About the Course
Introduction
This CLE course will guide deal counsel in negotiating and drafting material adverse change (MAC) or material adverse effect (MAE) clauses and the key indemnification provisions in M&A deals. The panel discussion will include industry trends in deal negotiation and the continuing impact of the Akorn decision and other more recent cases.
Description
MAE clauses, which permit the cancellation of a deal under certain circumstances, are intensely negotiated and frequently litigated provisions in M&A transactions. Questions about what constitutes a MAC have been at the center of several disputed deals.
Counsel's failure to anticipate and address potential MAEs and risks during the structuring of a deal can result in unintended legal and financial exposure for buyers and sellers. Further, the failure to coordinate the MAC clause with the representations and warranties clauses and other essential provisions in the acquisition agreement can create several problems.
In addition to MAE clauses, this program will address indemnification provisions in a private company M&A transaction, including current trends in survival periods, basket amounts, indemnity caps, and sandbagging provisions. Indemnification provisions are often the most critical risk allocation provisions in a private company M&A transaction.
Listen as our authoritative panel discusses current trends surrounding the use and interpretation of MAE clauses in M&A deals, strategies for negotiating and drafting the terms, and negotiating and drafting indemnification provisions.
Presented By
Mr. Clingen serves as general counsel to several family owned and privately owned business entities in a variety of industries, including manufacturing, distribution, technology, financial services and professional services. He uses his audit and accounting background to counsel clients in forging solutions that properly balance legal and business concerns.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Wednesday, February 11, 2026
- schedule
1:00 p.m. ET./10:00 a.m. PT
I. MAE clauses
A. Overview of the concept of a "material adverse effect"
B. Provisions where the concept appears
C. The MAE definition
D. Misunderstandings, mistakes, and pitfalls
E. MAEs in contractual provisions reconsidered
II. Negotiating indemnification provisions in private company M&A transactions
A. "Sandbagging"
B. Survival periods
C. Scope of indemnifiable damages
D. Indemnification deductibles ("baskets")
E. Materiality scrapes
F. Indemnification caps
G. Third-party indemnification claims
H. Indemnification as exclusive remedy
I. Indemnification escrows
J. Reductions against buyer's indemnification claims
K. Representations and warranties insurance
The panel will review these and other key issues:
- How has recent deal litigation impacted the negotiation of MAE clauses?
- How can counsel for buyers and sellers best mitigate risk when drafting and negotiating MAC clauses?
- What are the current trends to consider when drafting and negotiating indemnification provisions?
- How has representation and warranty insurance affected indemnification provisions?
