Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such Material Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the Fair Market Value of the shares and assets subject to such Asset Disposition, as such Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may be determined (and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million) in good faith by the Borrower, which determination shall be conclusive (including as to the value of all noncash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) of $25.0 million or more, at least 75.0% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis) received by the Borrower or such Material Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of this subsection 7.4(b)) of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the Restatement Effective Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of this subsection 7.4(b)) of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of the Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by the Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition or Recovery Event, as the case may be, and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or Obligations in respect thereof or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness or Obligations in respect thereof (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) above, within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase Additional Indebtedness on a pro rata basis with the Term Loans in accordance with subsection 3.4(c) (and subject to subsections 3.4(d) and 3.4(e)) or the agreements or instruments governing such Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any Lender (the “Declined Excess Proceeds”)), to fund (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection 7.4, (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 (excluding all Leverage Excess Proceeds) exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i) Temporary Cash Investments and Cash Equivalents; (ii) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; (iii) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; (iv) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; (v) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; (vi) Additional Assets; and (vii) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $185.0 million and 4.0% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on the date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into and without giving effect to subsequent changes in value).

Appears in 6 contracts

Samples: Credit Agreement (US Foods Holding Corp.), Credit Agreement (US Foods Holding Corp.), Term Loan Credit Agreement (US Foods Holding Corp.)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Borrower, which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), ) an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) ~~the~~ Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by ~~the~~ Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent ~~the~~ Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of ~~the~~ Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by ~~the~~ Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition ~~or Recovery Event, as the case may be,~~ and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than ~~any such~~ Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash;, (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above~~above (such balance, the “Excess Proceeds”), within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent the Borrower or any Restricted Subsidiary is required by the terms thereof) to prepay, repay or purchase other Additional Indebtedness on a pro rata basis with the Term ~~Loans~~ Loans, in accordance with subsection ~~3.4(c~~3.4(d) (and subject to subsections ~~3.4(d~~3.4(e) and ~~3.4(e)~~3.4(f) thereof) or the agreements or instruments governing such other Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including without limitation an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any ~~Lender (the “Declined Excess Proceeds”)~~Lender), to fund any general corporate purposes (including but not limited to the repayment of Senior Interim Loans, Senior Notes, Existing Notes or Subordinated Obligations) (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4 (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 ~~(excluding all Leverage Excess Proceeds)~~ exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, ~~the Borrower or~~ any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (~~including~~ including, without limitation, any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii)) above, the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; , (v5) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi6) Additional ~~Assets;~~ Assets and (~~vii~~7) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 125.0 million and ~~4.0~~10.0% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value).

Appears in 2 contracts

Samples: Credit Agreement (Servicemaster Co), Credit Agreement (Servicemaster Co)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value~~ fair market value (on the date a legally binding commitment for such Asset Disposition was entered into) may be determined in good faith by the Borrower (and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $~~25.0~~ 70.0 million~~) in good faith by the Borrower~~), which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration),, and (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value~~ fair market value (on the date a legally binding commitment for such Asset Disposition was entered into) of $~~25.0~~ 50.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of this subsection 7.4(b)) of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the Restatement Effective Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of this subsection 7.4(b)) of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of the Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by the Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition or Recovery Event, as the case may be, and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or Obligations in respect thereof or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness or Obligations in respect thereof (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) above, within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase Additional Indebtedness on a pro rata basis with the Term Loans in accordance with subsection 3.4(c) (and subject to subsections 3.4(d) and 3.4(e)) or the agreements or instruments governing such Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any Lender (the “Declined Excess Proceeds”)), to fund (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection 7.4, (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 (excluding all Leverage Excess Proceeds) exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i) Temporary Cash Investments and Cash Equivalents; (ii) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; (iii) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; (iv) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; (v) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; (vi) Additional Assets; and (vii) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $185.0 million and 4.0% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on the date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into and without giving effect to subsequent changes in value).

