In many transactions, there are parties other than shareholders who are receiving merger consideration and may have interests in escrows, earnouts or the like. Often in these agreements, it is clear that the shareholder representative has the authority to make decisions that could impact deal economics, such as whether an escrow is depleted or whether it is agreed that an earnout will not be achieved. Since these decisions impact parties other than shareholders, it is generally advisable to have the shareholder representative’s authority cover the full set of payees that are receiving consideration, not just the shareholders (i.e., don’t overlook optionholders, warrantholders or others receiving proceeds).

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