1---2name: merger-agreement3description: Drafts U.S. merger agreements for M&A transactions covering merger structure and mechanics, consideration, equity treatment, reps and warranties, covenants, closing conditions, termination, and indemnification. Use when drafting or revising a merger agreement, negotiating statutory/triangular/reverse mergers, or handling purchase price, earnouts, escrow/holdback, MAE, HSR clearance, or closing deliverables.4---5
6# Merger Agreement
7
8Draft a signing-to-closing merger agreement reflecting agreed structure, economics, and risk allocation.
9
10## Prerequisites
11
121. **Parties and structure** — legal names, formation jurisdictions, surviving entity, merger type.
132. **Consideration** — cash/stock mix, exchange ratio, earnout/contingent terms, escrow/holdback.
143. **Capitalization** — cap tables, equity awards, convertibles, appraisal rights applicability.
154. **Diligence inputs** — financials, material contracts, IP, litigation, regulatory items.
165. **Regulatory/tax plan** — antitrust, securities, foreign investment review, tax treatment intent.
176. **Timeline and approvals** — board/stockholder approvals, outside date, conditions, financing.
187. **Ancillary docs** — voting agreements, support letters, employment/retention, escrow, registration rights.
19
20## Output Structure
21
22### 1) Document Skeleton
23
24```text
25MERGER AGREEMENT
26- Parties; Effective Date; Recitals
271. Definitions
282. The Merger; Effective Time; Effects
293. Merger Consideration; Payment Mechanics
304. Treatment of Equity Awards
315. Representations and Warranties of the Company
326. Representations and Warranties of Parent/Merger Sub
337. Covenants (Pre-Closing; Post-Closing)
348. Conditions to Closing
359. Termination
3610. Indemnification (or Remedies)
3711. Miscellaneous
38Signatures
39Exhibits and Schedules
40```
41
42### 2) Workflow
43
441. **Confirm transaction map** — parties, merger steps, filings, closing sequence.
452. **Draft mechanics and economics** — effective time, consideration flow, equity conversion.
463. **Allocate risk** — reps, covenants, conditions, termination fees, indemnification.
474. **Add governance and post-close** — board/officers, employee matters, transitional covenants.
485. **Attach schedules/exhibits** — disclosure schedules, charter/bylaws, ancillary agreement forms.
496. **Quality pass** — defined terms, cross-references, closing deliverables, schedule conflicts.
50
51### 3) Section Drafting Reference
52
53| Section | Required Inputs | Drafting Notes |
54|---|---|---|
55| Preamble/Recitals | Parties, purpose, structure | Identify merger form and intended effective time |
56| Definitions | Deal-specific terms | Define MAE, Knowledge, Permitted Liens, Material Contracts |
57| Merger Mechanics | Surviving entity, filings | Specify filings and effect on charter/bylaws |
58| Consideration | Price, exchange ratio | Cash/stock mix, payment mechanics, adjustment/earnout |
59| Equity Treatment | Options/RSUs/convertibles | Vesting, cancellation, assumption (see matrix below) |
60| Reps & Warranties | Diligence scope | Use schedules to qualify; set materiality/knowledge |
61| Covenants | Interim operations | Ordinary course, no-shop/go-shop, access |
62| Conditions | Regulatory, approvals | Mutual and party-specific conditions |
63| Termination | Outside date, breaches | Fees, cure periods, fiduciary out |
64| Indemnification | Survival, caps | Align with escrow/holdback; exclusive remedy |
65| Tax | Transaction intent | State intended treatment only if confirmed |
66| Miscellaneous | Governing law, notices | Specific performance, assignment limits |
67
68### 4) Equity Treatment Matrix
69
70| Security | Treatment at Effective Time | Notes |
71|---|---|---|
72| Common Stock | Convert into merger consideration at closing | Address fractional shares |
73| Preferred Stock | Convert per liquidation preference or negotiated ratio | Confirm approval thresholds |
74| Options | Cancel for spread or assume/convert | Specify exercise/withholding |
75| RSUs/PSUs | Vest, cancel, or assume per award terms | Address performance targets |
76| Warrants/Convertibles | Convert or terminate per instrument | Require consents if needed |
77
78### 5) Closing Deliverables
79
80- Officer certificates and bring-down
81- Secretary certificates, good standing, charter/bylaws
82- Third-party consents and payoff letters
83- Legal opinions (if required)
84- Escrow agreement and funding confirmations
85- FIRPTA and tax certifications (if applicable)
86- Stockholder approval documentation
87
88### 6) Schedules and Exhibits
89
90| Label | Purpose |
91|---|---|
92| Disclosure Schedules | R&W exceptions, numbered to match sections |
93| Articles/Certificate of Merger | Formation filing form |
94| Escrow Agreement | Holdback terms and release mechanics |
95| Voting/Support Agreement | Stockholder commitments |
96| Registration Rights Agreement | If stock consideration |
97| Employment/Retention Agreements | Key employee terms |
98
99## Guidelines
100
101- Match merger procedure to formation jurisdictions and charter requirements.
102- Align consideration mechanics with financing, escrow, and payment workflows.
103- Use disclosure schedules to qualify reps; avoid silent qualifiers in the main text.
104- Define MAE and Knowledge with clear carve-outs and standards.
105- Track no-shop/go-shop, fiduciary out, and matching rights with precision.
106- Include antitrust and other regulatory approval and timing obligations.
107- Treat tax-free reorganization language as conditional unless confirmed.
108- Confirm appraisal/dissenters' rights applicability and process.
109- Keep defined terms consistent; avoid duplicated or conflicting provisions.
110- Non-compete enforceability varies by state; tailor scope to local law if included.