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Reverse Triangular Merger Agreement Template for United States

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Key Requirements PROMPT example:

Reverse Triangular Merger Agreement

"I need a Reverse Triangular Merger Agreement for the acquisition of a mid-size healthcare technology company in California, where our Delaware parent company will use a newly formed subsidiary to acquire the target while maintaining its existing contracts and licenses, with closing expected by March 2025."

Document background
The Reverse Triangular Merger Agreement is a fundamental document in U.S. corporate law used when a company wishes to acquire another company while maintaining the target's corporate existence. This structure is often preferred because it minimizes third-party consent requirements and preserves the target's contracts, licenses, and permits. The agreement details all aspects of the transaction, including share conversion, representations and warranties, and operational covenants. It's particularly useful when the target has valuable contracts or licenses that would be disrupted by other merger structures. The document must comply with state corporate laws (often Delaware) and federal securities regulations.
Suggested Sections

1. Parties: Identification of Parent company, Merger Sub, and Target company

2. Background: Context and purpose of the merger transaction

3. Definitions: Key terms used throughout the agreement

4. The Merger: Structure, effects, and mechanics of the reverse triangular merger

5. Consideration: Terms of payment/exchange of shares

6. Representations and Warranties: Statements of fact by all parties about their business and operations

7. Covenants: Pre-closing and post-closing obligations of the parties

8. Closing Conditions: Requirements that must be met before closing

9. Termination: Circumstances under which agreement can be terminated

Optional Sections

1. Employee Matters: Treatment of employee benefits, compensation, and related arrangements in the context of the merger

2. Tax Matters: Specific tax treatment, allocations, and structuring considerations for the merger transaction

3. Financing: Terms and conditions of any financing arrangements required to complete the merger

Suggested Schedules

1. Disclosure Schedules: Detailed schedules containing exceptions to representations and warranties made by the parties

2. Form of Certificate of Merger: Legal document to be filed with Secretary of State to effectuate the merger

3. Surviving Corporation Governance Documents: Post-merger bylaws and articles of incorporation of the surviving entity

4. Required Consents Schedule: Comprehensive list of third-party approvals and regulatory consents needed for the merger

5. Material Contracts Schedule: List and copies of key agreements affecting the merger transaction

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Industries

Delaware General Corporation Law: Primary corporate law statute governing mergers involving Delaware corporations, including procedural requirements, shareholder rights, and corporate governance matters

Securities Act of 1933: Federal law governing the registration and disclosure requirements for securities offerings in connection with the merger

Securities Exchange Act of 1934: Federal law regulating securities trading, reporting requirements, and proxy solicitation rules for public companies involved in the merger

Hart-Scott-Rodino Antitrust Improvements Act: Federal law requiring pre-merger notifications and waiting periods for transactions meeting certain size thresholds

Internal Revenue Code Section 368(a)(2)(E): Tax code provision governing tax-free treatment of reverse triangular mergers when specific requirements are met

State Corporation Laws: Relevant state-specific corporate laws governing the merger process, shareholder rights, and corporate formalities

Blue Sky Laws: State securities laws requiring registration and disclosure of securities offerings within each relevant state

WARN Act: Federal law requiring advance notice of significant employment losses in connection with the merger

ERISA: Federal law governing employee benefit plans and their treatment in corporate transactions

Clayton Act: Federal antitrust law prohibiting anti-competitive mergers and acquisitions

Sherman Act: Federal antitrust law prohibiting monopolistic practices and restraints of trade

SEC Regulations: Federal securities regulations governing disclosure requirements, filing obligations, and registration requirements for merger transactions

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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