The U.S. Bankruptcy Court issued an order approving UCI Holdings’ motion to authorize and approve its (a) entry into a backstop commitment agreement and (b) payment of the backstop fees and expenses.
As previously reported, “To further effectuate the Plan, pursuant to the Backstop Commitment Agreement, the Backstop Parties, which hold a substantial amount of the Debtors’ Senior Unsecured Notes, have committed to backstop (the ‘Backstop Commitment’) the Rights Offering….The Rights Offering provides Eligible Parties the right to purchase their pro rata share of (i) $30 million of second lien secured debt in the Reorganized Debtors through the Second Lien Rights Offering Facility, and (ii) 15% of the New Common Stock. The following summarizes the key terms of the Backstop Commitment Agreement: Subject to and in accordance with the terms and conditions set forth in the Backstop Commitment Agreement, each Backstop Party hereby commits, on behalf of itself and no other Backstop Party, to purchase its Backstop Commitment by (i) electing to purchase its Notes Pro Rata Allocation of the Second Lien Rights Offering and causing its Subscription Payment Amount to be delivered to the Subscription Agent prior to the Election Expiration Time, and (ii) paying to the Company, on the Effective Date, the dollar amount of its Backstop Party Pro Rata Share of the Second Lien Rights Offering Facility not subscribed for in the Rights Offering as calculated pursuant to Section 2.1.”
Court-filed documents continue, “The Backstop Fee, with respect to each Backstop Party, shall be fully vested, non-refundable and non-avoidable upon entry of the Approval Order and shall be payable upon the earlier of (a) the Effective Date, or (b) termination of this Agreement in accordance with Section 7 of the Backstop Commitment Agreement (in which case the Backstop Fee shall be payable in cash, in an amount equal to $3 million), provided, that no portion of the Backstop Fee shall be payable to a Defaulting Backstop Party in the event of a Backstop Party Default.”
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