A breakup fee is a financial penalty imposed on a party, often used in mergers and acquisitions, to compensate the other party if the deal is terminated under certain circumstances. This clause is intended to protect the interests of the party impacted by a failed agreement, covering costs and potential losses incurred during the negotiation process.
13.4 Breakup Fee. (a) In the event of the termination of this Agreement by Parent or Purchaser pursuant to Section 13.2(a) or as a result of the Company’s refusal to consummate the transactions contemplated hereby which refusal is not permitted by Section 13.1 or 13.2, a breakup fee of $500,000 shall be paid, within three Business Days following termination, by the Company to Parent.
(b) In the event of the termination of this Agreement by the Company pursuant to Section 13.2(b) or as a result of Parent’s refusal to consummate the transactions contemplated hereby which refusal is not permitted by Section 13.1 or 13.2, a breakup fee of $500,000 shall be paid, within three Business Days following termination, by Parent to the Company.
(c) In the event that the transaction contemplated by this Agreement is not consummated by the Outside Closing Date, as extended by Parent or Purchaser pursuant to Section 13.1(a), for any reason, a breakup fee of $1,500,000 shall be paid within three Business Days following the Outside Closing Date, by Parent to the Company.
In no event shall the Company be required to pay the Breakup Fee to Parent on more than one occasion, and in no event shall Parent be required to pay the Parent Regulatory Fee to the Company on more than one occasion. Any payment of the Expense Reimbursement shall reduce, on a dollar-for-dollar basis, any Breakup Fee that becomes due and payable under Section 7.2(c). All payments to Parent under this Section 7.2 will be made by wire transfer of immediately available funds to the account designated by Parent on Section 7.2(e) of the Parent Disclosure Schedule.
Each of the Company, Parent and Merger Sub acknowledges that (i) the agreements contained in this Section 7.2 are an integral part of the transactions contemplated by this Agreement, (ii) without these agreements, Parent, Merger Sub and the Company would not enter into this Agreement, and (iii) the Breakup Fee is not a penalty, but rather is liquidated damages in a reasonable amount that will compensate Parent and Merger Sub in the circumstances in which such Breakup Fee is payable and (iv) the Parent Regulatory Fee is not a penalty, but rather is liquidated damages in a reasonable amount that will compensate the Company in the circumstances in which the Parent Regulatory Fee is payable.
The warrant will vest upon the closing of a transaction involving Landmark or upon the invocation of a “Breakup Fee”.
The Breakup Fee will be invoked upon the generation of a specific transaction to ABMC which meets certain criteria agreed upon by both the Company and Landmark; which transaction is then rejected by the Company. The Company will also pay to Landmark a “Success Fee” for the consummation of a transaction closing during the term of the Agreement and for 12 months thereafter, between the Company and any party first introduced to the Company by Landmark, or with any party the Company has specifically requested Landmark’s assistance with the transaction.
Upon invocation of the Breakup Fee or payment of the Success Fee, the Company will also issue an additional 250,000 restricted shares of the Company’s common stock.
The Parties agree that the time and effort required to negotiate this Term Sheet and the JV Agreement in good faith involves expenses incurred by each Party that would be impossible or very difficult to accurately estimate. Therefore, in the event of termination of this agreement by either JV Party by written notice (which termination may be made at any time and for any reason), a breakup fee of $5,000 (“Breakup Fee”) shall be paid within 3 business days by the terminating Party to the non-terminating Party. This Breakup Fee has been established for the convenience of the Parties so that the Parties have certainty with respect to damages arising from either Party’s termination of the transactions contemplated hereby.
In the event any of the above stated four conditions are not met, Organicell must return the $300,000 funded pursuant to this Binding LOI within 30 days from the effective date herein, and, immediately provide Investors with an additional One Hundred Million shares, along with the One Hundred Million shares earned with the $300,000 funding of July 15, 2002, as a Breakup Fee for its’ failure to Close on the full transaction as contemplated within this Binding LOI.
The Parties have agreed to cooperate and exercise their respective commercially reasonable best efforts in good faith, to draft and execute the Definitive Agreements consistent with the terms of this LOI as promptly as reasonably practicable, but in no event, later than August 30, 2022, otherwise, the Breakup Fee, as set forth in paragraph 4e, above, shall go into effect and the refund and issuance of stock shall, pursuant to said Breakup Fee shall be due on August 31, 2022, unless an extension, in writing, is agreed to by all Parties hereto.
Each Party to the LOI contemplated hereby shall bear its own legal, accounting and other fees and expenses incurred in connection with the LOI, whether or not the Definitive Agreements are executed, other than the Breakup Fee as stated and described, above.
