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Merger Plan - Type B Reorganization

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This document sets forth a sample plan of merger between two corporations. As drafted, this agreement is a Type B reorganization, referring to Section 368 of the Internal Revenue Code. Shares of the seller’s stock are exchanged for the purchaser’s stock. This short-form merger agreement contains standard clauses commonly used in these types of agreements but it can be customized to ensure the specific terms of the parties’ agreement are addressed.

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									This document sets forth a sample plan of merger between two corporations. As
drafted, this agreement is a Type B reorganization, referring to Section 368 of the
Internal Revenue Code. Shares of the seller’s stock are exchanged for the purchaser’s
stock. This short-form merger agreement contains standard clauses commonly used in
these types of agreements but it can be customized to ensure the specific terms of the
parties’ agreement are addressed.
                              "B" Type Re-Organization Plan
   Agreement and plan of reorganization made as of the _________ day of _________[year], by and between
_________, a _________ corporation (called "purchaser") and _________, _________, and _________(called
"shareholders") all of the shareholders of _________, a _________ corporation (called "company").

                                               Plan of Reorganization

   This plan of reorganization shall be a reorganization within the meaning of Code Section 368(a)(1)(B) as
amended. Purchaser shall acquire all of the outstanding stock of the company in exchange solely for a part of
purchaser's voting common stock.

                                                     Agreement

   In order to consummate the above plan of reorganization and in consideration of the mutual benefits to be
derived and the mutual agreements contained, purchaser and shareholders approve and adopt this agreement and
plan of reorganization and mutually covenant and agree with each other as follows:

      1. Shares To Be Transferred and Shares To Be Issued.

          1.1. On the closing date the shareholders shall transfer to purchaser certificates for the number of shares
      of the company's common stock described in schedule 1 which in the aggregate shall represent all of the
      issued and outstanding shares of the company's common stock. These certificates shall be duly endorsed in
      blank by shareholders or accompanied by duly executed stock powers in blank with signatures guaranteed by
      a bank or trust company or member firm of the New York Stock Exchange.

         1.2. In exchange for the company's stock being transferred pursuant to subparagraph 1.1, purchaser shall
      on the closing date and contemporaneously with the transfer of company's common stock to it by
      shareholders issue and deliver to shareholders the number of shares of purchaser's common stock specified
      on schedule 1.

      2. Representations and Warranties of Shareholders.

          2.1. Ownership of Stock.

          Shareholders are the record owners and holders of the number of fully paid and nonassessable shares of
      the company's common stock listed in schedule 1 as of this date and will continue to own these shares of the
      company's common stock until delivery to the purchaser on the closing date and all shares of common stock
      are or will be on the closing date owned free and clear of all liens, encumbrances, charges and assessments of
      every nature and subject to no restrictions with respect to transferability. The shareholders will have full
      power and authority to assign and transfer their shares of the company in accordance with these terms.

         [Subparagraphs 2.2 through 2.5 shall be the same as subparagraphs 2.1 through 2.4 of the form in
      §3.2423 except that the references to "seller" shall be changed to "company" and, in addition, the following
      changes shall be made:]

          [In subparagraph 2.1(a), the following sentences shall be added:] The authorized capital stock of
      company is _________ shares of common stock, $_____ par value, of which _________ shares of stock are
      issued and outstanding.

          [In subparagraph 2.1(e) the clause reading "subject to the approval and adoption by the shareholders of
      seller contemplated hereby" shall be omitted]
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          [Subparagraph 2.1(f) shall be added as follows:]

          (f). Except for this agreement, there are no outstanding options, contracts, calls, commitments or demands
      of any character relating to authorized or issued stock of the company.

          [Subparagraph 2.4(k) shall be amended to read as follows:]

          (k). All negotiations relative to this agreement and the transactions contemplated have been carried on
      directly by shareholder with purchaser without the intervention of any broker or third party. Neither company
      nor shareholder has engaged, consented to or authorized any broker, investment banker or third party to act
      on its behalf directly as broker or finder in connection with the transactions contemplated by this agreement.

          [Subparagraph 2.6 shall be the same as subparagraph 2.5 of the form in §3.2423 except that the
      references to "seller" shall be changed to "shareholder"]

         [Subparagraph 2.7 shall be the same as subparagraph 3.4 of the form in §3.2423 except that the
      beginning reference to "he" shall be changed to "shareholder" and the references to "seller" shall be
      changed to "company"]

          [Subparagraph 2.8 shall be the same as subparagraph 3.5 of the form in §3.2423 except that the
      references to "seller" shall be changed to "company"]

      3. Representations and Warranties of Purchaser.

          [This paragraph shall be the same as paragraph 4 of the form in §3.2423]

      4. Covenants of Shareholders.

           [This paragraph shall be the same as paragraph 5 of the form in §3.2423 except that references to
      "seller" shall be changed to "company" and subparagraph 5.2(g) shall be modified to apply to "company and
      its subsidiaries," and subparagraph 5.3 shall be omitted]

      5. Conditions Precedent to Purchaser's Obligations.

          [This paragraph shall be the same as paragraph 6 of the form in §3.2423 except that in subparagraph 6.1
      the reference to "seller" shall be omitted; in subparagraph 6.2 the reference to "seller" shall be changed to
      "shareholder," the reference to "subparagraph 5.1" shall be changed to "subparagraph 4.1" and the
      reference to "subparagraph 13.2" shall be "subparagraph 12.2"; the references in the remaining
      subparagraphs to "seller" shall be changed to "company"; subparagraph 6.4 shall be omitted; in
      subparagraph 6.8 the reference to "subparagraph 13.4(a)" shall be changed to "subparagraph 12.4(a)";
      subparagraph 6.10 shall be omitted; and in subparagraph 6.12 the reference to "subparagraph 13.2(d)"
      shall be changed to "subparagraph 12.2(f)"]

      6. Conditions Precedent to Shareholders' Obligations.

          [This paragraph shall be the same as paragraph 7 of the form in §3.2423 except that the references to
      "seller" shall be changed to "shareholders"]

      7. Limitation on Survival and Effect of Certain Warranties, Representations and Covenants.

          [This paragraph shall be the same as paragraph 8 of the form in §3.2423]


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      8. Indemnification.

