Merger Agreement Template

AGREEMENT AND PLAN OF MERGER

Date: Date

Between:

Acquiring Company:

Company Name Organized under laws of: State/Country Address: Address ("Acquiring Company" or "Survivor")

AND

Target Company:

Company Name Organized under laws of: State/Country Address: Address ("Target Company")

RECITALS

WHEREAS, the Boards of Directors of both companies have determined that this merger is in the best interests of their respective shareholders;

WHEREAS, the parties desire that Target Company merge with and into Acquiring Company, with Acquiring Company as the surviving corporation;

WHEREAS, the merger is intended to qualify as a tax-free reorganization under Internal Revenue Code Section;

NOW, THEREFORE, the parties agree as follows:

1. THE MERGER

### 1.1 Merger Transaction

At the Effective Time (as defined below), Target Company shall be merged with and into Acquiring Company in accordance with applicable state law. Acquiring Company shall be the surviving corporation (the "Surviving Corporation").

### 1.2 Effective Time

The merger shall become effective upon filing of Articles of Merger with the State Secretary of State, or at such later time as specified in the Articles of Merger (the "Effective Time").

Estimated Effective Date: Date

### 1.3 Effects of Merger

At the Effective Time:

• The separate existence of Target Company shall cease
• Surviving Corporation shall possess all rights, privileges, powers, and franchises of both companies
• All debts, liabilities, and obligations of Target Company become obligations of Surviving Corporation
• Title to all property vests in Surviving Corporation
• Articles of Incorporation of Acquiring Company shall remain in effect
• Bylaws of Acquiring Company shall remain in effect

2. CONVERSION OF SHARES

### 2.1 Conversion of Target Company Shares

At the Effective Time, each issued and outstanding share of Target Company stock (except as provided below) shall be converted into the right to receive:

Merger Consideration:

Cash: \$Amount per share Stock: Exchange Ratio shares of Acquiring Company Common Stock Mixed: \$Amount cash + Ratio shares

Total Estimated Merger Consideration: \$Amount or Number shares

### 2.2 Treatment of Stock Options and Warrants

Target Company Stock Options:

Assumed by Acquiring Company with adjusted terms Cashed out at \$Amount per option Converted to Acquiring Company options at Ratio

Target Company Warrants:

Converted to Acquiring Company warrants Cashed out at fair value Other treatment

### 2.3 Acquiring Company Shares

Shares of Acquiring Company issued and outstanding immediately prior to Effective Time shall remain outstanding and shall not be affected by the merger.

### 2.4 Fractional Shares

No fractional shares shall be issued. Fractional shares shall be Rounded up/Rounded down/Paid cash equal to fair market value.

### 2.5 Dissenting Shares

Shares held by shareholders who properly exercise appraisal rights under applicable law shall not be converted but shall be entitled to payment of fair value as determined by applicable statute.

### 2.6 Exchange Procedures

Promptly after Effective Time, Acquiring Company shall mail to Target Company shareholders:

• Letter of transmittal
• Instructions for surrendering stock certificates
• Information about merger consideration

3. REPRESENTATIONS AND WARRANTIES

### 3.1 Representations of Target Company

Target Company represents and warrants:

Organization and Authority:

• Duly organized, validly existing, and in good standing
• Has corporate power and authority to own properties and conduct business
• Has authority to enter into this Agreement

Capitalization:

• Authorized capital: Number shares Classes
• Issued and outstanding: Number shares
• No other securities, options, or convertible instruments except: List

Financial Statements:

• Financial statements delivered are accurate and present fairly financial condition
• Prepared in accordance with GAAP
• No material liabilities except as disclosed

No Material Adverse Change:

• No material adverse change in business, assets, or financial condition since Date

Compliance:

• In compliance with all applicable laws and regulations
• All necessary licenses and permits obtained
• No violations of laws or regulations

Litigation:

• No pending or threatened litigation except: List or state "None"

Contracts:

• All material contracts disclosed
• No defaults under material contracts

Employees:

• Number employees
• No labor disputes
• Compliance with employment laws

Intellectual Property:

• Owns or has rights to all IP used in business
• No infringement claims

Taxes:

• All tax returns filed
• All taxes paid
• No audits or disputes

### 3.2 Representations of Acquiring Company

Acquiring Company represents and warrants:

• Duly organized and in good standing
• Authority to enter this Agreement
• Has financial resources to pay cash consideration (if applicable)
• Merger consideration shares (if applicable) duly authorized
• No violations of law or agreements by entering this transaction

4. COVENANTS

### 4.1 Conduct of Business Pending Closing

From date of this Agreement until Closing, Target Company shall:

Ordinary Course:

• Conduct business in ordinary course consistent with past practice
• Use reasonable efforts to preserve business organization and relationships

Prohibited Actions (without Acquiring Company consent):

• Issue, sell, or grant any securities
• Declare or pay dividends
• Amend governing documents
• Acquire or dispose of material assets
• Incur debt exceeding \$Amount
• Enter into material contracts
• Increase employee compensation (except in ordinary course)
• Grant stock options or equity awards

### 4.2 Regulatory Approvals

Parties shall cooperate to obtain all required regulatory approvals including:

• List required approvals - antitrust, industry-specific, foreign investment, etc.

