Disposition of Proceeds of Asset Sales. (a) The Company will not, and will not permit any of its Subsidiaries to, make any Asset Sale unless: (1) the Company or such Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the shares or assets sold or otherwise disposed of; and (2) at least 70% of such consideration consists of cash or Cash Equivalents. (b) To the extent the Net Cash Proceeds of any Asset Sale are not applied to repay (including by way of cash collateralization of outstanding letters of credit) borrowings under the Credit Agreement, as then in effect, or to repay or acquire Senior Indebtedness, subject to the conditions described below, the Company or such Subsidiary, as the case may be, may, within fifteen months of such Asset Sale, apply the Net Cash Proceeds from such Asset Sale to an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in the business of the Company and its Subsidiaries existing on the Issue Date or in businesses reasonably related thereto ("Replacement Assets"); (c) Any Net Cash Proceeds from any Asset Sale that are not used to repay, borrowings under the Credit Agreement or to repay or acquire Senior Indebtedness or that are not invested in Replacement Assets within the fifteen-month period described above shall constitute "Excess Proceeds" subject to disposition as provided below. If Net Cash Proceeds are used to repay borrowings under the Credit Agreement, then the amount of Net Cash Proceeds so used shall reduce the amount of Indebtedness permitted to be incurred under subclause (B) of clause (4) of the definition of Permitted Indebtedness; (d) When the aggregate amount of Excess Proceeds equals or exceeds $15,000,000, the Company shall make an offer to purchase (an "Asset Sale Offer") from all Holders of Securities and all holders of other Indebtedness that is either senior or pari passu in right of payment with the Securities and containing provisions substantially similar to those set forth in this Section 4.12 ("Tenderable Indebtedness"), on a day not more than 40 Business Days thereafter (the "Asset Sale Purchase Date"), an aggregate principal amount of Securities and such other Tenderable Indebtedness equal to such Excess Proceeds, at a price in cash equal to (i) in the case of the Securities, 100% of the outstanding principal amount thereof plus accrued and unpaid interest and Special Interest, in each case, if any, to the purchase date or (ii) in the case of any other Tenderable Indebtedness, the price specified in or permitted by such other Tenderable Indebtedness (collectively with clause (i), the "Asset Sale Offer Price"); (e) Notice of an Asset Sale Offer shall be mailed by the Company to all Holders of Securities not less than 20 Business Days nor more than 40 Business Days before the Asset Sale Purchase Date at their last registered address with a copy to the Trustee and the Paying Agent. The Asset Sale Offer shall remain open from the time of mailing for at least 20 Business Days and until at least 5:00 p.m., Eastern time, on the Asset Sale Purchase Date. The notice, which shall govern the terms of the Asset Sale Offer, shall include such disclosures as are required by law and shall state: (1) that the Asset Sale Offer is being made pursuant to this Section 4.12; (2) the Asset Sale Offer Price (including the amount of accrued interest and Special Interest, if any) for each Security, the Asset Sale Purchase Date and the date on which the Asset Sale Offer expires; (3) that any Security not tendered or accepted for payment will continue to accrue interest in accordance with the terms thereof; (4) that, unless the Company shall default in the payment of the Asset Sale Offer Price, any Security accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Asset Sale Purchase Date; (5) that Holders electing to have Securities purchased pursuant to an Asset Sale Offer will be required to surrender their Securities to the Paying Agent at the address specified in the notice not later than 5:00 p.m., Eastern time, on the last Business Day prior to the Asset Sale Purchase Date and must complete any form of letter of transmittal proposed by the Company and reasonably acceptable to the Trustee and the Paying Agent; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., Eastern time, on the last Business Day prior to the Asset Sale Purchase Date, a tested telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Securities the Holder delivered for purchase, the Security certificate number (if any) and a statement that such Holder is withdrawing its election to have such Securities purchased; (7) that if Securities and other Tenderable Indebtedness in a principal amount in excess of the Excess Proceeds are tendered pursuant to the Asset Sale Offer, the Company shall purchase first from Senior Indebtedness tendered and not withdrawn in accordance with the relative priorities of such Senior Indebtedness or if there are not priorities specified, then on a pro rata basis among such Senior Indebtedness tendered and not withdrawn, and second, on a pro rata basis among the Securities and other Pari Passu Indebtedness tendered and not withdrawn (in each case, with such adjustments as may be deemed appropriate by the Company so that only Securities and Tenderable Indebtedness in denominations of $1,000 or integral multiples of $1,000 shall be acquired); (8) that Holders whose Securities are purchased only in part will be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered; (9) the instructions that Holders