5301 words 22 pagesINTERNATIONAL COMPANY LAW
TAKE HOME FINAL EXAM
1 – What is the function of (a) the merger, (b) Exchange of Certificates, (c) Representations and Warranties of Anthem and Cigna ( as well as of Anthem and Merger Sub), (d) Covenant Relating to the Conduct of Business, (e) Conditions to Consummation of the Merger, (f) Conditions Precedent, (g) Termination and Amendment, (h) General Provisions, and how do these provisions work together (please give examples from each sub-section to justify your answer)?
(a) In a merger agreement, the assets and liabilities of the firm which is being acquired end up being absorbed by the buyers firm. A merger could be the most effective and efficient way to enter a new market without the need of creating …show more content…
Anthem also will need to provide the sufficient cash for the merger before the effective time of the agreement. The Exchange Agent will also be responsible for holding the cash which will be presented in lieu of the fractional shares. The Exchange Fund in the agreement can be defined as the holder of Anthem Common Stocks which are being deposited in Exchange Agent. Shareholders of Cigna hold the Cigna Certificate personally and keep a certificate representing these shares. However the Book-Entry Shares holders are not required to deliver a Cigna Certificate or any other letter to receive the Merger Consideration stated above in the first paragraph. The owners of the Cigna Certificates and/ or Book Entry Shares will have no legal rights over Cigna Common Stock. This provision’s main motive is to provide a confident environment to the seller as well as protecting shareholders’ benefits.
(c) The buyer and the seller shall provide the relevant information of each of the companies to avoid any lack of knowledge between two of them. Representation and Warranties enable the both sides to carry out this function both at the time of the agreement and during the closing. Both parties must state these information solely based on truth and relevancy of their situation between the time of the agreement and the closing.
Both Anthem’s and Cigna’s representations and warranties involve matters regarding organizational concerns, capital structure,