May 16, 2019 - The Canadian Securities Administrators (CSA) recently published a notice and request for comment that proposes amendments (Proposed Amendments) to Part 9 of National Instrument 44-102 Shelf Distributions (NI 44-102). The Proposed Amendments, when adopted, will provide a new regime for...
Material Adverse Changes: Decoding a Legal Enigma
When negotiating a financing commitment, a prospective borrower is often asked to agree that the lender may refuse to advance funds or may terminate the credit facility if there is a “material adverse change” or if an event occurs that has had or may have a “material adverse effect”.
Borrowers tend to view this limitation, commonly referred to as a MAC clause, as reflecting a lack of confidence on the part of the lender in the borrower’s business or managerial abilities, or an unwillingness by the leader to commit. Lenders tend to view the inclusion of MAC clauses as a necessary protection, functioning as a failsafe to protect them against gaps in diligence and unforeseen events.
This article discusses the impact and utility of MAC clauses, from the perspective of both the borrower and the lender.
Feb. 22, 2019 - Bill C-86 introduces significant changes to the Canada Business Corporations Act (CBCA) that will come into effect on June 13, 2019. Corporations governed by the CBCA (excluding corporations that are reporting issuers or are listed on a “designated stock exchange” as defined in the...