must follow in order to tender their Securities; and (10) information concerning the business of the Company, the most recent annual and quarterly reports of the Company filed with the SEC pursuant to the Exchange Act (or, if the Company is not permitted to file any such reports with the Commission, the comparable reports prepared pursuant to Section 4.07), a description of material developments in the Company's business, information with respect to pro forma historical financial information after giving effect to such Asset Sale and Asset Sale Offer and such other information concerning the circumstances and relevant facts regarding such Asset Sale Offer as would be material to a Holder of Securities in connection with the decision of such Holder as to whether or not it should tender Securities pursuant to the Asset Sale Offer. (f) On the Asset Sale Purchase Date, the Company shall (1) accept for payment, first from Senior Indebtedness tendered and not withdrawn in accordance with the relative priorities of such Senior Indebtedness or if there are not priorities specified, then on a pro rata basis among such Senior Indebtedness tendered and not withdrawn, and second, on a pro rata basis among the Securities and Pari Passu Indebtedness tendered and not withdrawn, (2) deposit with the Paying Agent money, in immediately available funds, in an amount sufficient to pay the Asset Sale Offer Price of all Securities or portions thereof so tendered and accepted and (3) deliver to the Trustee the Securities so accepted together with an Officers' Certificate setting forth the Securities or portions thereof tendered to and accepted for payment by the Company. The Paying Agent shall promptly mail or deliver to Holders of Securities so accepted payment in an amount equal to the Asset Sale Offer Price, and the Trustee shall promptly authenticate and mail or deliver to such Holders a new Security equal in principal amount to any unpurchased portion of the Security surrendered. Any Securities not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Sale Offer not later than the first Business Day following the Asset Sale Purchase Date. To the extent that the aggregate principal amount of Securities and Tenderable Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use such deficiency for general corporate purposes. Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset to zero. For purposes of this Section 4.12, the Company shall not act as Paying Agent; (g) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act, Rule 14e-1 promulgated thereunder and any other securities laws or regulations in connection with the repurchase of Securities pursuant to the Asset Sale Offer.
Appears in 1 contract
Samples: Indenture (Interface Inc)
Disposition of Proceeds of Asset Sales. (a) The Company will not, and will not permit any of its Subsidiaries to, make any Asset Sale unless:
(1) the Company or such Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the shares or assets sold or otherwise disposed of; and
(2) at least 70% of such consideration consists of cash or Cash Equivalents.
(b) To the extent the Net Cash Proceeds of any Asset Sale are not applied to repay (including by way of cash collateralization of outstanding letters of credit) borrowings under the Credit Agreement, as then in effect, or to repay or acquire other Senior Indebtedness, subject to the conditions described below, the Company or such Subsidiary, as the case may be, may, within fifteen months of such Asset Sale, apply the Net Cash Proceeds from such Asset Sale to an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in the business of the Company and its Subsidiaries existing on the Issue Date or in businesses reasonably related thereto ("Replacement Assets");
(c) Any Net Cash Proceeds from any Asset Sale that are not used to repay, borrowings under the Credit Agreement or to repay or acquire other Senior Indebtedness or that are not invested in Replacement Assets within the fifteen-month period described above shall constitute "Excess Proceeds" subject to disposition as provided below. If Net Cash Proceeds are used to repay borrowings under the Credit Agreement, then the amount of Net Cash Proceeds so used shall reduce the amount of Indebtedness permitted to be incurred under subclause (B) of clause (4) of the definition of Permitted Indebtedness;
(d) When the aggregate amount of Excess Proceeds equals or exceeds $15,000,000, the Company shall make an offer to purchase (an "Asset Sale Offer") from all Holders of Securities and all holders of other Indebtedness that is either senior or pari passu in right of payment with the Securities and containing provisions substantially similar to those set forth in this Section 4.12 ("Tenderable Indebtedness"), on a day not more than 40 Business Days thereafter (the "Asset Sale Purchase Date"), an aggregate principal amount of Securities and such other Tenderable Indebtedness equal to such Excess Proceeds, at a price in cash equal to (i) in the case of the Securities, 100% of the outstanding principal amount thereof plus accrued and unpaid interest and Special Interest, in each case, if any, to the purchase date or (ii) in the case of any other Tenderable Indebtedness, the price specified in or permitted by such other Tenderable Indebtedness (collectively with clause (i), the "Asset Sale Offer Price");
