The Definitive Agreements

The Definitive Agreements address all of the areas that must be addressed and satisfied prior to closing. There are a multitude of agreements that must be prepared prior to closing. The agreements vary according to transaction. However, there are a number of items that must be addressed in the Definitive Agreements.

Here is a brief overview:

• Finalize a definitive merger agreement. The exact terms of what will take place and how it will take place is spelled out in this document.

• Structure the transaction. How is the transfer of shares going to take place? Are there any free trading shares that will be purchased by non-affiliates? Any forward or reverse splits of the stock? How are the liabilities going to be dealt with? Are there any notes that have conversion privileges? How will the existing business entity be vended out of the shell?

• Stock Purchase Agreements. This outlines the transfer of shares to the new shareholders. I have provided an example of such an agreement in Part 9.

• Prepare documents, including board and shareholder consents that signify approval. To the extent corporate approval has been obtained by written consent as opposed to shareholder meetings, send an information statement to the remaining shareholders of the public company.

At the time the merger agreement is consummated, a Form 8-K describing the terms of the merger must be filed with the SEC. A second 8-K, including a brief description of the assets acquired and the nature of the shares of the public company’s stock must be filed when the merger transaction closes. Finally, within four days after filing the second 8-K, an amendment, including two years of audited financials of the private target together with relevant pro formas of the combined entity, must be filed.

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