Merger refers to the situation where one of the constituent corporations remains in being and absorbs into itself the other constituent corporation. It refers to the case where no new corporation is created, but where one of the constituent corporations ceases to exist, being absorbed by the remaining corporation.
Generally, statutes authorizing the combination of corporations prescribe the steps by which consolidation or merger may be effected. The general procedure is that the constituent corporations make a contract setting forth the terms of the merger or consolidation, which is subsequently ratified by the requisite number of stockholders of each corporation.
New York Checklist of Matters that Should be Considered in Drafting a Merger Agreement A merger agreement is a crucial legal document that outlines the terms and conditions of a merger between two companies. When conducting a merger in New York, it is essential to consider a comprehensive checklist of matters that should be addressed in the merger agreement. This helps ensure that all necessary aspects of the merger are properly covered and that both parties are protected. Below is a detailed description of the various matters that should be considered while drafting a merger agreement in New York: 1. Parties involved: Clearly identify the parties involved in the merger, including the acquiring company (buyer) and the target company (seller). 2. Purpose and structure of the merger: Define the purpose and objectives of the merger and specify the type of merger, such as a stock merger, asset merger, or subsidiary merger. 3. Purchase price and payment terms: Clearly state the purchase price and how it will be paid, whether in cash, stocks, or a combination of both. Include provisions for any adjustments to the purchase price, including earn-outs or contingencies. 4. Representations and warranties: Include detailed representations and warranties made by both parties regarding the accuracy of their financial statements, legal compliance, and disclosure of any material information. 5. Due diligence and disclosure: Outline the scope of due diligence conducted by both parties and specify the timeline for any disclosures made before the merger. Include provisions for the disclosure of any potential liabilities, litigation, or regulatory matters. 6. Confidentiality and non-disclosure agreements: Implement robust provisions to protect sensitive information during the due diligence process and beyond, including non-disclosure agreements (NDAs) and confidentiality clauses. 7. Employee matters: Address the treatment of employees, including whether there will be any layoffs, severance packages, or changes to employee benefits after the merger. 8. Conditions precedent: List any conditions that must be met before the merger can be completed, such as obtaining necessary regulatory approvals or shareholder consents. 9. Indemnification provisions: Establish mechanisms for indemnification in case of any breaches of warranties or representations, including limitations on liability and survival periods. 10. Post-merger integration: Outline how the companies will be integrated after the merger, including the process of combining operations, systems, and personnel. 11. Dispute resolution: Specify the governing law (usually New York) and the jurisdiction for any disputes arising from the merger agreement. Include provisions for alternative dispute resolution mechanisms like arbitration or mediation. Different Types of New York Checklist of Matters that Should be Considered in Drafting a Merger Agreement: 1. Technology Company Merger Checklist: This checklist focuses on the unique considerations that arise when merging two technology companies, such as the protection of intellectual property, licensing agreements, and data privacy concerns. 2. Financial Institution Merger Checklist: This checklist addresses specific issues faced by merging financial institutions, including regulatory compliance, customer consent, and the impact on existing contracts and obligations. 3. Cross-Border Merger Checklist: When a merger involves companies from different countries, additional considerations such as international tax implications, foreign regulatory compliance, and the treatment of foreign subsidiaries need to be taken into account. In conclusion, a well-drafted merger agreement is the foundation for a successful merger. By considering all the relevant matters outlined in a New York Checklist of Matters that Should be Considered in Drafting a Merger Agreement, parties involved can protect their interests, minimize disputes, and ensure a smooth transition during the merger process.
