Bulletproof deals are coming back, baby!

SB 313, including new § 122(18) is advancing on the floor of the Delaware Senate today. First, things first. This bill is a bad idea. It shouldn't pass. That said, think of all the opportunities once it becomes legal for boards to contract away their § 141(a) obligations to a prospective stockholder. Bulletproof deals are coming back! 

Behold the Lock-up Agreement with a Prospective Stockholder!

• This agreement should be signed coincident with a merger agreement between the corporation and the prospective stockholder;
• Consideration to be paid by the prospective stockholder to the corporation on the closing of the merger (hehe. it will never get paid. genius!);
• Notwithstanding the language of the merger agreement, the board covenants not to recommend any other deal to its stockholders;
• Notwithstanding the language of the merger agreement, the board covenants not to exercise any termination rights it might have under the merger agreement without the express consent of the prospective stockholder;
• Any disputes with respect to this lock-up agreement would be subject to confidential arbitration in New York (or Texas) under New York (or Texas) law.
• The terms of this agreement as well as the existence of this agreement will remain confidential between the corporation and the prospective stockholder (obvi).

-bjmq