Backstop Equity Commitment Letter

Summary

This form Backstop Equity Commitment Letter evidences a private equity investor's commitment to provide equity financing, as credit support for (or a "backstop" to) a private equity sponsor's commitment, to fund an acquisition. Such an arrangement is commonly used in connection with a private equity club deal buyout. This form includes practical guidance, drafting notes, alternate clauses, and optional clauses. This form backstop equity commitment letter assumes the following: • There is a single equity investor funding the equity portion of the investor's transaction consideration. • There is a single equity sponsor funding the equity portion of the sponsor's transaction consideration. • The transaction to which the equity commitment relates is structured as a reverse triangular merger. • Funding for the underlying acquisition also includes debt financing – it is typical for a portion of the purchase price to be funded by debt financing in addition to any equity financing. This form ...