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OTHER NAMES Agreement and Plan of Merger Merger Agreement Form Definitive Merger Agreement

What is a Merger Agreement?

When you're ready to make two businesses one, or to bring another company into your fold, a Merger Agreement paves the way. You'll use it to dissolve one company into another, whether you are retaining one company's name or christening the venture anew. 
 
Mergers are common between competing businesses that agree to join forces. A Merger Agreement may be used when one company purchases another, or when a struggling company seeks the refuge of a more successful one. A Merger Agreement will set the rules for the new organization until the convergence is finalized. It includes an accounting of the assets and liabilities for each company, as well as how each company's shares will be valued under the new entity. During a merger, companies may be continuing daily business operations, so you'll want to decide on guidelines such as the maximum length for new contracts during the transition. The new company will need a new board of directors, and a process for appointing them. No two mergers are alike, there's bound to be some growing pains. Penning the details is the key to making the transition as smooth as possible.

When to use a Merger Agreement:

  • You want to merge another company into yours (surviving entity) to better position your company in the market.
  • You have agreed to dissolve your business into another business.

Sample Merger Agreement

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Merger Agreement

 

THIS MERGER AGREEMENT ("Agreement") is made on by and between , , , , (the ""), and of , , , (the "").

 

On completion of the merger, will be dissolved leaving as the surviving business which will be known as after the merger is complete. The surviving business will be registered in the state of .

 

RECITALS

 

Dissolving Entity

is a duly organized, validly existing, and in good standing under the laws of .

 

Surviving Entity

is a duly organized, validly existing, and in good standing under the laws of .

 

Final Entity

is to be the surviving business entity, as that term is defined in the state statute, to the merger described in this agreement.

 

MERGER

Surviving Business Entity

Subject to the terms and conditions of this Agreement, on the Effective Date mentioned above, shall be merged with and into surviving entity under the laws of the state of . As a result of the Merger, the separate corporate existence of shall cease and the entity shall continue as the surviving business entity

 

Certificate of Merger

shall file a certificate of merger with the Secretary of State, as required by the laws of the state of . The certificate shall be signed and acknowledged by the required number of partners or members of all constituent entities. Certified copies of the certificate of merger shall be filed in the office of the recorder in all counties in which holds real property.

 

Effective Date of Merger

The merger shall be effective on the date of filing of the certificate of merger.

 

TERMS AND CONDITIONS

Negative Covenants

Between the date of this Agreement and the date on which the merger becomes effective, each constituent entity will not:

 

 

Further Assignments or Assurances

If at any time considers or is advised that any further assignments or assurances in law are necessary to vest or to perfect or to confirm of record in the title to any property or rights of disappearing entity, or otherwise carry out the provisions of this Agreement, the entities agree that the managers of , as of the effective date of the merger, will execute and deliver all proper deeds, assignments, confirmations, and assurances in law, and do all acts that the surviving entity reasonably determines to be proper to vest, perfect, and confirm title to such property or rights in , and otherwise carry out the provisions of this Agreement.

 

VALUATION OF ASSETS

Assets of

The partners or managers of agree that:

The present value of its tangible and intangible assets, including goodwill is ;

The fair market value of its unrealized receivables is ;

The fair market value of its inventory is ; and

The estimated amount of its liabilities is .

 

Assets of

The partners or managers of agree that:

The present value of its tangible and intangible assets, including goodwill, is ;

The fair market value of its unrealized receivables is ;

The fair market value of its inventory is ; and

The estimated amount of its liabilities is .

 

Conversion

(a) At the effective date of the merger, each interest in will be converted into interest[s] of .

(b) No fractional interests of after merger will be issued to the holders of interests of . However, holders who would otherwise be entitled to receive a fraction of an interest of on the basis of the conversion provided for in this article will instead receive a cash payment equal to the value of that fraction, based on the market value of an interest of as of the effective date of the merger.

(c) Each interest of will be converted into interest[s] of the new surviving entity () after merger.

(d) No fractional interests of before merger will be issued to the holders of interests of the surviving entity after merger. However, holders who would otherwise be entitled to receive a fraction of an interest of on the basis of the conversion provided for in this article will instead receive a cash payment equal to the value of that fraction, based on the market value of an interest of as of the effective date of the merger.

 

Exchange

If any interest of being exchanged in connection with this merger is evidenced by a certificate, each holder of that interest must surrender the certificate or certificates, properly endorsed, to the surviving entity or its transfer agent, and will receive in exchange a certificate or certificates representing the number of interests of the surviving entity into which the interests of have been converted.

 

MANAGEMENT OF SURVIVING ENTITY

Management and Control

The partners or managers of surviving entity have the sole and exclusive control of the business, subject to any limitations in the articles and operating agreement of the surviving entity.

 

Directors and Officers

The initial Board of Directors of the Surviving Entity will consist of Directors. Disappearing entity shall be entitled to nominate members of the Board of Directors of the surviving entity.

 

INTERPRETATION AND ENFORCEMENT

Notices

Any notice, request, demand, or other communication required or permitted under this Agreement may be delivered in person, delivered by certified mail, return receipt requested, or delivered by facsimile transmission. Deliveries by certified mail or by facsimile transmission will be sent to the address of the respective party as first indicated above or as may be updated in the future in writing by either party.

 

Counterpart Executions

This agreement may be executed in any number of counterparts, each of which shall be deemed an original.

 

Partial Invalidity

If any term of this agreement is held by a court of competent jurisdiction to be void and unenforceable, the remainder of the contract terms shall remain in full force and effect

 

Applicable Law

The validity, interpretation, and performance of this agreement shall be controlled by and construed under the laws of the State of .

 

Approvals

The office bearers and members of each constituent entity to this Merger Agreement have approved by the voting percentages required by the articles, operating agreement, and law the terms and conditions of this Agreement.

 

This Merger Agreement shall be signed by , , on behalf of and by , on behalf of .

 

 

 

:

 

 

 

By: Date:

By ,

 

 

:

 

 

 

By: Date:

By ,

 

 

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