Appears in 2 contracts

Samples: Credit Agreement (Servicemaster Global Holdings Inc), Credit Agreement (Servicemaster Global Holdings Inc)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any ~~Material~~ Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Borrower, which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration),; (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least 75.0% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, ; and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition (other than the Net Available Cash from the Power Solutions Asset Sale) is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition (other than the Power Solutions Asset Sale) or (y) a Recovery Event shall occur, an amount equal to 100.0% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (A) To the extent that such Net Available Cash is in respect of a Recovery Event or from an Asset Disposition of Collateral, an amount equal to 100.0% of the Net Available Cash from such Recovery Event or such Asset Disposition shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be): (i) first, either (x) to the extent that such Net Available Cash is from an Asset Disposition of, or Recovery Event with respect to, any ABL Priority Collateral, and to the extent that the Borrower or such Restricted Subsidiary elects (or is required by the terms of any Indebtedness under the ABL Facility or any other Indebtedness constituting ABL Obligations), to prepay, repay or purchase any such Indebtedness or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness within 450 days after the later of the date of such Asset Disposition or Recovery Event and the date of receipt of such Net Available Cash, or (y) to the extent that the Borrower or such Restricted Subsidiary elects, to ~~reinvest or commit to reinvest~~ invest in ~~the business of the Borrower and its Restricted Subsidiaries~~ Additional Assets (including ~~any~~ by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to Net Available Cash received by the Borrower or ~~any~~ another Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition or Recovery ~~Event, as the case may be,~~ Event and the date of receipt of such Net Available ~~Cash (~~Cash, or, if such ~~reinvestment~~ investment in Additional Assets is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or Obligations in respect thereof or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness or Obligations in respect thereof (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash;; and (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above, within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant~~ above to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase Additional Indebtedness on a pro rata basis with prepay the Term Loans in accordance with subsection 3.4(c) (~~and~~ subject to subsections 3.4(d) and 3.4(e)) thereof) and (to the extent the Borrower or such Restricted Subsidiary elects, or is required by the terms thereof) to purchase, redeem or repay any Senior First Priority Notes, any Additional Obligations of the Borrower or a Restricted Subsidiary having Pari Passu Lien Priority, or any other Indebtedness having Pari Passu Lien Priority, pursuant to the agreements ~~or instruments~~ governing such ~~Additional~~ other Indebtedness~~; and~~; (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any ~~Lender (the “Declined Excess Proceeds”)~~Lender), to fund ~~(to the extent consistent with any other applicable provision of this Agreement)~~ any general corporate ~~purpose~~ purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of any Senior Second Lien Priority Notes, Senior Unsecured Indebtedness, Senior Subordinated ~~Obligations~~ Notes or ~~the making of other Restricted Payments~~Subordinated Obligations); , provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (ii) above, the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (~~or any Restricted Subsidiary, as the case may be~~if any) ~~may elect~~ to ~~invest~~ be permanently reduced in ~~Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice~~ an amount equal to the ~~Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the~~ principal amount so ~~invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided~~prepaid, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than repaid or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) purchased. Notwithstanding the foregoing provisions of this subsection ~~7.4~~7.4(b)(A), the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4(b)(A) (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events subject to this subsection 7.4(b)(A) or equivalent amount that is not applied in accordance with this subsection ~~7.4 (excluding all Leverage Excess Proceeds~~7.4(b)(A) exceeds $~~50.0~~ 75.