MAC Clauses and Indemnification Provisions in M&A Deals: Recent Trends in Negotiating and Drafting

Implications of Recent Deal Litigation on the Negotiation of MAC Clauses; Latest Developments in Delaware Statute of Limitations

Recording of a 90-minute CLE webinar with Q&A

Conducted on Wednesday, March 1, 2017
Recorded event now available

This CLE webinar will provide guidance to deal counsel for negotiating and drafting material adverse change (MAC) clauses and the key indemnification provisions in M&A deals based on a recent survey of 278 acquisition agreements publicly filed between June 1, 2015 and May 31, 2016 and recent market trends. Two experienced M&A practitioners who published the survey will lead the discussion.


MAC 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 material adverse changes and risks during the structuring of a deal can result in unintended legal and financial exposure for buyers and sellers. Further, failure to coordinate the MAC clause with the representations and warranties clauses and other key provisions in the acquisition agreement can create a number of problems.

In addition to MAC clauses, this program will address indemnification provisions in a private company M&A transaction, including current trends in survival periods, basket amounts, indemnity caps, sandbagging provisions, and recent developments in the Delaware statute of limitations applicable to M&A deals. Indemnification provisions are often the most important risk allocation provisions in a private company M&A transaction.

Listen as our experienced panel discusses current trends surrounding the use and interpretation of MAC clauses in M&A deals, strategies for negotiating and drafting the clauses, and the negotiation and drafting of indemnification provisions.


  1. Negotiating MAC clauses
    1. Be specific about conditions constituting a MAC
    2. Use broadly written MAC clauses only as “backstop” protection
    3. Watch language construction
    4. Include broad language to cover unknown risks
    5. Buyer should attempt to limit specific MAC exceptions seller proposes
  2. Negotiating indemnification provisions in private company M&A transactions
    1. Materiality scrapes
    2. Survival periods
    3. Baskets, caps, escrow provisions
    4. Consequential damage waivers
    5. Anti-sandbagging clauses
    6. Recent developments in Delaware statute of limitations


The panel will review these and other key issues:

  • How has recent deal litigation impacted the negotiation of MAC 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?


John C. Partigan, Partner
Nixon Peabody, Washington, D.C.

Mr. Partigan concentrates his practice in federal securities law matters and mergers and acquisitions. His mergers and acquisitions practice includes public and privately negotiated acquisitions and divestitures in a variety of industries. His securities practice includes representing issuers in connection with primary and secondary public offerings of debt and equity securities.

Richard F. Langan, Jr., Partner
Nixon Peabody, New York

Mr. Langan has extensive experience in domestic and cross-border corporate transactions, including public and privately negotiated mergers and acquisitions, joint ventures and strategic alliances, capital markets transactions, leveraged buyouts and other private equity transactions, corporate restructurings and corporate governance, including engagement with activist investors. He regularly represents Fortune 500 companies, private equity firms, global banking and financial institutions and multinational corporations. He has written extensively and presents on M&A issues.


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