Overview of the Google Inc. Merger Agreement and Motorola Mobility Holdings, Inc.
With the permission of the author of the material, I present to you for review a review of the Google Inc. merger agreement. and Motorola Mobility Holdings, Inc.
Discussions about how, where, why Google bought Motorola and what would come of it, died down, sharp tongues joked, the wave was, the wave passed. The official text of the Google Inc. Merger Agreement fell into my hands. and Motorola Mobility Holdings, Inc., dated August 15, 2011 (you can read here ). I must tell you the agreement is far from small, all 68 pages of selected legal slang. Therefore, we will have a lot of familiarity with the works of American lawyers. Now episode one - a sightseeing tour.
The first thing that strikes the eye, in addition to the thickness of the document, is its creepy appearance. The $ 12.5 billion contract is laid out like a pamphlet on slimming advertising in my inbox. Why write in HUGE letters, and then further emphasize that horrible? To draw attention to the term, it is enough to make it bold, and important pieces of text can always be taken out in a separate block. I do not ask you to do Esquire, but read at least the Typography for Lawyers of your fellow countryman.
')
By the way, did you know that Google Inc., which positions itself as a California corporation, is registered in the state of Delaware? This is despite the fact that the legal and postal addresses of Californian corporations.
The state of Delaware is historically very advanced - they were the first to sign the US Constitution. Today it is a unique offshore zone with preferential taxation, well-thought-out corporate law and a judicial system loyal to large corporations. The staff even formed a special Lord Chancellor Court ( Delaware Court of Chancery ), which deals with corporate disputes. In an agreement between Google Inc. and Motorola Mobility Holdings, Inc. as a special jurisdiction, it is the Lord Chancellor's Court that is indicated. Motorola by the way is also registered in Delaware.
Motorola’s takeover mechanism is legally quite simple - Google creates a subsidiary company called RB98 INC, to which Motorola’s assets will be attached while preserving the brand and the coveted patents. That's why there are three signatures on page 68 of the contract: Google Vice President David C. Drummond, Motorola Sanjay K. Jha CEO and RB98 CEO Donald S. Harrison (and was a Google investment advisor ...). Where does this stupid name for the branch come from? Nobody knows, there is an assumption that RB is the name of the chemical element Rubidium, and 98 is the year Google was founded ...
The transaction price is $ 12,500,000,000 or 360,500,000,000 rubles, i.e. somewhere at the level of investment in high-speed tram Medvedkovo-Ostankino . Interestingly, Google has taken on non-standard responsibility for disrupting the deal through the fault of the controlling anti-monopolists. Thus, under the terms of the contract, in case of termination of the agreement, the largest search engine is obliged to pay $ 2.5 billion in compensation. This is approximately 20% of the transaction value, whereas usually it is no more than 2-3%. Motorola, in turn, in the event of dissolution through its own fault, is obliged to pay compensation of only $ 375 million.
The text of the contract is so detailed that it is easy to get the contacts of the lawyers developing the text and the terms of the agreement. On the side of Google Inc. Cleary Gottlieb Steen & Hamilton LLP , big, strong and rich, which have 14 branches in the largest capitals of the world (including Moscow), seventy years of practice and more than a thousand lawyers, are not on the side of Motorola either, but still with a smaller rank - Wachtell, Lipton, Rosen & Katz , who should be ashamed of their homepage. Plus, it’s significant that Google’s three partners worked on the agreement - Victor I. Lewkow , Ethan A. Klingsberg and Matthew P. Salerno, plus overseeing everyone David C. Drummond - Vice President and Head of Legal at Google, and Motorola only one David C. Karp .
At present, an excursion to the American contractual practice can be considered valid and for this reason ended. In the next series, read about the useful experience that can be gleaned, solving legal terms, as well as exposing the mistakes and blunders of American colleagues. Stay with us.
And we begin with the fact that virtually, but firmly and strongly shake hands with the gentlemen lawyers who worked on the agreement. Write a 68 page contract, in which every little thing was rewritten and discussed ten times, is worth a lot.
One of these little things immediately catches the eye from the cover of the contract: “Dated as of August 15, 2011”. What prevented lawyers from writing the standard: “Dated August 15, 2011”? The fact is that the latter construction is applied only in cases when the contract is concluded on the same day that it is signed. In the case of Google and Motorola, the day the contract is signed is not tied to the day an agreement is reached. For example, Google could sign the contract on August 10, and Motorola - on December 14 or even December 31, 2011. By the way, conspiracy theory - in any official document from Google and Motorola there is no word sign (signed). Press releases speak only about reaching an agreement ...
We leaf through the contract further. New York lawyers wrote a very convenient table of contents with all the article titles and page numbers. With the help of the table of contents it is immediately obvious that my favorite statements and guarantees take up almost half of the contract.
