Google’s $12.5 billion offer for Motorola Mobility was taken one step further with Motorola Mobility agreeing not to solicit other offers. Motorola Mobility has signed the terms of a merger agreement published today, which states that all employees and directors of the company as well as outside advisers and legal counsel have to stop any solicitation of other proposals as of Aug. 15. Despite this, the agreement states Motorola’s board has a fiduciary duty to consider any unsolicited superior proposal it may receive. The contract goes on to say that Google will pay Motorola Mobility $2.5 billion if the deal falls through, and Motorola Mobility will pay $375 million if it decides not to sell to Google.

Google and Motorola have both stressed that the deal was approved unanimously by both companies’ boards of directors. However, not everyone is jumping for joy over the deal. Motorola Mobility and CEO Sanjay Jha were sued this week by shareholder John W. Keating.

“The offered consideration does not compensate shareholders for the company’s intrinsic value and stand-alone alternatives going forward, nor does it compensate shareholders for the company’s value as a strategic asset for Google,” Keating wrote in his complaint, filed in Cook County, Illinois Circuit Court. Keating is seeking class-action status and wants the deal to be rejected by regulatory authorities.

Google has insisted there won’t be a Moogle or Googorola, as Motorola will remain a separate company. They’ve also stated that Android will remain open, and Motorola won’t become the only Android dealer. Despite their assurances, there’s no doubt Android partners like Samsung and HTC are feeling nervous about the deal.

With the deal, Google gains not only a foot in the hardware business, but also Motorola’s vast patent portfolio. With more patents under their belt, Google hopes to strengthen the Android brand over rivals like Apple who are embroiled in patent-related lawsuits. Google stated it will, “enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.” As for whether Keating will have any effect on the deal, that’s for the courts to decide. We’ll keep you posted.

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