### 4.3 Shareholder Approval

Each party shall:

• Call shareholder meeting
• Prepare and distribute proxy materials
• Use reasonable efforts to obtain shareholder approval

### 4.4 Access and Information

Target Company shall provide Acquiring Company reasonable access to:

• Properties and facilities
• Books and records
• Personnel
• Advisors

### 4.5 Notification

Target Company shall promptly notify Acquiring Company of:

• Material adverse changes
• Litigation or governmental investigations
• Breach of representations or covenants

### 4.6 No Solicitation

Target Company shall not:

• Solicit alternative acquisition proposals
• Engage in discussions with third parties regarding acquisition
• Provide information to third parties in connection with acquisition proposals

Exceptions: May respond to unsolicited superior proposals to extent required by fiduciary duties.

5. CONDITIONS TO CLOSING

### 5.1 Conditions to Each Party's Obligations

• Shareholder Approval: Obtained from both companies' shareholders
• Regulatory Approvals: All required governmental approvals obtained
• No Injunctions: No order prohibiting merger
• Legal Compliance: Merger complies with all applicable laws

### 5.2 Conditions to Acquiring Company's Obligations

• Representations True: Target Company's representations remain true and correct
• Performance: Target Company performed all obligations
• No Material Adverse Effect: No material adverse change in Target Company
• Officer's Certificate: Certificate regarding representations and performance
• Legal Opinion: Receipt of legal opinion
• Key Employee Agreements: Key employees executed employment/non-compete agreements
• Other specific conditions

### 5.3 Conditions to Target Company's Obligations

• Representations True: Acquiring Company's representations remain true
• Performance: Acquiring Company performed obligations
• Officer's Certificate: Certificate regarding representations
• Merger Consideration: Acquiring Company ready to deliver consideration

6. TERMINATION

### 6.1 Termination Events

This Agreement may be terminated:

By Mutual Consent: Written agreement of both parties

By Either Party:

• If Closing has not occurred by Date (Outside Date)
• If shareholder approval not obtained
• If governmental approval denied
• If material breach by other party not cured within 30 days

By Acquiring Company:

• Material adverse effect on Target Company
• Target Company breaches no-solicitation covenant

By Target Company:

• To accept superior proposal (subject to termination fee)

### 6.2 Effect of Termination

Upon termination:

• No further obligations except surviving provisions
• Confidentiality obligations continue
• Termination fee may be payable

### 6.3 Termination Fee

Target Company shall pay Acquiring Company \$Amount if:

• Target Company terminates to accept superior proposal
• Agreement terminated due to failure to obtain shareholder approval and superior proposal pending
• Other triggering events

7. INDEMNIFICATION

### 7.1 Survival of Representations

Representations and warranties survive Closing for:

• General representations: 18 months
• Tax representations: Statute of limitations period
• Fundamental representations (organization, authority, capitalization): 3 years

### 7.2 Indemnification by Target Company Shareholders

Target Company shareholders shall indemnify Acquiring Company for:

• Breach of representations and warranties
• Pre-Closing liabilities
• Breach of covenants

Limitations:

• Basket: No claims unless exceed \$Amount
• Cap: Maximum liability of \$Amount or % of merger consideration
• Escrow/holdback: \$Amount held in escrow for period

### 7.3 Indemnification by Acquiring Company

Acquiring Company shall indemnify Target Company shareholders for breach of its representations and warranties.

### 7.4 Indemnification Procedures

Claims:

1. Written notice to indemnifying party 2. Opportunity to defend 3. Indemnified party cooperates

Third-Party Claims:

Indemnifying party may assume defense or indemnified party may defend and seek indemnification.

8. CLOSING

### 8.1 Closing Date

Closing shall occur on Date or Number days after satisfaction of all conditions, at Location or via electronic exchange.

### 8.2 Deliveries at Closing

Target Company Delivers:

• Articles of Merger
• Officer's Certificate
• Secretary's Certificate
• Legal Opinion
• Resignations of directors/officers (if requested)
• Stock certificates or affidavits of loss
• Other documents

Acquiring Company Delivers:

• Merger consideration (cash/stock certificates)
• Officer's Certificate
• Legal Opinion
• Other documents

9. EMPLOYEES AND BENEFITS

Employment:

All Target Company employees offered employment Key employees only: List Employment at will

Compensation: Comparable to current compensation for period

Benefits: Credit for service with Target Company for vesting and eligibility

Severance: Treatment of severance obligations

10. GENERAL PROVISIONS

### 10.1 Expenses

Each party bears its own transaction expenses including legal, accounting, and advisory fees.

### 10.2 Entire Agreement

This Agreement constitutes entire agreement and supersedes all prior negotiations and agreements.

### 10.3 Amendments and Waivers

Amendments must be in writing signed by both parties. Waivers must be in writing.

### 10.4 Assignment

Neither party may assign without prior written consent.

### 10.5 Governing Law

Governed by laws of State, without regard to conflict of law principles.

### 10.6 Dispute Resolution

Disputes resolved through: 1. Good faith negotiation 2. Mediation in Location 3. Binding arbitration under Rules in Location

### 10.7 Notices

To addresses set forth above or as updated in writing, by certified mail or email with confirmation.

### 10.8 Severability

If any provision invalid, remaining provisions remain in effect.

### 10.9 Counterparts

May be executed in counterparts, each deemed an original.

### 10.10 Publicity

No press release without mutual approval except as required by law or stock exchange rules.

SIGNATURES:

ACQUIRING COMPANY:

By: _______________________

Name: Name

Title: Title

Date: _______________________

TARGET COMPANY:

By: _______________________

Name: Name

Title: Title

Date: _______________________

EXHIBITS:

A: Disclosure Schedules B: Form of Articles of Merger C: Form of Employment Agreements D: Other exhibits