This is a section of the contract in which the parties indicate all facts and circumstances surrounding the transaction that may directly or indirectly affect the future of the agreement. Considering that the subject matter of the contract is the property complex of Motorola Corporation, it is not surprising that the parties approached this section as responsibly as possible.
For reference, understanding of statements and guarantees in the legal Anglo-American consciousness for a long time could not find unity, and only at the end of the twentieth century did American practice develop a unified approach. In particular, the case of Chris v. Henderson ( Krys v. Henderson ), and later the Model Stock Purchase Agreement 1995 and the Model Asset Purchase Agreement 2001 , published by the Business Law Department of the American Association Lawyers give the following definitions:
“A statement is a statement about existing facts in the past and present, guarantees are promises about existing and upcoming facts that are reliable or will be.”
“[Motorola] and all units are properly organized, legally operating in good condition (to the extent that such concepts are established in the relevant jurisdiction) under the Law of the place of incorporation.” Motorola declares and guarantees.
Google claims and guarantees exactly the same thing:
“The legal share capital of the Company [Motorola] consists of 900,000,000 [ordinary] shares and 500,000 preferred shares, each at $ 0, 01”
“There are no lawsuits, claims, lawsuits, complaints, court proceedings, court proceedings, or government or administrative investigations that are expected or, according to [Motorola], threaten or are related to [Motorola] or any of its subsidiaries, except for those processes that, individually or together, do not have or will not have a reasonably expected significant negative impact. ”
By themselves, such statements and guarantees are no more than declarations, but with them a rather serious responsibility is linked.
In case it turns out that the statements and guarantees given by the party are not true, within 30 days the party will have to correct everything, cure the agreement. Otherwise, the contract will be terminated and the guilty party will have to pay compensation.
In particular, if tomorrow it becomes known that Motorola does not launch Atrix 4G in Europe, because Apple, like a maneuver with Samsung, has banned selling the phone in the Old World, Motorola will have to pay Google $ 375,000,000 .
It is curious that all legal correspondence regarding the contract, whether a complaint or a remark can be sent by one party to the other, either by courier, or by fax or electronic mail, if only it were possible to reliably determine whether the message was received. I think that Peter Didenko , who advocates for electronic document circulation, would have approved such a clause in Russian treaties.
As for me, I advise you to take a closer look at the statements and guarantees, and as a warm-up read the wonderful book by Charles Fox “Drafting Contracts” , maybe someday I will tell about this topic in a little more detail ...
First impression
Discussions about how, where, why Google bought Motorola and what would come of it, died down, sharp tongues joked, the wave was, the wave passed. The official text of the Google Inc. Merger Agreement fell into my hands. and Motorola Mobility Holdings, Inc., dated August 15, 2011 (you can read here ). I must tell you the agreement is far from small, all 68 pages of selected legal slang. Therefore, we will have a lot of familiarity with the works of American lawyers. Now episode one - a sightseeing tour.
The first thing that strikes the eye, in addition to the thickness of the document, is its creepy appearance. The $ 12.5 billion contract is laid out like a pamphlet on slimming advertising in my inbox. Why write in HUGE letters, and then further emphasize that horrible? To draw attention to the term, it is enough to make it bold, and important pieces of text can always be taken out in a separate block. I do not ask you to do Esquire, but read at least the Typography for Lawyers of your fellow countryman.
')
By the way, did you know that Google Inc., which positions itself as a California corporation, is registered in the state of Delaware? This is despite the fact that the legal and postal addresses of Californian corporations.
The state of Delaware is historically very advanced - they were the first to sign the US Constitution. Today it is a unique offshore zone with preferential taxation, well-thought-out corporate law and a judicial system loyal to large corporations. The staff even formed a special Lord Chancellor Court ( Delaware Court of Chancery ), which deals with corporate disputes. In an agreement between Google Inc. and Motorola Mobility Holdings, Inc. as a special jurisdiction, it is the Lord Chancellor's Court that is indicated. Motorola by the way is also registered in Delaware.
Motorola’s takeover mechanism is legally quite simple - Google creates a subsidiary company called RB98 INC, to which Motorola’s assets will be attached while preserving the brand and the coveted patents. That's why there are three signatures on page 68 of the contract: Google Vice President David C. Drummond, Motorola Sanjay K. Jha CEO and RB98 CEO Donald S. Harrison (and was a Google investment advisor ...). Where does this stupid name for the branch come from? Nobody knows, there is an assumption that RB is the name of the chemical element Rubidium, and 98 is the year Google was founded ...
