"There shall not have occurred in the judgment of the global co-ordinators any crisis or calamity or material adverse change
(MAC) or material adverse development in Germany, the UK, U.S., France, Germany, Italy, Spain, Ireland or Portugal", the clause states, according to people with access to the document.
material adverse change
conditions; (c) covenants; and (d) exogenous
(1.) Although some commentators have argued for a distinction between "material adverse effect" and "material adverse change
," see, e.g., Kenneth A.
The BofA board met the next day to discuss the merger, and the minutes revealed: "The Treasury and Fed state strongly that were the Corporation [Bank of America] to invoke the material adverse change
("MAC") clause in the merger agreement with Merrill Lynch and fail to close the transaction, the Treasury and Fed would remove the Board and Management of the Corporation."
If a material adverse change
occurs, the purchaser has the right to lower the offer or, in some cases, walk away from the transaction.
'Assuming no material adverse change
in economic conditions, we look to the future increasingly confident of our ability to deliver sustainable growth.'
Faced with these conditions, parties attempting to escape from a deal will often point to adverse economic and market conditions or a major change in business fortunes of the target as grounds for invoking "material adverse change
" (MAC) or "material adverse effect" (MAE) clauses to terminate an otherwise binding merger agreement.
Such hazards include the tendency to hedge exposures with different counterparties while underwriting one's own risk on the basis of the net exposure (assuming performance by both the initial derivative and the hedged derivative), and the existence of credit cliffs inherent in downgrade triggers or material adverse change
clauses that may invoke termination rights on the part of performing derivative counterparties, but not on the part of the party that suffered the downgrade or material adverse change
Further considerations will be made towards providing consistency of duties and responsibilities of monitors and trustees to integrate similar requirements under CCAA and BIA, (for example, preparation of cash flow statements, material adverse change
In a 146-page decision, Strine said a decline in IBP's earnings didn't amount to a "material adverse change
," known as a MAC -- a clause that could have allowed Tyson to cancel the deal.
The material adverse change
clause turned out to be the most difficult negotiation in our banking relationships.
Banks often protect themselves against this latter event, however, by including in loan commitments "material adverse change
" clauses that allow them to void a commitment if a borrower's credit condition deteriorates beyond limits specified in the commitment contract.