(e) Notice of an Asset Sale Offer shall be mailed by the Company to all Holders of Securities not less than 20 Business Days nor more than 40 Business Days before the Asset Sale Purchase Date at their last registered address with a copy to the Trustee and the Paying Agent. The Asset Sale Offer shall remain open from the time of mailing for at least 20 Business Days and until at least 5:00 p.m., Eastern time, on the Asset Sale Purchase Date. The notice, which shall govern the terms of the Asset Sale Offer, shall include such disclosures as are required by law and shall state:
(1) that the Asset Sale Offer is being made pursuant to this Section 4.12;
(2) the Asset Sale Offer Price (including the amount of accrued interest and Special Interest, if any) for each Security, the Asset Sale Purchase Date and the date on which the Asset Sale Offer expires;
(3) that any Security not tendered or accepted for payment will continue to accrue interest in accordance with the terms thereof;
(4) that, unless the Company shall default in the payment of the Asset Sale Offer Price, any Security accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Asset Sale Purchase Date;
(5) that Holders electing to have Securities purchased pursuant to an Asset Sale Offer will be required to surrender their Securities to the Paying Agent at the address specified in the notice not later than 5:00 p.m., Eastern time, on the last Business Day prior to the Asset Sale Purchase Date and must complete any form of letter of transmittal proposed by the Company and reasonably acceptable to the Trustee and the Paying Agent;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., Eastern time, on the last Business Day prior to the Asset Sale Purchase Date, a tested telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Securities the Holder delivered for purchase, the Security certificate number (if any) and a statement that such Holder is withdrawing its election to have such Securities purchased;
(7) that if Securities and other Tenderable Indebtedness in a principal amount in excess of the Excess Proceeds are tendered pursuant to the Asset Sale Offer, the Company shall purchase first from Senior Indebtedness tendered and not withdrawn in accordance with the relative priorities of such Senior Indebtedness or if there are not priorities specified, then on a pro rata basis among such Senior Indebtedness tendered and not withdrawn, and second, on a pro rata basis among the Securities and other Pari Passu Indebtedness tendered and not withdrawn (in each case, with such adjustments as may be deemed appropriate by the Company so that only Securities and Tenderable Indebtedness in denominations of $1,000 or integral multiples of $1,000 shall be acquired);
(8) that Holders whose Securities are purchased only in part will be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered;
(9) the instructions that Holders must follow in order to tender their Securities; and
(10) information concerning the business of the Company, the most recent annual and quarterly reports of the Company filed with the SEC pursuant to the Exchange Act (or, if the Company is not permitted to file any such reports with the Commission, the comparable reports prepared pursuant to Section 4.07), a description of material developments in the Company's business, information with respect to pro forma historical financial information after giving effect to such Asset Sale and Asset Sale Offer and such other information concerning the circumstances and relevant facts regarding such Asset Sale Offer as would be material to a Holder of Securities in connection with the decision of such Holder as to whether or not it should tender Securities pursuant to the Asset Sale Offer.
(f) On the Asset Sale Purchase Date, the Company shall (1) accept for payment, first from Senior Indebtedness tendered and not withdrawn in accordance with the relative priorities of such Senior Indebtedness or if there are not priorities specified, then on a pro rata basis among such Senior Indebtedness tendered and not withdrawn, and second, on a pro rata basis among the Securities and Pari Passu Indebtedness tendered and not withdrawn, (2) deposit with the Paying Agent money, in immediately available funds, in an amount sufficient to pay the Asset Sale Offer Price of all Securities or portions thereof so tendered and accepted and (3) deliver to the Trustee the Securities so accepted together with an Officers' Certificate setting forth the Securities or portions thereof tendered to and accepted for payment by the Company. The Paying Agent shall promptly mail or deliver to Holders of Securities so accepted payment in an amount equal to the Asset Sale Offer Price, and the Trustee shall promptly authenticate and mail or deliver to such Holders a new Security equal in principal amount to any unpurchased portion of the Security surrendered. Any Securities not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Sale Offer not later than the first Business Day following the Asset Sale Purchase Date. To the extent that the aggregate principal amount of Securities and Tenderable Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use such deficiency for general corporate purposes. Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset to zero. For purposes of this Section 4.12, the Company shall not act as Paying Agent;
(g) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act, Rule 14e-1 promulgated thereunder and any other securities laws or regulations in connection with the repurchase of Securities pursuant to the Asset Sale Offer.Excess
Appears in 1 contract
Samples: Indenture (Interface Inc)
