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Product ID: 408413EAU
 
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Navigating Paycheck Protection Program Loans in M&A Deals

OnDemand Webinar (63 minutes)

Understand key transaction structure and timing considerations associated with an M&A transaction when there has been an accepted PPP loan.Since a large number of companies have applied for and received Paycheck Protection Program (PPP) loans during the COVID-19 crisis, many M&A transactions undertaken in 2021 will involve a target with an outstanding or recently forgiven PPP loan. A PPP loan raises a number of issues for consideration in an M&A transaction, ranging from transaction structure and timing considerations to specific topics for due diligence, new purchase price points to be negotiated, and the impact of key provisions of the purchase agreement. This material will provide M&A participants with background on the PPP program, an understanding of the key timing, consent, and transaction structure considerations raised by PPP loans, and the knowledge to issue spot and negotiate new purchase agreement points.

Authors

David C. Jenson, Stinson LLP Jonathan B. Vessey, Stinson LLP Gerald D. Weidner, Stinson LLP

Agenda

Background on the Paycheck Protection Program

• Loan Terms and the Necessity Certification

• Eligibility and Implementation Issues

• The Loan Forgiveness Process

Consent and Overall Transaction Considerations

• Lender Approval vs. SBA Approval

• Transaction Timing Consideration

• Other Transaction Considerations

Due Diligence Considerations

• PPP Compliance

• Affiliation Issues

Purchase Agreement Considerations

• Representations and Warranties

• Covenants

• Purchase Price Adjustments

• Earnout Provisions

• Indemnification

• Rep and Warranty Insurance Provisions