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any material adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (dB) To the extent that such Net Available Cash is in respect of an Asset Disposition of any assets not constituting Collateral (“Other Assets”), an amount equal to 100.0% of the Net Available Cash from such Asset Disposition shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be): (i) first, either (x) to the extent that the Borrower elects (or is required by the terms of any Credit Facility Indebtedness, any Senior Indebtedness of the Borrower or any Subsidiary Guarantor or any Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness (in each case other than Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash, or (y) to the extent that the Borrower or such Restricted Subsidiary elects, to invest in Additional Assets (including by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to Net Available Cash received by the Borrower or another Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash, or, if such investment in Additional Assets is a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (A) above, to prepay the Term Loans in accordance with subsection 3.4(c) (subject to subsections 3.4(d) and 3.4(e) thereof) and (to the extent the Borrower or such Restricted Subsidiary elects, or is required by the terms thereof) to purchase, redeem or repay any Senior First Lien Priority Notes, any Additional Obligations of the Borrower or a Restricted Subsidiary having Pari Passu Lien Priority, or any other Indebtedness having Pari Passu Lien Priority, pursuant to the agreements governing such other Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition that is declined by any Lender), to fund any general corporate purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of any Senior Second Lien Priority Notes, Senior Unsecured Indebtedness, Senior Subordinated Notes or Subordinated Obligations); provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (ii) above, the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing provisions of this subsection 7.4(b)(B), the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection 7.4(b)(B) (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions subject to this subsection 7.4(b)(B) or equivalent amount that is not applied in accordance with this subsection 7.4(b)(B) exceeds $75.0 million and (y) in the case of any Asset Disposition by the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any material adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (c) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; , (v5) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi6) Additional ~~Assets;~~ Assets and (~~vii~~7) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 125.0 million and ~~4.0~~2.5% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value). (d) For the purposes of subsection 7.4(b)(A) and (B), (i) in the event of any Asset Disposition of Capital Stock of a Person that has any right, title or interest to or in assets constituting both Collateral and Other Assets, such Asset Disposition shall instead be deemed to be an Asset Disposition of such assets, and the Borrower shall allocate the Net Available Cash from such Asset Disposition between the Collateral and the Other Assets in proportion to their respective fair market values as determined by the Borrower in good faith (which determination shall be conclusive), (ii) any Asset Disposition of Capital Stock of any Person that has any right, title or interest to or in assets constituting only Other Assets will be subject to subsection 7.4(b)(B) and not subsection 7.4(b)(A), and (iii) any Asset Disposition of Capital Stock of any Person that has any right, title or interest to or in assets constituting only Collateral will be subject to subsection 7.4(b)(A) and not subsection 7.4(b)(B). .

