The Backstop Clause Samples
The Backstop clause serves as a contractual safety net that ensures obligations are fulfilled if the primary party fails to perform. In practice, this clause typically designates a third party—such as a guarantor or financial institution—to step in and meet the contractual commitments if the original obligor defaults. For example, in a financing agreement, a backstop might guarantee that funds will be provided even if the main investor withdraws. Its core function is to provide assurance and mitigate risk for the parties involved by guaranteeing performance or payment, thereby enhancing the reliability of the agreement.
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The Backstop. The Rights Offering will be backstopped by the Backstop Commitment Parties. Each of the Backstop Commitment Parties, severally2 and not jointly, has agreed, pursuant to the Backstop Agreement, to purchase all New Second Lien Convertible Notes that are not purchased by other Eligible Offerees pursuant to the Rights Offering (the “Unsubscribed Notes”), on a pro rata basis, in accordance with the percentages set forth in Exhibit A to the Backstop Agreement.3 To compensate the Backstop Commitment Parties for the risk of their undertakings in the Backstop Agreement and as consideration for their backstop commitments, the Debtors will pay to such Backstop Commitment Parties the Put Option Premium (as defined in the Backstop Agreement) pursuant to the terms and conditions in the Backstop Agreement. There will be no over-subscription privilege in the Rights Offering. The Unsubscribed Notes will not be offered to other Eligible Offerees but will instead be purchased by the Backstop Commitment Parties in accordance with the Backstop Agreement. Notwithstanding anything herein to the contrary, the rights and obligations of the Backstop Commitment Parties in the Rights Offering shall be governed by the Backstop Agreement.
The Backstop. The Company desires that the Investor provide a Backstop Commitment (as defined herein) in connection with the Public Offering of Common Stock as described herein, and desires to provide to Investor (i) a Backstop Option to purchase Preferred Stock, par value $1.00 per share, of the Company (the “Preferred Stock”) and (ii) additional B-Warrants exercisable for certain consideration set forth therein (the “B2-Warrant,” or “B2-Warrants”, and together with the Warrant and the B-Warrant, the “Warrants”) exercisable for certain consideration set forth therein.
The Backstop. The Rights Offering will be backstopped by the Commitment Parties pursuant to the Backstop Commitment Agreement. The Commitment Parties will be provided with a special form (the “Backstop Addendum”) to attach to their Rights Exercise Form(s). Any unsubscribed securities will not be offered to other Eligible Offerees but will be purchased by the Commitment Parties in accordance with the Backstop Commitment Agreement.
The Backstop. Tranche A Lenders shall irrevocably accept or reject the Purchase Offer within ten (10) days of the termination of the RSA by written notice to the Backstop Tranche B Lenders, and the parties shall endeavor to close promptly thereafter, but in no event later than five (5) Business Days after the date of such notice. If the Backstop Tranche A Lenders accept the Purchase Offer, it shall be exercised, subject to the provisions of Section 9.19(a) above, pursuant to documentation mutually acceptable to the Backstop Tranche A Lenders and the Backstop Tranche B Lenders. If the Backstop Tranche A Lenders reject the Purchase Offer (or do not so irrevocably accept the Purchase Offer within the required timeframe), the Backstop Tranche B Lenders shall have no further obligations pursuant to this Section 9.19.
The Backstop. The Rights Offering will be backstopped by the Commitment Parties pursuant to the Backstop Commitment Agreement. The Commitment Parties will be provided with a special form (the “Backstop Addendum”) to attach to their Rights Exercise Form(s). AnyIf the aggregate proceeds of the Rights Offering are less than $465,000,000, the unsubscribed securities will not be offered to other Eligible Offerees but will be purchased by the Commitment Parties in accordance with the Backstop Commitment Agreement.