DRAFT: 9/10/2007
EXCERPTS FROM SAMPLE TERMINATION
AND “BREAK-UP” FEE SECTIONS OF AN
AGREEMENT AND PLAN OF MERGER AND
REORGANIZATION FOR A STOCK-FOR-STOCK
MERGER INVOLVING TWO PUBLIC COMPANIES
OF UNEQUAL SIZE (CONTAINING PROVISIONS
FAVORABLE TO THE TARGET COMPANY)
8.1 Termination. This Agreement may be terminated prior to the Effective Time (whether before or after approval of the Merger by the Required Company Stockholder Vote):
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(d) by either Parent or the Company if (i) the Company Stockholders’ Meeting (including any adjournments thereof) shall have been held and completed and the Company’s stockholders shall have taken a final vote on a proposal to approve this Agreement and the Merger, and (ii) the approval of this Agreement and the Merger by the Required Company Stockholder Vote shall not have been obtained;
(e) by either Parent or the Company if the Board of Directors of the Company shall have withheld, withdrawn or modified in a manner adverse to Parent its approval or recommendation of the Merger, or approved or recommended any Superior Proposal;
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8.3 Expenses; Termination Fees.
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(b) If (i) prior to the time of the Company Stockholders’ Meeting at which a final vote is taken by the Company’s stockholders on a proposal to approve this Agreement and the Merger, there shall have been publicly announced by a third party (other than Parent or an affiliate of Parent) an Acquisition Proposal, (ii) such Acquisition Proposal shall have been pending at the time of such Company Stockholders’ Meeting and shall not have been withdrawn, (iii) the approval of this Agreement and the Merger by the Required Company Stockholders Vote shall not have been obtained at such Company Stockholders’ Meeting, (iv) this Agreement shall have been validly terminated by Parent or the Company pursuant to Section 8.1(d), (v) Parent shall not have materially breached any provision of this Agreement at or prior to the time of the termination of this Agreement pursuant to Section 8.1(d), (vi) no Material Adverse Effect on Parent shall have occurred since the date of this Agreement and no event or circumstance shall have occurred or shall exist at any time on or after the date of this Agreement that could reasonably be expected to have a Material Adverse Effect on Parent, and (vii) within 270 days after the termination of this Agreement pursuant to Section 8.1(d), the transaction contemplated by the Acquisition Proposal that was pending at the time of such Company Stockholders’ Meeting shall have been consummated by the Company, then the Company shall pay to Parent the sum of $_____ [1% of dollar value of current transaction] within five business days after the consummation of such transaction.
(c) If (i) this Agreement shall have been validly terminated by Parent or the Company pursuant to Section 8.1(e), (ii) Parent shall not have materially breached any provision of this Agreement at or prior to the time of such termination, and (iii) no Material Adverse Effect on Parent shall have occurred since the date of this Agreement and no event or circumstance shall have occurred or shall exist at any time on or after the date of this Agreement that could reasonably be expected to have a Material Adverse Effect on Parent, then the Company shall pay to Parent the sum of $[______] [1% of dollar value of current transaction] within five business days after the termination of this Agreement.
CAVEAT: These sample provisions are intended only to serve as examples of hypothetical provisions. Every provision must be carefully tailored to reflect the specific terms of the transaction to which it relates; accordingly, it may be necessary to make substantial modifications to these sample provisions before they can be used in the context of any proposed transaction.