Appears in 2 contracts

Samples: Credit Agreement (Hd Supply, Inc.), Incremental Agreement (Hd Supply, Inc.)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any ~~Material~~ Restricted Subsidiary to, make any Asset Disposition (other than any Asset Disposition pursuant to or in connection with the Transactions) unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the Fair Market Value (as of ~~the shares and assets subject to such Asset Disposition, as such Fair Market Value (on~~ the date a legally binding commitment for such Asset Disposition was entered into) ~~may be determined (~~of the shares and ~~shall be determined,~~ assets subject to ~~the extent~~ such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million) in good faith by the Borrower, which determination shall be conclusive (including as to the value of all noncash consideration)Disposition, (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a Fair Market Value (on as of the date a legally binding commitment for such Asset Disposition was entered into) of $~~25.0~~ 30.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of ~~this~~ subsection 7.4(b)) of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement~~ Effective Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of this subsection 7.4(b)) of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Borrower or such Restricted Subsidiary elects, to ~~reinvest or commit to reinvest~~ invest in ~~the business of the Borrower and its Restricted Subsidiaries~~ Additional Assets (including ~~any~~ by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to the ~~Borrower~~ Net Available Cash received by the Company or ~~any~~ another Restricted Subsidiary) within ~~450 days~~ 12 months from the later of the date of such Asset Disposition or Recovery Event, as the case may be, and the date of receipt of such Net Available Cash (or, if such ~~reinvestment~~ investment in Additional Assets is in a project authorized by the Board of Directors that will take longer than ~~such 450 days~~ 12 months to complete, the period of time necessary to complete such project); provided that a binding commitment or letter of intent shall be treated as a permitted application of the Net Available Cash from the date of such commitment or letter of intent until the 18-month anniversary of the later of the date of such Asset Disposition or Recovery Event and the date of receipt of such Net Available Cash (such 18-month anniversary, the “18-Month Anniversary”) (so long as the Borrower or such Restricted Subsidiary enters into such commitment or letter of intent with the good faith expectation that such Net Available Cash will be applied to satisfy such commitment or letter of intent within such period and such Net Available Cash is actually applied in such manner); provided, further, that in the event such binding commitment or letter of intent is later cancelled or terminated for any reason on or after the 12-month anniversary of the later of the date of such Asset Disposition or Recovery Event, as applicable, and the date of receipt of such Net Available Cash but before such Net Available Cash is so applied, then such Net Available Cash shall constitute Excess Proceeds pursuant to clause (ii) below unless the Borrower or such Restricted Subsidiary enters into another binding commitment (a “Second Commitment”) within six months of such cancellation or termination of the prior binding commitment (but in any event no later than the 18-Month Anniversary); provided, further, that the Borrower or such Restricted Subsidiary may only enter into a Second Commitment under the foregoing provision one time with respect to each Asset Disposition or Recovery Event, and to the extent such Second Commitment is later cancelled or terminated for any reason before such Net Available Cash is applied or such Net Available Cash is not applied within six months of such Second Commitment, then such Net Available Cash shall constitute Excess Proceeds pursuant to clause (ii) below; or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than ~~any such~~ Indebtedness owed to the Borrower or a Restricted Subsidiary) within ~~450 days~~ 12 months after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above~~above (such balance, ~~within~~ the ~~longest~~ “Excess Proceeds”), no later than the latest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent the Borrower or any Restricted Subsidiary is required by the terms thereof) to prepay, repay or purchase other Additional Indebtedness that is Pari Passu Indebtedness on a pro rata basis with the Term ~~Loans~~ Loans, in accordance with subsection ~~3.4(c~~3.4(d) (and subject to subsections ~~3.4(d~~3.4(e) and ~~3.4(e~~3.4(f)) or the agreements or instruments governing such other Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (~~including an amount equal to~~ the amount of ~~any prepayment otherwise contemplated by clause (ii) above in connection with~~ such ~~Asset