Merger Agreement

Draft a signing-to-closing merger agreement reflecting agreed structure, economics, and risk allocation.

Prerequisites

1. Parties and structure — legal names, formation jurisdictions, surviving entity, merger type.
2. Consideration — cash/stock mix, exchange ratio, earnout/contingent terms, escrow/holdback.
3. Capitalization — cap tables, equity awards, convertibles, appraisal rights applicability.
4. Diligence inputs — financials, material contracts, IP, litigation, regulatory items.
5. Regulatory/tax plan — antitrust, securities, foreign investment review, tax treatment intent.
6. Timeline and approvals — board/stockholder approvals, outside date, conditions, financing.
7. Ancillary docs — voting agreements, support letters, employment/retention, escrow, registration rights.

Output Structure

1) Document Skeleton

MERGER AGREEMENT
- Parties; Effective Date; Recitals
1. Definitions
2. The Merger; Effective Time; Effects
3. Merger Consideration; Payment Mechanics
4. Treatment of Equity Awards
5. Representations and Warranties of the Company
6. Representations and Warranties of Parent/Merger Sub
7. Covenants (Pre-Closing; Post-Closing)
8. Conditions to Closing
9. Termination
10. Indemnification (or Remedies)
11. Miscellaneous
Signatures
Exhibits and Schedules

2) Workflow

1. Confirm transaction map — parties, merger steps, filings, closing sequence.
2. Draft mechanics and economics — effective time, consideration flow, equity conversion.
3. Allocate risk — reps, covenants, conditions, termination fees, indemnification.
4. Add governance and post-close — board/officers, employee matters, transitional covenants.
5. Attach schedules/exhibits — disclosure schedules, charter/bylaws, ancillary agreement forms.
6. Quality pass — defined terms, cross-references, closing deliverables, schedule conflicts.

3) Section Drafting Reference

| Section | Required Inputs | Drafting Notes | |---|---|---| | Preamble/Recitals | Parties, purpose, structure | Identify merger form and intended effective time | | Definitions | Deal-specific terms | Define MAE, Knowledge, Permitted Liens, Material Contracts | | Merger Mechanics | Surviving entity, filings | Specify filings and effect on charter/bylaws | | Consideration | Price, exchange ratio | Cash/stock mix, payment mechanics, adjustment/earnout | | Equity Treatment | Options/RSUs/convertibles | Vesting, cancellation, assumption (see matrix below) | | Reps & Warranties | Diligence scope | Use schedules to qualify; set materiality/knowledge | | Covenants | Interim operations | Ordinary course, no-shop/go-shop, access | | Conditions | Regulatory, approvals | Mutual and party-specific conditions | | Termination | Outside date, breaches | Fees, cure periods, fiduciary out | | Indemnification | Survival, caps | Align with escrow/holdback; exclusive remedy | | Tax | Transaction intent | State intended treatment only if confirmed | | Miscellaneous | Governing law, notices | Specific performance, assignment limits |

4) Equity Treatment Matrix

| Security | Treatment at Effective Time | Notes | |---|---|---| | Common Stock | Convert into merger consideration at closing | Address fractional shares | | Preferred Stock | Convert per liquidation preference or negotiated ratio | Confirm approval thresholds | | Options | Cancel for spread or assume/convert | Specify exercise/withholding | | RSUs/PSUs | Vest, cancel, or assume per award terms | Address performance targets | | Warrants/Convertibles | Convert or terminate per instrument | Require consents if needed |

5) Closing Deliverables

• Officer certificates and bring-down
• Secretary certificates, good standing, charter/bylaws
• Third-party consents and payoff letters
• Legal opinions (if required)
• Escrow agreement and funding confirmations
• FIRPTA and tax certifications (if applicable)
• Stockholder approval documentation

6) Schedules and Exhibits

| Label | Purpose | |---|---| | Disclosure Schedules | R&W exceptions, numbered to match sections | | Articles/Certificate of Merger | Formation filing form | | Escrow Agreement | Holdback terms and release mechanics | | Voting/Support Agreement | Stockholder commitments | | Registration Rights Agreement | If stock consideration | | Employment/Retention Agreements | Key employee terms |

Guidelines

• Match merger procedure to formation jurisdictions and charter requirements.
• Align consideration mechanics with financing, escrow, and payment workflows.
• Use disclosure schedules to qualify reps; avoid silent qualifiers in the main text.
• Define MAE and Knowledge with clear carve-outs and standards.
• Track no-shop/go-shop, fiduciary out, and matching rights with precision.
• Include antitrust and other regulatory approval and timing obligations.
• Treat tax-free reorganization language as conditional unless confirmed.
• Confirm appraisal/dissenters' rights applicability and process.
• Keep defined terms consistent; avoid duplicated or conflicting provisions.
• Non-compete enforceability varies by state; tailor scope to local law if included.