Financing-Related Provisions in Acquisition Agreements

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Thursday, August 12, 2021

Recorded event now available

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Course Materials

This CLE course will instruct lending counsel on critical acquisition agreement provisions to protect lenders, sellers, and buyers.

Description

In the aftermath of the credit crisis and legal disputes surrounding failed deals during that period, transaction parties focus more intensely on the financing-related provisions in acquisition agreements. Lenders seek to shield themselves from litigation through so-called Xerox provisions, sellers seek contractual assurances that the transaction would not abort due to a failed financing, and buyers have sought to ensure that they get cooperation from the seller that covers the conditionality in their financing commitments.

Xerox provisions have evolved over the past decade to include limited recourse against the lender, lender approval of deal amendments, third-party beneficiary provisions, termination fees, and other deal points in purchase agreements that impact the lender. Meanwhile, the seller's and buyer's obligations to each other regarding the financing converge on a relatively standardized set of representations and covenants.

Listen as our authoritative panel of finance attorneys provides their perspectives on balancing the sometimes competing interests among buyers, targets, and lenders in the acquisition process. The presenters will review the protections that lenders require in acquisition financings--such as Xerox provisions--and then present a broader overview of the financing-related provisions in acquisition agreements, addressing the interests of buyers and sellers.

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Outline

  1. Origins of modern financing risk-allocation provisions: financing disputes during the credit crisis
  2. Overview of financing-related provisions in acquisition agreements
  3. Lender-protective provisions: Xerox provisions
  4. Seller-protective provisions: Buyer financing representation and financing covenant
  5. Buyer-protective provisions: Seller financing cooperation covenant

Benefits

The panel will review these and other key issues:

  • What are the crucial points of Xerox provisions?
  • What do Xerox provisions mean for buyers, sellers, and financing sources?
  • What provisions in the acquisition agreement should the seller focus on to confirm the solidity of a proposed acquisition financing?
  • What provisions in the acquisition agreement should the buyer focus on to ensure the cooperation of the seller with obtaining the acquisition financing?

Faculty

Brower, Tom
Tom Brower
Attorney (Not admitted to practice in Calif., admitted to practice only in N.Y.)
Gibson, Dunn & Crutcher

Mr. Brower's practice focuses on advising corporate borrowers, private equity sponsors and their portfolio...  |  Read More

Galil, Yair Y.
Yair Y. Galil
Of Counsel
Gibson, Dunn & Crutcher

Mr. Galil is a member of the Firm's Global Finance Practice Group. He represents a variety of clients,...  |  Read More

Mehraban, Darius
Darius J. Mehraban
Partner
Gibson, Dunn & Crutcher

As a member of the firm's Global Finance Group, Mr. Mehraban focuses on loan and debt financing transactions,...  |  Read More

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