Analyze M&A Agreement Extractor — Find Risks Automatically

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger ("Agreement") is entered into as of March 1, 2025 ("Effective Date"), by and among:

ACQUIRER:
ZENITH TECHNOLOGIES INC., a Delaware corporation ("Acquirer" or "Parent")
Principal Address: 1500 Technology Center Drive, Santa Clara, CA 95054
Contact: General Counsel

MERGER SUBSIDIARY:
ZENITH ACQUISITION SUB LLC, a Delaware limited liability company and wholly-owned subsidiary of Acquirer ("Merger Sub")
Principal Address: 1500 Technol

{
  "document_type": "merger_agreement",
  "transaction_type": "merger",
  "effective_date": "2025-03-01",
  "parties": {
    "acquirer": {
      "name": "Zenith Technologies Inc.",
      "jurisdiction": "Delaware"
    },
    "target": {
      "name": "Innovate Software Solutions Inc.",
      "jurisdiction": "Delaware"
    },
    "merger_sub": {
      "name": "Zenith Acquisition Sub LLC",
      "type": "Reverse triangular"
    }
  },
  "transaction_structure": {
    "structure": "Reverse merger",
    "surviving_entity": "Innovate Software Solutions Inc. (Target)",
    "effect_of_merger": "Target continues as wholly-owned subsidiary of Acquirer; Merger Sub ceases to exist"
  },
  "consideration": {
    "total_consideration": "$750,000,000 (implied value)",
    "per_share_price": "$22.50 cash + 0.75 shares Acquirer stock",
    "consideration_type": "Mixed",
    "stock_consideration": {
      "exchange_ratio": "0.75 shares",
      "fixed_vs_floating": "Fixed",
      "collar": null
    },
    "earnout": {
      "applicable": true,
      "structure": "Revenue milestones: $25M if Year 1 revenue exceeds $100M; $50M if Year 2 revenue exceeds $150M",
      "maximum": "$75,000,000",
      "period": "24 months from Closing"
    },
    "adjustments": {
      "working_capital": true,
      "net_debt": true,
      "calculation": "Dollar-for-dollar adjustment from $15M target; Net debt adjustment for debt exceeding $5M"
    }
  },
  "treatment_of_securities": {
    "common_stock": "Converted to Merger Consideration ($22.50 cash + 0.75 Acquirer shares)",
    "preferred_stock": "Converted to Common Stock first, then to Merger Consideration",
    "options": "Assumed by Acquirer, converted to Acquirer options with adjusted exercise price and shares",
    "warrants": "Assumed by Acquirer, converted to Acquirer warrants on equivalent terms",
    "restricted_stock": "RSUs assumed by Acquirer, converted to Acquirer RSUs with same vesting schedule"
  },
  "representations_warranties": {
    "target_reps": [
      "Organization and good standing",
      "Capitalization",
      "Authority",
      "No conflicts",
      "Financial statements",
      "Absence of material adverse changes",
      "No material litigation",
      "Intellectual property ownership",
      "Compliance with laws",
      "Tax matters",
      "Employee benefits",
      "Environmental compliance",
      "Material contracts"
    ],
    "acquirer_reps": [
      "Organization and good standing",
      "Authority",
      "No conflicts",
      "Financing availability",
      "SEC filings accurate",
      "Acquirer stock validity"
    ],
    "survival": "18 months general, 36 months for fundamental representations",
    "disclosure_schedules": "Delivered with exceptions to representations"
  },
  "covenants": {
    "conduct_of_business": "Ordinary course; maintain existence; preserve relationships; restrictions on capex, hiring, securities issuance, dividends, debt, acquisitions",
    "no_shop": {
      "present": true,
      "exceptions": "Fiduciary out for Superior Proposals after good faith determination"
    },
    "go_shop": {
      "present": false,
      "period_days": null
    },
    "employee_matters": "12 months of comparable compensation and benefits; service credit for eligibility and vesting",
    "access_to_information": "Reasonable access to properties, books, and records"
  },
  "conditions_to_closing": {
    "mutual_conditions": [
      "No injunction or court order",
      "HSR clearance",
      "Target stockholder approval"
    ],
    "acquirer_conditions": [
      "Target representations true at Closing",
      "Target covenants performed",
      "Officer's certificate",
      "No Material Adverse Effect"
    ],
    "target_conditions": [
      "Acquirer representations true at Closing",
      "Acquirer covenants performed",
      "Officer's certificate",
      "NASDAQ listing approval"
    ],
    "regulatory_approvals": {
      "hsr": true,
      "other_antitrust": [],
      "cfius": false,
      "industry_specific": []
    },
    "shareholder_approval": {
      "target_approval": true,
      "acquirer_approval": false,
      "threshold": "Majority of outstanding Target shares"
    },
    "financing_condition": false,
    "mac_out": true
  },
  "termination": {
    "termination_rights": [
      "Mutual consent",
      "Outside Date (September 1, 2025)",
      "Final non-appealable order prohibiting Merger",
      "Material breach by other party (30-day cure)",
      "Target Board recommendation change",
      "Target acceptance of Superior Proposal"
    ],
    "termination_fee": {
      "target_fee": "$30,000,000 (4% of equity value)",
      "acquirer_fee": "$45,000,000 (6% of equity value)",
      "trigger_events": [
        "Target terminates for Superior Proposal",
        "Target Board changes recommendation",
        "Target enters alternative transaction within 12 months",
        "Acquirer financing failure",
        "Acquirer willful breach",
        "Acquirer fails to close when conditions satisfied"
      ]
    },
    "expense_reimbursement": "Target reimburses Acquirer up to $5,000,000 if terminated for Target's breach",
    "specific_performance": true
  },
  "closing": {
    "closing_date": "Third business day after conditions satisfied or waived",
    "outside_date": "2025-09-01",
    "extension_rights": "Up to 90 days if only regulatory approval outstanding"
  },
  "indemnification": {
    "survival_period": "18 months (36 months for fundamental reps, statute of limitations + 60 days for tax)",
    "indemnification_cap": "$37,500,000 (5% of equity value)",
    "basket_deductible": "$3,750,000 aggregate (0.5%); $100,000 per-claim threshold",
    "escrow": {
      "amount": "$37,500,000 (5% of equity value)",
      "term": "18 months",
      "release": "On 18-month anniversary, less pending claims"
    },
    "rw_insurance": true
  },
  "governing_law": "State of Delaware",
  "dispute_resolution": "Litigation",
  "signatures": {
    "acquirer_signed": true,
    "target_signed": true,
    "date_signed": "2025-03-01"
  }
}