Disposition or Recovery Event that is declined by any Lender (~~balance, the “Declined Excess Proceeds”)), to fund ~~(to the extent consistent with any other applicable provision of this Agreement)~~ any general corporate ~~purpose~~ purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of ~~any~~ Loans or Subordinated Obligations or the making of any other Restricted ~~Payments~~Payment); provided, however, that (x) in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (b)(i)(y) or (b)(ii), the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased, (y) the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (~~A)(y~~b)(i)(x) above with respect to such Asset ~~Disposition; provided, further, that~~ Disposition and (z) the percentage first set forth above in this subsection 7.4(b) shall be reduced to ~~(I)~~ 50.0% if the Consolidated ~~Secured~~ Net Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 ~~and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time~~ after giving pro forma effect to any application of such ~~Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00~~ Net Available Cash as set forth herein (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with ~~this subsection 7.4(b) as~~ clause (b)as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash ~~or equivalent amount~~ in accordance with this subsection ~~7.4,~~ 7.4 (x1) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events ~~or equivalent amount~~ that is not applied in accordance with this subsection 7.4 (excluding all Leverage Excess Proceeds) exceeds $~~50.0~~ 20.0 million and (y2) in to the ~~case~~ extent that repatriating or transferring any or all of the Net Available Cash from any Asset Disposition by, or Recovery Event relating to any asset of, ~~the Borrower or~~ any Restricted Subsidiary that is not a Subsidiary ~~Guarantor, to the extent that~~ Guarantor (iw) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) could result in ~~the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly~~ adverse tax consequences to the Borrower or any of its Subsidiaries, (x) is prohibited or delayed by applicable local law, (y) could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or ~~shareholders~~ equityholders of the ~~Borrower,~~ Borrower or any Restricted ~~Subsidiary or any Parent~~Subsidiary, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the ~~Borrower~~ Company or any Restricted ~~Subsidiary,~~ Subsidiary or (D) any material risk of any such violation or liability referred to in ~~any of the preceding~~ clauses (A), (B) and (C~~), (E~~) ~~any adverse tax consequence for the Borrower or any Restricted Subsidiary,~~ or (Fz) could reasonably be expected to give rise to or result in any cost, expense, liability or obligation (including any ~~Tax~~tax) other than routine and immaterial out-of-pocket ~~expenses~~expenses (in the case of the foregoing clauses (w), (x), (y) and (z), as determined by the Borrower in good faith, which determination shall be conclusive), the portion of such Net Available Cash so affected will not be required to be applied in compliance with the foregoing provisions of this covenant, and such amounts may be retained by the Borrower or any Restricted Subsidiary or invested in, distributed to or otherwise transferred to any other Subsidiary); provided that in the case of the foregoing clause (2)(y), the Borrower shall take commercially reasonable efforts to and to cause the applicable Restricted Subsidiary to, take all actions reasonably required by the applicable local law, the applicable organizational impediments or other impediment to permit such repatriation or transfer, and if such repatriation or transfer of any of such affected Net Available Cash can be achieved, such repatriation or transfer will be promptly effected and such repatriated or transferred Net Available Cash will be applied (whether or not repatriation or transfer actually occurs) in compliance with the foregoing provisions of this subsection 7.4. The time periods set forth in this subsection 7.4 shall not start until such time as the Net Available Cash may be repatriated or transferred whether or not such repatriation or transfer actually occurs. (d) For the purposes of subsection 7.4(a)(ii)) above, the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 ~~days;~~ days (vto the extent of the cash received), (5) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi6) Additional ~~Assets;~~ Assets and (~~vii~~7) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 75.0 million and ~~4.0~~19.0% of Consolidated Tangible Assets as of the date a legally binding commitment for such Asset Disposition was entered into (with the Fair Market Value of each item of Designated Noncash Consideration being measured on as of the date a legally binding commitment for such Asset Disposition (~~or,~~ or if later, for the payment of such item) was entered into and without giving effect to subsequent changes in value).

