Common use of Backstop Fee Clause in Contracts

Backstop Fee. (a) Within three (3) days of the approval by the Board of Directors of Alloy of the Spinoff, Alloy shall pay to MLF a non-refundable commitment fee of $50,000 by wire transfer of immediately available funds to the account identified in writing to Alloy. (b) If the Rights Offering is effected, MLF shall be entitled to receive at the Closing a non-refundable fee upon the consummation of the Rights Offering and MLF’s purchase of the Backstop Amount at the Exercise Price of ten-year warrants to purchase, at the Exercise Price, that number of shares of Common Stock that is equal to .08 multiplied by the number of shares of Common Stock issued pursuant to the Rights Offering. Such warrants shall be in substantially the form attached hereto as Exhibit A, with such changes thereto to which Alloy, the Company and MLF may mutually agree, and shall be issued at the Closing or as soon thereafter as reasonably practical.