Legal Analysis Of No-Talking Provisions In Merger Agreements

The　dissertation　introduces　the　no-talking　provisions　in　merger　agreements,　cites　some　cases　to　analyze　the　opinions　of　courts,　exploring　the　rationality　and　the　uncertainty　of　this　provision,　and　give　some　advices　to　deal　with　the　uncertainty.　The　dissertation　consists　of　three　parts ——the　preface,　the　text　and　the　conclusion.　　In　the　preface,　it　briefly　introduces　the　mergers　and　acquisitions　both　in　domestic　and　international,　and　indicates　the　importance　of　no-talking　provision　by　Xinqiao　Investment　Co.　acquired　Development　Bank　Share　Ltd.　Co.　Shenzhen.　The　text　covers　four　chapters:　In　the　first　chapter,　it　gives　the　definition　of　the　no-talking　provisions,　introduces　the　types　of　M　&　A,　the　M　&　A　contracts　and　lock-up　provisions,　the　definition　of　no-talking　provisions　and　the　legal　effects　of　no-talking　provisions.　In　the　second　chapter,　it　introduces　the　conflicts　between　the　target　company　shareholders'　rights　and　the　merger　company's　contract　rights.　It　analyzes　the　target　company's　shareholders'　rights,　the　fiduciary　duties　of　board,　the　goal　to　protect　the　contract　rights　and　the　ways　to　realize　the　contract　rights.　It　discusses　the　tension　between　the　target　company　shareholders'　rights　and　the　merger　company's　contract　rights,　the　limitation　of　indemnification　of　target　company　and　the　courts　subordinate　contractual　rights　to　shareholder　rights.　In　chapter　three,　it　analyzes　the　comments　of　cases.　First,　it　introduces　three　cases　in　Delaware:　　1,Phelps　Dodge　Corp.　v.　Cyprus　Amax　Minerals　Co.　2,ACE　Ltd.　V.　Capital　Re　Corp.　3,In　re　IXC　Communications,　Inc.'s　Shareholders'　Litig.　Next,　it　introduces　some　standards　of　commercial　judgment　rules:　　1,Primary　Purpose　Test;　2,　Proportionality　Test——Unocal　Principle　3,Value　Maximization　Test——Revlon　Principle　4,Not　interfere　with　the　shareholders'　rights　5,　Fair　Auctioneer　Test　6,The　maximize　of　value　and　approachability　test;　Then　it　uses　the　above　principles　to　comment　the　no-talking　provisions,　states　the　relationship　between　the　no-talking　provisions　and　the　fiduciary　duties.　In　chapter　four,　it　explains　because　of　different　facts　in　each　cases　there　are　different　results.　It　introduces　the　different　comments,　the　uncertainty　of　no-talking　provisions　and　gives　some　advices　for　counselors　to　draft　effective　no-talking　provisions.　Finally,　it　concludes　that　we　should　further　analyze　no-talking　provisions　and　protect　the　merger　company's　shareholders'　rights.