By February 2009 it was announced that employees' bonuses would be reduced by 90%, relying on a material adverse change clause
which had been introduced following the announcement of the bonus pool.
In practice, the ability of banks to suspend new loans when the borrower's financial condition is deteriorating by virtue of a material adverse change clause
can be important.
It will rank on par with Walt Disney's existing debt, be subject to an interest coverage test of 3x and contain no ongoing material adverse change clause
, the agency noted.
Grech, Comment, "Opting Out": Defining the Material Adverse Change Clause
in a Volatile Economy, 52 EMORY L.J.
The code requires carriers to include a material adverse change clause
, which states that carriers cannot modify the terms of a user agreement, especially if the terms are not in the customer's favor, without providing advance notice and at least 14 days for customers to cancel their contracts without incurring a fee.
One issue thought to be a stumbling block was a so-called "material adverse change clause
" which could enable Permira to pull out if there was a deterioration in Debenhams' trading position.
The material adverse change clause
turned out to be the most difficult negotiation in our banking relationships.
The right to tap a line of credit in the wake of a disaster involves amendments to the material adverse change clause
normally found in credit agreements.
One example is the inclusion of material adverse change clauses
in 93% of US deals compared to 13% of European deals.
We will commit, close and rate lock transactions, and there are no material adverse change clauses
in loan applications and commitments." In the last few months, NCB has closed a number of commercial real estate loans using our portfolio loan product, including: Applewood Grove Shopping Center, Golden, Colorado ($3,200,000); GreenwichDesbrosses Realty, New York, New York ($1,000,000); Abbey Square Apartments, Richmond, Virginia ($1,925,000); Varina Station, Fuquay-Varina, Northa Carolina ($2,175,000).
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.
But it also said Marconi had not received any correspondence from banks suggesting it had triggered material adverse change clauses
that could threaten its vital credit facilities.