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M&A disputes (continued)

• Material adverse change (MAC)

– Clauses incorporated to provide a mechanism to terminate a merger or
an acquisitions agreement prior to closing in the event that a material

change occurs that damages the target’s business operations or
assets. It is generally a representation by the seller that since the date
the agreement was signed, there has been no MAC in the business.

• Representations and warranties

– Section of an agreement designed to provide transaction protection to
both the buyer and the seller. Representations are statements of past
or existing facts. Warranties are promises that existing or future facts
are or will be true. The representations and warranties made by the
seller are typically among the most lengthy and negotiated elements of

an acquisition agreement.

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