Purchase Agreement: Reverse Break-Up Fee and Conditional Specific Performance Provisions (Debt-Financed Transaction) | Practical Law

Purchase Agreement: Reverse Break-Up Fee and Conditional Specific Performance Provisions (Debt-Financed Transaction) | Practical Law

A Standard Clause that may be used in a purchase agreement where a seller wants to include a provision requiring the buyer to pay a reverse break-up fee, but also providing the seller a conditional specific performance right against the buyer. This Standard Clause is drafted to limit the damages payable by the buyer to the amount of the reverse break-up fee if the purchase agreement is terminated, but gives the seller a right of specific performance to require the buyer to close the transaction if debt financing is available. This Standard Clause may also be used in a merger agreement with appropriate adjustments. This Standard Clause has integrated notes with important explanations and drafting and negotiating tips.

Purchase Agreement: Reverse Break-Up Fee and Conditional Specific Performance Provisions (Debt-Financed Transaction)

by Practical Law Corporate & Securities
Maintained • USA (National/Federal)
A Standard Clause that may be used in a purchase agreement where a seller wants to include a provision requiring the buyer to pay a reverse break-up fee, but also providing the seller a conditional specific performance right against the buyer. This Standard Clause is drafted to limit the damages payable by the buyer to the amount of the reverse break-up fee if the purchase agreement is terminated, but gives the seller a right of specific performance to require the buyer to close the transaction if debt financing is available. This Standard Clause may also be used in a merger agreement with appropriate adjustments. This Standard Clause has integrated notes with important explanations and drafting and negotiating tips.