Appears in 2 contracts

Samples: Credit Agreement (Frontdoor, Inc.), Credit Agreement (Servicemaster Global Holdings Inc)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such Material Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Borrower, which determination shall be conclusive (including as to the value of all noncash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such Material Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of the Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by the Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition ~~or Recovery Event, as the case may be,~~ and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above~~above (such balance, the “Excess Proceeds”), within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase Indebtedness under the 2007 Term Facility or other Additional Indebtedness on a pro rata basis with the Term Loans in accordance with subsection 3.4(c) (and subject to subsections 3.4(d) and 3.4(e)) or the agreements or instruments governing such Indebtedness under the 2007 Term Facility or other Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including without limitation an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any ~~Lender (the “Declined Excess Proceeds”)~~Lender), to fund (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”)purposes. (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4 (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 ~~(excluding all Leverage Excess Proceeds)~~ exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (~~including~~ including, without limitation, any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i) Temporary Cash Investments and Cash Equivalents; , (ii) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iii) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; , (v) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi) Additional ~~Assets;~~ Assets and (vii) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 165 million and 4.0% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value).

Appears in 2 contracts

Samples: Credit Agreement (Trans-Porte, Inc.), Credit Agreement (Great North Imports, LLC)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any ~~Material~~ Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the Fair Market Value (as of ~~the shares and assets subject to such Asset Disposition, as such Fair Market Value (on~~ the date a legally binding commitment for such Asset Disposition was entered into) ~~may be determined (~~of the shares and ~~shall be determined,~~ assets subject to ~~the extent~~ such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million) in good faith by the Borrower, which determination shall be conclusive (including as to the value of all noncash consideration)Disposition, (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a Fair Market Value (on as of the date a legally binding commitment for such Asset Disposition was entered into) of $~~25.0~~ 30.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of ~~this~~ subsection 7.4(b)) of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement~~ 2021 Amendment Effective Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of this subsection 7.4(b)) of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Borrower or such Restricted Subsidiary elects, to ~~reinvest or commit to reinvest~~ invest in ~~the business of the Borrower and its Restricted Subsidiaries~~ Additional Assets (including ~~any~~ by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to the ~~Borrower~~ Net Available Cash received by the Company or ~~any~~ another Restricted Subsidiary) within ~~450 days~~ 12 months from the later of the date of such Asset Disposition or Recovery Event, as the case may be, and the date of receipt of such Net Available Cash (or, if such ~~reinvestment~~ investment in Additional Assets is in a project authorized by the Board of Directors that will take longer than ~~such 450 days~~ 12 months to complete, the period of time necessary to complete such project); provided that a binding commitment or letter of intent shall be treated as a permitted application of the Net Available Cash from the date of such commitment or letter of intent until the 18-month anniversary of the later of the date of such Asset Disposition or Recovery Event and the date of receipt of such Net Available Cash (such 18-month anniversary, the “18-Month Anniversary”) (so long as the Borrower or such Restricted Subsidiary enters into such commitment or letter of intent with the good faith expectation that such Net Available Cash will be applied to satisfy such commitment or letter of intent within such period and such Net Available Cash is actually applied in such manner); provided, further, that in the event such binding commitment or letter of intent is later cancelled or terminated for any reason on or after the 12-month anniversary of the later of the date of such Asset Disposition or Recovery Event, as applicable, and the date of receipt of such Net Available Cash but before such Net Available Cash is so applied, then such Net Available Cash shall constitute Excess Proceeds pursuant to clause (ii) below unless the Borrower or such Restricted Subsidiary enters into another binding commitment (a “Second Commitment”) within six months of such 144 [[5629054]] cancellation or termination of the prior binding commitment (but in any event no later than the 18-Month Anniversary); provided, further, that the Borrower or such Restricted Subsidiary may only enter into a Second Commitment under the foregoing provision one time with respect to each Asset Disposition or Recovery Event, and to the extent such Second Commitment is later cancelled or terminated for any reason before such Net Available Cash is applied or such Net Available Cash is not applied within six months of such Second Commitment, then such Net Available Cash shall constitute Excess Proceeds pursuant to clause (ii) below; or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than ~~any such~~ Indebtedness owed to the