership right that they may otherwise have had in any such interest or earnings. The Representative will not be liable for any loss of principal of the Representative Expense Fund other than as a result of its gross negligence or willful misconduct. The 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. As soon as practicable following the completion of the Representative’s responsibilities, the Representative will deliver any remaining balance of the Representative Expense Fund to the Paying Agent for further distribution to the Equityholders. For tax purposes, the Representative Expense Fund will be treated as having been received and voluntarily set aside by the Equityholders at the time of Closing.
Representative Expense Fund. Notwithstanding anything to the contrary set forth in this Agreement, the Representative Expense Amount shall be withheld (but without duplication) from the aggregate Total Consideration otherwise payable to the Contributing Securityholders in the Acquisition pursuant to Sections 2.1, 2.2 and 2.3. The Representative Expense Amount shall be withheld from each Contributing Securityholder based on such Contributing Securityholder’s Pro Rata Share, and each Contributing Securityholder shall be deemed to have contributed to the Representative Expense Fund such Contributing Securityholder’s Pro Rata Share of the Representative Expense Amount, to be held by the Paying Agent pursuant to this Agreement and the Paying Agent Agreement. At the Closing, Buyer shall deposit, or cause to be deposited, with the Representative an amount in cash equal to the Representative Expense Amount (such funds being referred to herein as the “Representative Expense Fund”). The Representative Expense Fund will be subject to Section 2.5(h).
Representative Expense Fund. On the Closing Date, Parent shall pay to the Representative or the Representative’s designee the Representative Expense Fund for the purpose of securing the payment of and paying any Representative Expenses. The Representative will hold the Representative Expense Fund separate from his personal funds, will not use such funds for his personal expenses or any other unauthorized purposes and will not voluntarily make these funds available to his creditors in the event of bankruptcy. The Applicable Holders will not receive any interest or other earnings on the Representative Expense Fund and irrevocably transfer and assign to the Representative any ownership right that they may otherwise have had in any such interest or earnings.
(i) The Representative is not providing any investment supervision, recommendations or advice. The Representative shall have no responsibility or liability to any Applicable Holder for any loss of principal of the Representative Expense Fund other than as a result of fraud, gross negligence or willful misconduct by the Representative. The Representative Expense Fund shall terminate on the date on which all remaining amounts constituting the Escrow Fund have been distributed in accordance with this Agreement and the Escrow Agreement (the “Representative Period”).
(ii) Upon the expiration of the Representative Period, the remaining amount of cash, if any, constituting the Representative Expense Fund shall be distributed to each Applicable Holder in an amount equal to their respective Pro Rata Portions of the aggregate amount to be returned. For Tax purposes, the Representative Expense Fund will be treated as having been received and voluntarily set aside by the Applicable Holders at the time of Closing.
Representative Expense Fund. The Representative Expense Fund shall be held by the Sellers’ Representative solely for payment of the fees and expenses incurred by the Sellers’ Representative and to pay amounts owed by the Company Securityholders pursuant to Section 3.6 and this Article XII and shall not be subject to Claims by Parent or any Parent Indemnified Person(s). Within a reasonable period of time following the date in which there shall be no further adjustments or disputes with respect to amounts that may be payable pursuant to Section 3.6, and any amounts payable by the Sellers’ Representative thereunder, if any, shall have been paid, the Seller’s Representative shall cause an amount from the Representative Expense Fund equal to the initial $600,000 amount of the Representative Expense Fund less any amounts paid or payable from such Representative Expense Fund pursuant to Section 3.6 less $200,000 to be paid to the Members based on such Members’ Member Pro Rata Share based on such Members’ Member Pro Rata Share. The Sellers’ Representative shall have sole discretion regarding the withdrawal and use of the Representative Expense Fund to pay the fees and expenses incurred by the Sellers’ Representative in the performance of its duties (as determined in its sole discretion) and amounts owed by the Company Securityholders pursuant to Section 3.6 and this Article XII. Upon the Sellers’ Representatives determination that amounts remaining in the Representative Expense Fund are no longer necessary for purposes of this Article XII, the Sellers’ Representative shall cause all remaining amounts in the Representative Expense Fund to be paid to the Members based on such Members’ Member Pro Rata Share.
Representative Expense Fund. The Representative Expense Amount (the “Representative Expense Fund”) shall be held for the purpose of reimbursing the Holders’ Representative for Representative Expenses to which the Holders’ Representative is entitled pursuant to Section 8.7. The terms of, and timing and payment of, the cash held in the Representative Expense Fund shall be determined in accordance with Section 8.7.
Representative Expense Fund. (i) Notwithstanding anything to the contrary set forth in this Agreement, Parent and Buyer shall be entitled to withhold (but without duplication) from the aggregate Total Consideration otherwise payable to the Contributing Securityholders in the Acquisition pursuant to Section 2.1 and Section 2.2 an amount of cash equal to the Representative Expense Amount. The Representative Expense Amount shall be withheld from each Contributing Securityholder based on such Contributing Securityholder’s Pro Rata Share, and each Contributing Securityholder shall be deemed to have contributed to the Representative Expense Fund such holder’s Pro Rata Share of the Representative Expense Amount, to be held by the Representative pursuant to this Agreement. As soon as practicable following the Closing, Parent or Buyer shall deposit, or cause to be deposited, with the Representative an amount in cash equal to the Representative Expense Amount (such funds being referred to herein as the “Representative Expense Fund”). The Representative shall hold the Representative Expense Fund as partial security for the reimbursement obligations of the Indemnifying Parties to the Representative under this Agreement in accordance with the terms and conditions set forth herein. The Representative Expense Fund (or any portion thereof) shall be distributed to the Representative or the Indemnifying Parties, as applicable, upon the terms and conditions set forth in this Agreement.