The transaction price is $ 12,500,000,000 or 360,500,000,000 rubles, i.e. somewhere at the level of investment in high-speed tram Medvedkovo-Ostankino . Interestingly, Google has taken on non-standard responsibility for disrupting the deal through the fault of the controlling anti-monopolists. Thus, under the terms of the contract, in case of termination of the agreement, the largest search engine is obliged to pay $ 2.5 billion in compensation. This is approximately 20% of the transaction value, whereas usually it is no more than 2-3%. Motorola, in turn, in the event of dissolution through its own fault, is obliged to pay compensation of only $ 375 million.
The text of the contract is so detailed that it is easy to get the contacts of the lawyers developing the text and the terms of the agreement. On the side of Google Inc. Cleary Gottlieb Steen & Hamilton LLP , big, strong and rich, which have 14 branches in the largest capitals of the world (including Moscow), seventy years of practice and more than a thousand lawyers, are not on the side of Motorola either, but still with a smaller rank - Wachtell, Lipton, Rosen & Katz , who should be ashamed of their homepage. Plus, it’s significant that Google’s three partners worked on the agreement - Victor I. Lewkow , Ethan A. Klingsberg and Matthew P. Salerno, plus overseeing everyone David C. Drummond - Vice President and Head of Legal at Google, and Motorola only one David C. Karp .
At present, an excursion to the American contractual practice can be considered valid and for this reason ended. In the next series, read about the useful experience that can be gleaned, solving legal terms, as well as exposing the mistakes and blunders of American colleagues. Stay with us.
More detailed analysis. Unusual legal constructions
And we begin with the fact that virtually, but firmly and strongly shake hands with the gentlemen lawyers who worked on the agreement. Write a 68 page contract, in which every little thing was rewritten and discussed ten times, is worth a lot.
One of these little things immediately catches the eye from the cover of the contract: “Dated as of August 15, 2011”. What prevented lawyers from writing the standard: “Dated August 15, 2011”? The fact is that the latter construction is applied only in cases when the contract is concluded on the same day that it is signed. In the case of Google and Motorola, the day the contract is signed is not tied to the day an agreement is reached. For example, Google could sign the contract on August 10, and Motorola - on December 14 or even December 31, 2011. By the way, conspiracy theory - in any official document from Google and Motorola there is no word sign (signed). Press releases speak only about reaching an agreement ...
We leaf through the contract further. New York lawyers wrote a very convenient table of contents with all the article titles and page numbers. With the help of the table of contents it is immediately obvious that my favorite statements and guarantees take up almost half of the contract.
This is a section of the contract in which the parties indicate all facts and circumstances surrounding the transaction that may directly or indirectly affect the future of the agreement. Considering that the subject matter of the contract is the property complex of Motorola Corporation, it is not surprising that the parties approached this section as responsibly as possible.
For reference, understanding of statements and guarantees in the legal Anglo-American consciousness for a long time could not find unity, and only at the end of the twentieth century did American practice develop a unified approach. In particular, the case of Chris v. Henderson ( Krys v. Henderson ), and later the Model Stock Purchase Agreement 1995 and the Model Asset Purchase Agreement 2001 , published by the Business Law Department of the American Association Lawyers give the following definitions:
“A statement is a statement about existing facts in the past and present, guarantees are promises about existing and upcoming facts that are reliable or will be.”
“[Motorola] and all units are properly organized, legally operating in good condition (to the extent that such concepts are established in the relevant jurisdiction) under the Law of the place of incorporation.” Motorola declares and guarantees.
Google claims and guarantees exactly the same thing:
“The legal share capital of the Company [Motorola] consists of 900,000,000 [ordinary] shares and 500,000 preferred shares, each at $ 0, 01”
“There are no lawsuits, claims, lawsuits, complaints, court proceedings, court proceedings, or government or administrative investigations that are expected or, according to [Motorola], threaten or are related to [Motorola] or any of its subsidiaries, except for those processes that, individually or together, do not have or will not have a reasonably expected significant negative impact. ”
By themselves, such statements and guarantees are no more than declarations, but with them a rather serious responsibility is linked.
In case it turns out that the statements and guarantees given by the party are not true, within 30 days the party will have to correct everything, cure the agreement. Otherwise, the contract will be terminated and the guilty party will have to pay compensation.
In particular, if tomorrow it becomes known that Motorola does not launch Atrix 4G in Europe, because Apple, like a maneuver with Samsung, has banned selling the phone in the Old World, Motorola will have to pay Google $ 375,000,000 .
It is curious that all legal correspondence regarding the contract, whether a complaint or a remark can be sent by one party to the other, either by courier, or by fax or electronic mail, if only it were possible to reliably determine whether the message was received. I think that Peter Didenko , who advocates for electronic document circulation, would have approved such a clause in Russian treaties.
As for me, I advise you to take a closer look at the statements and guarantees, and as a warm-up read the wonderful book by Charles Fox “Drafting Contracts” , maybe someday I will tell about this topic in a little more detail ...
Source: https://habr.com/ru/post/127922/
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