Backstop Facility Agreement

The most common use of a safety net is when subscribing to share issues or initial public offerings (IPOs)Initial Public Offering (IPO)An initial Public Offering (IPO) is the first sale of shares issued to the public by a company. Before an IPO, a company is considered a private company, usually with a small number of investors (founders, friends, family and business investors such as venture capitalists or angel investors). Find out what an IPO is. During an IPO, a company that wishes to raise equity issues its shares to the public. The issues are subscribed by an investment bank or a group of investment banks. A safety net is a financial arrangement that creates a secondary source of funding in the event that the primary source is insufficient to meet current needs. It can also be considered as an insurance policy that covers the insufficiency of a source of funds. The European Council published a report on the monitoring of risk mitigation indicators and announced the Eurogroup`s agreement to continue the reform of the European Stability Mechanism and the entry into force of the common backstop for the Single Resolution Fund by early 2022. Board Vice-Chair Jan Reinder De Carpentier welcomed the Eurogroup`s agreement on the swift introduction of a common backstop for the Single Resolution Fund. The previous commitment was to introduce the joint backstop before the end of 2023. The Eurogroup statement mentions that the common backstop for the Single Resolution Fund will take the form of a credit line from the European Stability Mechanism, which will replace the direct recapitalisation tool and provide a financial safety net for bank resolution in the Banking Union. The private equity firm applies such a strategy with a significant potential loss to itself.

This is important because it is important to use more debt over equity in an LBO strategy. Therefore, a comprehensive fairness safety net typically uses an aggressive position tool in negotiationsdebate tactics negotiation is a dialogue between two or more people with the aim of reaching consensus on one or more issues where conflicts exist. Good negotiation tactics are important so that the negotiating parties know that their side will win or create a win-win situation for both sides. make the transaction more attractive to the target company and increase the stakes for the competition. Such an agreement is provided in exchange for a safety net fee, which is usually charged as a percentage of the total expense. If a company is unable to sell all of its shares to the public, the underwriter will provide a safety net provision. Under the provision, the underwriter purchases the remaining shares that have not been purchased by the public. Unless expressly stated otherwise in this condition sheet, the terms set forth in the Safety Net Facility documents shall be substantially equivalent to those set forth in the Company`s existing $750 million five-year credit facility. (e) Buy entirely for your own account. This Contract is concluded with the Buyer on the basis of the Buyer`s insurance to the Company, which the Buyer hereby confirms by the Buyer`s Performance of this Contract that the securities to be purchased by the Buyer for the investment will be acquired for the investment on the Buyer`s own account, and not as a nominee or agent and not for the purpose of reselling or distributing any part thereof.

and that the buyer does not currently intend to sell, participate in or distribute them illegally. By signing this Agreement, Buyer further represents that Buyer does not currently have any contract, promise, agreement or arrangement with any person to sell, transfer or grant interest to such person or any third party with respect to the Securities. If the purchaser was trained for the specific purpose of acquiring the securities, each of its shareholders is a qualified investor within the meaning of Rule 501(a) of Regulation D, which was enacted under the Securities Act. For the purposes of this Agreement, the term « Person » means an individual, limited liability company, partnership, joint venture, corporation, trust, organization without its own legal personality, another legal entity, or any government or department or agency thereof. A revolving credit facilityA new credit facilityA revolving credit facility is a line of credit agreed between a bank and a business. It comes with a fixed maximum amount, and that can be used as a safety net to address any shortage of funds that may arise in the short term. (c) Entire Agreement. This Agreement, together with all documents, tools and writings provided hereunder or to which reference is made, constitutes the entire agreement and understanding of the parties with respect to the subject matter of this Agreement and supersedes all prior written or oral agreements, understandings or representations by or between the parties to the extent that they relate in any way to the subject matter of this Agreement. or the agreement.

the transactions contemplated herein. CONSIDERING that Buyer expects to enter into (or has entered into) an agreement with any CC PSPC other than the Company (each, an « Other PSPC ») in the form of this Agreement (except with respect to amendments that would not affect the Company`s rights, which, for the avoidance of doubt, would include provisions more favourable to the Other PSPC with respect to the limitation of use or priority of use), the purchaser`s acquisition of common shares of these other PSPC to finance the shareholder buybacks of these other PSPC (each, an « alternative safety net agreement »). If the underwriting organization takes possession of shares, as set out in the agreement, the shares belong to the corporation to be managed at its sole discretion. Shares are treated in the same way as any other investment acquired in the course of normal market activity. The issuing company may not impose any restrictions on the trading of shares. The subscribing organization may hold or sell the related securities in accordance with the regulations that govern the activity as a whole. Imagine a company that wants to raise equity and issue 500 shares. Of the 500, only 400 shares are bought by the public. If the company does not have a safety net agreement, it will have to work with a smaller amount.

The safety net can take different forms in different contexts. Here are three applications that will be covered in detail in the following sections: For example, in the following table, the company faces a $1,000 shortage in year 3. The Company may use the revolving credit facility as a secondary source of financing to borrow $1,000 and meet all financial obligations for the year. Therefore, a revolving credit facility serves as a safety net for the company`s short-term financing needs. (p) no other representations or warranties; Non-trust. Except for the specific representations and warranties contained in this Section 3 and in any certificate or agreement provided hereunder, neither Buyer nor any person acting on Buyer`s behalf, nor any of Buyer`s affiliates (the « Buying Parties ») have made any other representations or warranties, express or implied, with respect to Buyer and the sale and purchase of the Securities; or is considered as such. and the purchasing parties disclaim all representations or warranties. Except for the specific representations and warranties expressly made by the Company in Section 4 of this Agreement and in any certificate or agreement provided under this Agreement, the Purchasing Parties expressly disclaim any other representations or warranties that may be made by the Company, any person acting on behalf of the Company or any of the Company`s affiliates (collectively, « Corporate Parties »). Notwithstanding anything to the contrary in this Agreement, nothing in this Section 3(p) limits any claim or cause of action (or collection in connection therewith) relating to fraud. (a) Limitation of Use.

CONSIDERING that an allocation of buyer`s promised capital of $300,000,000.00 (the « Initial Allocation Amount », the amount of which may be increased in accordance with Article 1(a)) has been made to secure the redemptions of each CC CCPC on a first-come, first-served basis, in accordance with the provisions of this Contract; A private equity safety net, also known as a full safety net, is an agreement by which a private equity firm agrees to buy the target company by contributing up to 100% equity in case it does not raise the debt needed to finance the purchase. .