The Backstop Commitments Clause Samples
The Backstop Commitments clause defines the obligation of certain parties, often referred to as backstop parties, to purchase or subscribe for securities or assets that remain unsubscribed or unpurchased after an initial offering or allocation. In practice, this means that if other investors or participants do not take up their full allocation, the backstop parties are required to step in and acquire the remaining amount, ensuring the transaction is fully completed. This clause is commonly used in rights offerings or capital raises to guarantee that the issuer receives the intended amount of capital, thereby providing certainty and reducing the risk of an unsuccessful offering.
The Backstop Commitments. (a) In addition to its obligations under Section 1(a), on the terms and subject to the conditions hereof, each of the Investors, severally and not jointly, agrees to subscribe for and purchase, on the Plan Effective Date, and the Company agrees to put to, sell and issue to such Investor, at the Purchase Price therefor, the (i) Rights Offering Notes and (ii) its Remaining Commitment Percentage of all Unsubscribed Notes as of the Rights Expiration Time, in each case up to the aggregate principal amount set forth opposite such Investor’s name under the column titled “Backstop Commitment Amount” in Exhibit A (the “Backstop Commitments” and, the aggregate amount of Unsubscribed Notes issued to all Investors in accordance with their respective Backstop Commitments pursuant to this Agreement, the “Backstop Notes”); provided, if one or more Investors default in its Backstop Commitment obligations (after having not cured such default within two (2) Business Days after the receipt of a notice from the Company of such default) (such portion of the Unsubscribed Notes which is not subscribed for and purchased by the Defaulting Investor(s) (as defined below), the “Unfulfilled Backstop Commitments”) each of the other Investors, severally and not jointly, agrees to subscribe for and purchase, at an aggregate Purchase Price of up to twenty million dollars ($20,000,000) therefor, its Investor Percentage (as adjusted upwards to eliminate the Investor Percentage of the Defaulting Investor(s)) of the Unfulfilled Backstop Commitments up to an aggregate principal amount of twenty-eight million, eight hundred eighty-eight thousand, eight hundred and eighty-nine dollars ($28,888,889) for all non-Defaulting Investors (for the avoidance of doubt, not up to twenty-eight million, eight hundred eighty-eight thousand, eight hundred and eighty-nine dollars ($28,888,889) per Investor). For the avoidance of doubt, Section 2(j) shall govern the purchase of the Unfulfilled Backstop Commitments in excess of an aggregate principal amount of twenty-eight million, eight hundred eighty-eight thousand, eight hundred and eighty-nine dollars ($28,888,889), (equivalent to an aggregate Purchase Price of up to twenty million dollars ($20,000,000) therefor). An Investor that does not fulfill its obligation to subscribe for and purchase its Investor Percentage of Unfulfilled Backstop Commitments is defined hereunder as a “Defaulting Unfulfilled Commitment Investor.” Promptly upon the expiration of the tw...
The Backstop Commitments. (a) (i) On the terms and subject to the conditions set forth herein (and in any event only upon ▇▇▇▇▇▇▇▇▇’s receipt of the amounts described in Section 1.2(b) hereof), Wolfspeed shall issue to each Rights Offering Backstop Party on the Plan Effective Date, and each Rights Offering Backstop Party agrees to its Backstop Commitment, and shall, severally and not jointly, purchase its Backstop Percentage of the Unsubscribed Notes at the aggregate Purchase Price for such Unsubscribed Notes.
The Backstop Commitments. (a) On the basis of the representations and warranties contained herein, but subject to the satisfaction or waiver of the conditions set forth in Section 10, each of the Commitment Parties, severally and not jointly, agrees to purchase, in accordance with Section 1(g), (A) if such Commitment Party is a Secured Commitment Party, all of its Secured Backstop Commitment Percentage of the Secured Backstop Shares at the aggregate purchase price therefor based upon the Per Share Price and (B) if such Commitment Party is an Unsecured Commitment Party, all of its Unsecured Backstop Commitment Percentage of the Unsecured Backstop Shares at the aggregate purchase price therefor based on the Per Share Price.
(b) On the basis of the representations and warranties herein contained, and subject to the entry by the Bankruptcy Court of an order approving the transactions contemplated by this Agreement (which may be the Confirmation Order) (the “Backstop Commitment Agreement Order”), as consideration for the Backstop Commitments and the other undertakings of the Commitment Parties herein, the Reorganized Company will pay to the Commitment Parties, in the aggregate, and free and clear of any withholding or deduction for any applicable Taxes, on the Plan Effective Date, a nonrefundable premium in an aggregate amount equal to 5.0% of the Rights Offering Amount (the “Backstop Commitment Premium”), which Backstop Commitment Premium shall be deemed fully earned by the Commitment Parties upon the execution of this Agreement, in the form of shares of New Equity (it being understood and agreed that any reference to New Equity issued pursuant to the Backstop Commitment Premium shall be deemed to include any ▇▇▇▇▇ Act Warrants that may be issued in lieu of such New Equity), issued at a price per share equal to $9.65 (subject to downward adjustment if the DIP Exit Backstop Premium is payable; provided that the number of shares of New Equity issuable in respect of the Backstop Commitment Premium shall be correspondingly increased), which shall be allocated among the Commitment Parties pro rata based on each Commitment Party’s Backstop Commitment Percentage; provided that, if the Plan Effective Date does not occur, then, the Backstop Commitment Premium shall, subject to Section 13(g), be payable, in cash, upon any termination hereof pursuant to Section 13. Pursuant to the Backstop Commitment Agreement Order, the Backstop Commitment Premium shall constitute an allowed administrative expen...
The Backstop Commitments. On the basis of the representations and warranties contained herein, but subject to the satisfaction or waiver of the conditions set forth in Section 10, each of the Backstop Parties, severally and not jointly, agrees to purchase, at the Per Share Price, in accordance with Section 1(c), (i) the number of Unsubscribed Shares multiplied by such Backstop Party’s Backstop Commitment Percentage, (ii) the number of Minimum Allocation Shares multiplied by such Backstop Party’s Backstop Commitment Percentage (collectively, such Backstop Party’s “Backstop Commitment”) and (iii) such Backstop Party’s pro rata percentage of the Rights Offering Shares offered to holders of Notes Claims.