Borrower or a Restricted Subsidiary) within ~~450 days~~ 12 months after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above~~above (such balance, ~~within~~ the ~~longest~~ “Excess Proceeds”), no later than the latest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent the Borrower or any Restricted Subsidiary is required by the terms thereof) to prepay, repay or purchase other Additional Indebtedness that is Pari Passu Indebtedness on a pro rata basis with the Term ~~Loans~~ Loans, in accordance with subsection ~~3.4(c~~3.4(d) (and subject to subsections ~~3.4(d~~3.4(e) and ~~3.4(e~~3.4(f)) or the agreements or instruments governing such other Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (~~including an amount equal to~~ the amount of ~~any prepayment otherwise contemplated by clause (ii) above in connection with~~ such ~~Asset Disposition or Recovery Event that is declined by any Lender (~~balance, the “Declined Excess Proceeds”)), to fund ~~(to the extent consistent with any other applicable provision of this Agreement)~~ any general corporate ~~purpose~~ purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of ~~any~~ Loans or Subordinated Obligations or the making of any other Restricted ~~Payments~~Payment); provided, however, that (x) in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (b)(i)(y) or (b)(ii), the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased, (y) the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (~~A)(y~~b)(i)(x) above with respect to such Asset ~~Disposition; provided, further, that~~ Disposition and (z) the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I1) 50.0% if the Consolidated ~~Secured~~ Net Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to ~~3.00:1.00~~ 3.25:1.00 after giving pro forma effect to any application of such Net Available Cash as set forth herein and (II2) ~~25.0~~0.0% if the Consolidated ~~Secured~~ Net Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to ~~2.00:1.00~~ 2.75:1.00 after giving pro forma effect to any application of such Net Available Cash as set forth herein (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with ~~this subsection 7.4(b~~clause (b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”).. [[5629054]] (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash ~~or equivalent amount~~ in accordance with this subsection ~~7.4,~~ 7.4 (x1) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events ~~or equivalent amount~~ that is not applied in accordance with this subsection 7.4 (excluding all Leverage Excess Proceeds) exceeds $~~50.0~~ 25.0 million in any fiscal year of the Borrower and (y2) in to the ~~case~~ extent that repatriating or transferring any or all of the Net Available Cash from any Asset Disposition by, or Recovery Event relating to any asset of, ~~the Borrower or~~ any Restricted Subsidiary that is not a Subsidiary ~~Guarantor, to the extent that~~ Guarantor (iw) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) could result in ~~the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly~~ adverse tax consequences to the Borrower or any of its Subsidiaries, (x) is prohibited or delayed by applicable local law, (y) could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or ~~shareholders~~ equityholders of the ~~Borrower,~~ Borrower or any Restricted ~~Subsidiary or any Parent~~Subsidiary, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the ~~Borrower~~ Company or any Restricted ~~Subsidiary,~~ Subsidiary or (D) any material risk of any such violation or liability referred to in ~~any of the preceding~~ clauses (A), (B) and (C~~), (E~~) ~~any adverse tax consequence for the Borrower or any Restricted Subsidiary,~~ or (Fz) could reasonably be expected to give rise to or result in any cost, expense, liability or obligation (including any ~~Tax~~tax) other than routine and immaterial out-of-pocket ~~expenses~~expenses (in the case of the foregoing clauses (w), (x), (y) and (z), as determined by the Borrower in good faith, which determination shall be conclusive), the portion of such Net Available Cash so affected will not be required to be applied in compliance with the foregoing provisions of this covenant, and such amounts may be retained by the Borrower or any Restricted Subsidiary or invested in, distributed to or otherwise transferred to any other Subsidiary); provided that in the case of the foregoing clause (2)(y), the Borrower shall take commercially reasonable efforts to and to cause the applicable Restricted Subsidiary to, take all actions reasonably required by the applicable local law, the applicable organizational impediments or other impediment to permit such repatriation or transfer, and if such repatriation or transfer of any of such affected Net Available Cash can be achieved, such repatriation or transfer will be promptly effected and such repatriated or transferred Net Available Cash will be applied (whether or not repatriation or transfer actually occurs) in compliance with the foregoing provisions of this subsection 7.4. The time periods set forth in this subsection 7.4 shall not start until such time as the Net Available Cash may be repatriated or transferred whether or not such repatriation or transfer actually occurs. (d) For the purposes of subsection 7.4(a)(ii)) above, the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 ~~days;~~ days (vto the extent of the cash received), (5) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi6) Additional ~~Assets;~~ Assets and (~~vii~~7) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 75.0 million and ~~4.0~~30% of Consolidated ~~Tangible Assets~~ EBITDA for the Most Recent Four Quarter Period as of the date a legally binding commitment for such Asset Disposition was entered into (with the Fair Market Value of each item of Designated Noncash Consideration being measured on as of the date a legally binding commitment for such Asset Disposition (~~or,~~ or if later, for the payment of such item) was entered into and without giving effect to subsequent changes in value).

