Merger Agreement (Private Company, Pro-Buyer)

by Practical Law Corporate & Securities, with environmental provisions by Andrew N. Davis, Ph.D. and Aaron D. Levy, Shipman & Goodwin LLP.

A Standard Document that provides a comprehensive, pro-buyer framework for the acquisition of a private US corporation by merger. This Standard Document is structured as a reverse triangular merger, assuming the target company and merger subsidiary are Delaware corporations and that the signing and closing are not simultaneous. This Standard Document outlines key provisions including extensive representations and warranties, pre- and post-closing covenants, and closing conditions. It addresses complex financial aspects such as a post-closing working capital adjustment, the establishment of escrow funds to secure post-closing obligations, and the appointment of a Stockholder Representative to act on behalf of the stockholders. This Standard Document also details the mechanics of the merger under the Delaware General Corporation Law (DGCL), including the treatment of common stock and the handling of stock options, dissenters' rights, and tax matters. It provides a robust indemnification section to address potential losses arising from breaches of the agreement, complete with procedural guidelines for handling claims.