What is a fall away provision?

Covenant Fall-Away / Suspension: A provision whereby certain restrictive covenants will be permanently inapplicable (fall-away) if the notes are rated investment grade or temporarily suspended (suspension) while the notes are rated investment grade.

What is a standstill provision in a confidentiality agreement?

A standstill provision is generally only included in an NDA when the seller is a public company. These provisions are meant to protect the public company seller against a hostile buyer following failed negotiations.

What is a standstill clause in NDA?

Related Content. An agreement in which a hostile bidder agrees to limit its holdings in a target company. A standstill agreement stops the takeover bid from progressing for a period of time.

What is a don t ask don t waive clause?

A “don’t ask, don’t waive” provision in a standstill prohibits a potential acquirer from making any public or private request that a target waive the standstill restrictions.

What do you need to know about a standstill agreement?

Deal professionals love jargon, and this area has plenty of it: A potential acquirer that is bound by a “standstill” is typically obligated to refrain from various actions that relate to acquisition of control of the target, such as making proposals to acquire the target, buying shares, and launching a proxy contest.

Why is a standstill agreement important in a hostile takeover?

A standstill agreement can effectively stall or stop the process of a hostile takeover if the parties cannot negotiate a friendly deal. The agreement is particularly important because the bidder will have had access to the target company’s confidential financial information.

What happens when an acquirer is bound by a standstill?

A potential acquirer that is bound by a “standstill” is typically obligated to refrain from various actions that relate to acquisition of control of the target, such as making proposals to acquire the target, buying shares, and launching a proxy contest.

What happens during the standstill period of a loan?

A new deal is negotiated during the standstill period that usually alters the loan’s original repayment schedule. This is used as an alternative to bankruptcy or foreclosure when the borrower can’t repay the loan.