(a) Notwithstanding anything to the contrary set forth in this Agreement: in the event this Agreement has been terminated by the Company pursuant to Section 7.03(d) due to (i) Parent’s failure to perform its obligations pursuant to Section 5.03(c) or Section 5.10, (ii) Parent’s breach of the terms and conditions of Section 7.06(c) if such breach is not cured within five business days of written notice from the Company of such breach, provided that, prior to termination by the Company, the Parties have obtained approval from the Department of Justice under the HSR Act to consummate such transactions (which approval may be an express approval, early termination or expiration of the applicable waiting period following substantial compliance with any second request, or the occurrence of any events or the satisfaction of any conditions which permit the Parties to consummate the transactions contemplated by this Agreement without violating the HSR Act or any injunction or order of any court of competent jurisdiction) or (iii) Parent’s failure to consummate the transactions contemplated by this Agreement in a commercially reasonable period of time after the Parties have obtained approval from the Department of Justice under the HSR Act to consummate such transactions (which approval may be an express approval, early termination or expiration of the applicable waiting period following substantial compliance with any second request, or the occurrence of any events or the satisfaction of any conditions which permit the Parties to consummate the transactions contemplated by this Agreement without violating the HSR Act or any injunction or order of any court of competent jurisdiction), Parent shall pay to Company a cash breakup fee of US$50.0 million (the “Breakup Fee”); provided that the Parent shall have no obligation to pay the Breakup Fee in the event any Governmental Authority obtains an injunction from a court of competent jurisdiction enjoining the Closing in connection with any review under the HSR Act or the Parties agree to terminate this Agreement in settlement of any claim by any Governmental Authority arising under any review under the HSR Act; and (b) in the event that the Breakup Fee becomes payable, then payment to the Company of the Breakup Fee shall be the Company’s sole and exclusive remedy as liquidated damages for any and all losses or damages of any nature against Parent and Merger Sub and each of the Parent Parties in respect of this Agreement, any agreement executed in connection herewith, and the transactions contemplated hereby and thereby, including for any loss or damage suffered as a result of the termination of this Agreement, the failure of the Merger to be consummated or for a breach or failure to perform hereunder (whether intentionally, unintentionally, or otherwise) or otherwise, and upon payment of such Breakup Fee no Parent Party shall have any further liability or obligation relating to or arising out of this Agreement or the transactions contemplated hereby and thereby. Parent acknowledges and agrees that the Company shall have the right and option, but not the obligation, in its sole discretion to pay with a portion of the Breakup Fee by offsetting certain indebtedness of the Company owed to Parent (or to accept, in lieu of a portion of the Breakup Fee, cancellation of indebtedness of the Company owed to Parent), which indebtedness shall be paid and payment applied as follows: (i) first to the indebtedness referenced in the second parenthetical of the first paragraph of Section 5.03(a), (ii) second to the Promissory Note and (iii) third, in the Company’s sole discretion among the outstanding Liquidity Note and the CapEx Note.
Resolute has deposited $150,000.00 in escrow (“Breakup Fee”). If the transaction closes as scheduled, the Breakup Fee will be returned to Resolute. If the transaction does not close for any reason other than those set forth in the Purchase Agreement, the Breakup Fee will be forfeited to the Company.
“(a) Parent Breakup Fee. In the event of the termination of this Agreement by Parent pursuant to Section 11.1(b) or as a result of the Company’s refusal to consummate the transactions contemplated hereby, the Company shall pay Parent a breakup fee equal to Four Million Dollars ($4,000,000) in cash within three Business Days following such termination. For the avoidance of doubt, the Company shall not be liable to any Parent Breakup Fee if the termination of this Agreement is primarily the result of regulatory oversight or scrutiny not caused by the Company’s lack of cooperation or non-compliance with the terms of this Agreement.
(b) Company Breakup Fee. In the event of the termination of this Agreement by the Company pursuant to Section 11.1(c) or as a result of Parent’s refusal to consummate the transactions contemplated hereby other than as permitted by this Agreement, Parent shall pay the Company a breakup fee of Five Million Dollars ($5,000,000), within three Business Days following such termination.”
Breakup Fee In the event that Arisz terminates the Merger Agreement (i) due to the Company’s breach of its warranties and representations or its failure to perform its covenants, (ii) due to the Company’s failure to deliver its audited financial statements for 2020 and 2021 on or before April 15, 2022 or (iii) or as a result of the Company’s refusal to consummate the transactions contemplated thereby, the Company shall pay Parent a breakup fee equal to $3,000,000 in cash within three business days following such termination; provided, however, that the Company shall not be obligated to pay a breakup fee if Arisz terminates the Merger Agreement primarily due to regulatory oversight or scrutiny not caused by the Company’s lack of cooperation or non-compliance with the terms of the Merger Agreement.
In the event that the Company terminates the Merger Agreement (a) due to Arisz’s breach of its warranties and representations or its failure to perform its covenants or (b) or as a result of the Company’s refusal to consummate the transactions contemplated thereby, Arisz shall pay the Company a breakup fee of 450,000 shares of Arisz common stock (having a deemed value of $4,500,000), within three business days following such termination.
(b) In the event that this Agreement is terminated pursuant to Section 5.01(a)(v) or Section 5.01(b)(iii), then the Company shall pay to Buyer immediately prior to such termination, (i) a termination fee of JPY 866,800,000 (the “Breakup Fee”). Payment of the Breakup Fee shall be made by wire transfer of immediately available funds to an account designated in writing by Buyer.
•An agreement that Ceragon would be permitted to terminate the transaction for a superior proposal, subject to a customary non-solicitation covenant, matching rights and the payment of a market sized breakup fee.
A breakup fee, also known as a termination fee, is a predefined amount of money that one party agrees to pay to another if a deal or agreement is terminated under specific conditions. These agreements are commonly found in corporate mergers and acquisitions (M&A). The primary purpose of a breakup fee is to compensate the non-breaching party for the time, effort, and financial resources they invested into negotiating and planning the transaction.
A breakup fee should be considered in situations where:
When drafting a breakup fee clause, consider the following steps:
Example:
Breakup Fee Clause: In the event that the Seller accepts an alternative proposal or fails to complete the transaction due to reasons within its control, the Seller shall pay a breakup fee of 3% of the total transaction value to the Buyer within 30 days of termination of this agreement.
Breakup fees are commonly found in:
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