Reverse Break-up Fee and Termination Clause

Summary

This is a termination clause with a reverse break-up fee provision. A reverse breakup fee is a fee that the potential purchaser may have to pay to the potential seller in the event that the transaction does not close. Reverse breakup fees are used to give the seller security that the buyer will be motivated to complete the transaction and to compensate the seller for engaging in the transaction process if the transaction fails to close fees are used. This template includes practical guidance and drafting notes. For a full listing of related antitrust clause content, see Antitrust Clauses in M&A Agreements Resource Kit​. For more information on reverse breakup fees, see the practice note Transaction Agreements: Antitrust Issues.