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Xerox Language Merger Agreement

Since the financial crisis, it has become rare for a purchase agreement to override the buyer`s obligation to enter into debt financing. As a result, the buyer takes a significant risk in case of financing failure. However, it would be too simplified to say that the buyer is the only party who bears this risk. Buyers are often successful in negotiating risk-sharing with the seller, para. B example by limiting certain performance aids and/or damages for a loss of funding (through reverse termination fees or otherwise). Since the seller may be seriously harmed by the failure of a negotiated and publicly announced transaction, it is customary to ask the buyer to give certain assurances to the seller in the purchase contract regarding its financing obligation. For more information about reverse termination fees and specific performance rights, see Negotiating reverse termination fees and provisions for limited specific performance rights and termination fees. Linda L. Curtis and Andrew Cheng are partners in the Global Finance practice group at Gibson, Dunn & Crutcher LLP, Los Angeles. Linda Curtis` practice focuses on all aspects of corporate finance, with a particular focus in recent years on acquisition financing. Andrew Cheng focuses primarily on representing borrowers, private equity sponsors and lenders in acquisition financing and other leveraged financing transactions, including syndicated senior secured loan agreements and Rule 144A high-yield offers.

With private equity buyers, “in this world, you don`t usually have a financing condition for the deal to make the sellers comfortable,” Brant said, meaning the closing of the deal doesn`t depend on the buyer`s ability to get financing. Typically, a debt financing letter expires a few days after the expiration date of a merger agreement. The buyer`s representations regarding its financing commitment in a purchase agreement generally include: IN RECENT YEARS, the negotiation of an ACQUISITION AGREEMENT and the associated acquisition financing obligation have become increasingly complicated, involving several parties. Of course, the buyer is always closely involved in both negotiations, one of its main objectives being to make the conditionality of its financing commitments as consistent as possible with the conditionality of the purchase contract. Increasingly, however, the seller will review (and comment) on the buyer`s financing commitment documents, and conversely, lenders will review (and comment) on the purchase agreement. All of this usually happens quickly and in real time, especially in multi-bid transactions for a target company. With any leveraged acquisition financing, lenders rely on the business to be acquired at least partially (in a strategic acquisition) and perhaps even entirely (in a private equity acquisition) to provide the source of funds for repayment. Accordingly, the seller`s obligation to the buyer in the purchase contract to cooperate with the buyer to obtain its financing is crucial.

In recent years, this alliance has become longer and more detailed. A typical interpretation of the agreement involves seller`s obligation to cooperate appropriately with buyer to obtain its financing, including reasonable or reasonable efforts, and to persuade its agents and consultants to do so: After Forescout has filed a lawsuit in Delaware to enforce the merger agreement and has requested either an TRO, Either a quick process before a termination date in June, the parties have agreed to extend the termination date of the agreement until August 6 in order to allow time for due process in Delaware on the dispute. .


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