          [This paragraph shall be the same as paragraph 9 of the form in §3.2423 except that the references to
      "seller" shall be changed to "company" and subparagraph 9.1 shall be revised to read as follows:
      "Shareholders shall indemnify purchaser for any loss, cost, expense or other damage suffered by purchaser
      resulting from, arising out of, or incurred with respect to the falsity or the breach of any representation,
      warranty or covenant made by shareholders. Without limiting the generality of the above, purchaser shall be
      deemed to suffer loss, costs, expense or other damage if company suffers loss, costs, expense or other
      damage." In the next to last line of subparagraph 9.4 the words "seller or" shall be omitted]

      9. Covenant Not To Compete.

          [This paragraph shall be the same as paragraph 10 of the form in §3.2423 except that the reference to
      "seller" shall be changed to "company"]

      10. Security Act Provisions.

          10.1. Restrictions on Disposition of Shares.

          Shareholders covenant and warrant that the shares of common stock of purchaser to be received by them
      pursuant to this agreement are being acquired for their own account and for investment and not with the
      present view toward sale or distribution and will not be disposed of except (i) pursuant to an effective
      registration statement under the Securities Act of 1933, as amended, or (ii) any other transaction which, in the
      opinion of counsel acceptable to purchaser, is exempt from registration under the Securities Act of 1933, as
      amended, or the rules and regulations of the Securities and Exchange Commission. In order to effectuate the
      covenants of this subparagraph 10.1, an appropriate endorsement will be placed on the certificates for shares
      of common stock of purchaser delivered to shareholders pursuant to this agreement and stop transfer
      instructions shall be placed with the transfer agent for the securities.

         [Subparagraphs 10.2 through 10.7 shall be the same as subparagraphs 11.2 through 11.7 of the form in
      §3.2423 except that there shall be no reference to "seller"]

      11. Profit Sharing Plan and Other Employee Benefit Plans.

          [This paragraph shall be the same as paragraph 12 of the form in §3.2423 except that the references to
      "seller" shall be changed to "company"]

      12. Closing.

          12.1. Time and Place.

          [This subparagraph shall be the same as subparagraph 13.1 of the form in §3.2423]

          12.2. Documents To Be Delivered by Shareholders.

          At the closing, shareholders shall deliver to purchaser the following documents:
   (a) Certificates for _________ shares of company's common stock in the manner and form required by
subparagraph 1.1;
   (b) The minute book, stock transfer book, all books of account, records, contracts, tax returns and other
documents of company as purchaser may in writing request;
   (c) Written resignations effective on the closing date of all directors and officers of company except those
designated by purchaser;

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    (d) A general release in form and substance satisfactory to purchaser and its counsel of all claims shareholders
may have to the date of closing against company and the directors, officers, agents and employees of company
except as may be expressed in written contract expressly described and excepted in the release;
    (e) Certificates signed by the shareholders that the representations and warranties made by the shareholders in
this agreement are substantially accurate in all material respects on and as of the closing date with the same effect as
though the representations and warranties had been made on or given on and as of the closing date and that
shareholders have performed and complied with all their obligations under this agreement which are to be performed
or complied with by or prior to or on the closing date;
    (f) A written opinion from counsel for shareholders stated as of the closing date addressed to the purchaser
satisfactory in form and substance to the purchaser to the effect that:
        (1) Ownership of the company's common stock is as stated in subparagraph 2.1;
        (2) The corporate existence in good standing, qualification of company and its subsidiaries and authorized
    and issued stock of company and its subsidiaries is as stated in subparagraph 2.2;
        (3) This agreement has been duly executed and duly delivered by shareholders and constitutes a legal, valid
    and binding obligation by shareholders enforceable in accordance with its terms;
        (4) Counsel has no knowledge of any of the proceedings as stated in subparagraph 2.5(e);
        (5) To the best of counsel's knowledge company is in compliance with all statutes, regulations, rules and
    executive orders of all government authority as stated in subparagraph 2.5(d);
        (6) To the best of counsel's knowledge shareholders' representations and warranties in subparagraphs 2.5(h)
    and 2.5(l) are true and correct;
    (g) Certificates or letters from shareholders evidencing the taking of shares in accordance with the provisions of
paragraph 10 and their understanding of the restrictions;
    (h) Any other documents of transfer, certificates of authority, and other documents as purchaser may reasonably
request.

          12.3. Documents To Be Delivered by Purchaser.

           [This subparagraph shall be the same as subparagraph 13.3 of the form in §3.2423 except that the
       reference to "subparagraph 4.1" shall be changed to "subparagraph 3.1" and the references to "seller" shall
       be changed to "shareholders"]

          12.4. Other Documents To Be Delivered at the Closing.

           [This subparagraph shall be the same as subparagraph 13.4 of the form in §3.2423 except that the
       references to "seller" shall be changed to "company"]

          13 through 22 and Conclusion.

           [These paragraphs and the conclusion shall be the same as paragraphs 15 through 24 and the conclusion
       of the form in §3.2423 except that the references to "seller" shall be changed to "shareholders" and the
       company shall not sign]




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