Appears in 1 contract

Samples: Credit Agreement (Frontdoor, Inc.)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Parent Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Parent Borrower or such Material Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Parent Borrower, which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Parent Borrower or such Material Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection ~~7.4(b~~8.4(b), an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition is applied by the Parent Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) the Parent Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Parent Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Parent Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of the Parent Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by the Parent Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition ~~or Recovery Event, as the case may be,~~ and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Parent Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than any such Indebtedness owed to the Parent Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash;; and (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above, within the longest of~~ above (~~1) 10 Business Days of determination of~~ such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase Additional Indebtedness on a pro rata basis with the Term Loans in accordance with subsection 3.4(c) (and subject to subsections 3.4(d) and 3.4(e)) or the agreements or instruments governing such Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any Lender (the “~~Declined~~ Excess Proceeds”)), to fund (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”)purposes. (c) Notwithstanding the foregoing provisions of this subsection ~~7.4~~8.4, the Parent Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4, (x)~~ 8.4 except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection ~~7.4 (excluding all Leverage Excess Proceeds)~~ 8.4 exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Parent Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Parent Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Parent Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Parent Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Parent Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Parent Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Parent Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (~~including~~ including, without limitation, any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection ~~7.4(a)(ii~~8.4(a)(ii), the following are deemed to be cash: (i) Temporary Cash Investments and Cash Equivalents; , (ii) the assumption of Indebtedness of the Parent Borrower (other than Disqualified Stock of the Parent Borrower) or any Restricted Subsidiary and the release of the Parent Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iii) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Parent Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv) securities received by the Parent Borrower or any Restricted Subsidiary from the transferee that are converted by the Parent Borrower or such Restricted Subsidiary into cash within 180 days; , (v) consideration consisting of Indebtedness of the Parent Borrower or any Restricted Subsidiary; , (vi) Additional ~~Assets;~~ Assets and (vii) any Designated Noncash Consideration received by the Parent Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 150.0 million and 4.0% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value).

Appears in 1 contract

Samples: Revolving Credit Agreement (Great North Imports, LLC)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Parent Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Parent Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Parent Borrower, which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Parent Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), ) an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition is applied by the Parent Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) ~~the~~ Parent Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by ~~the~~ Parent Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent ~~the~~ Parent Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of ~~the~~ Parent Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by ~~the~~ Parent Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition ~~or Recovery Event, as the case may be,~~ and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Parent Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than ~~any such~~ Indebtedness owed to the Parent Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash;; and (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above, within the longest of~~ above (~~1) 10 Business Days of determination of~~ such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase Additional Indebtedness on a pro rata basis with the Term Loans in accordance with subsection 3.4(c) (and subject to subsections 3.4(d) and 3.4(e)) or the agreements or instruments governing such Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any Lender (the “~~Declined~~ Excess Proceeds”~~)),~~ ) to fund any general corporate purposes (including but not limited to the repayment of Senior Interim Loans, Senior Notes, Existing Notes or Subordinated Obligations) (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Parent Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4 (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 ~~(excluding all Leverage Excess Proceeds)~~ exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, ~~the Borrower or~~ any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Parent Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Parent Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Parent Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Parent Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Parent Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Parent Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (~~including~~ including, without limitation, any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii)) above, the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Parent Borrower (other than Disqualified Stock of the Parent Borrower) or any Restricted Subsidiary and the release of the Parent Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Parent Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Parent Borrower or any Restricted Subsidiary from the transferee that are converted by the Parent Borrower or such Restricted Subsidiary into cash within 180 days; , (v5) consideration consisting of Indebtedness of the Parent Borrower or any Restricted Subsidiary; , (vi6) Additional ~~Assets;~~ Assets and (~~vii~~7) any Designated Noncash Consideration received by the Parent Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 125.0 million and ~~4.0~~10.0% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value).

Appears in 1 contract

Samples: Revolving Credit Agreement (Servicemaster Co)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any ~~Material~~ Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the Fair Market Value (as of ~~the shares and assets subject to such Asset Disposition, as such Fair Market Value (on~~ the date a legally binding commitment for such Asset Disposition was entered into) ~~may be determined (~~of the shares and ~~shall be determined,~~ assets subject to ~~the extent~~ such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million) in good faith by the Borrower, which determination shall be conclusive (including as to the value of all noncash consideration)Disposition, (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a Fair Market Value (on as of the date a legally binding commitment for such Asset Disposition was entered into) of $~~25.0~~ 30.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of ~~this~~ subsection 7.4(b)) of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement~~ 2021 Amendment Effective Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of this subsection 7.4(b)) of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Borrower or such Restricted Subsidiary elects, to ~~reinvest or commit to reinvest~~ invest in ~~the business of the Borrower and its Restricted Subsidiaries~~ Additional Assets (including ~~any~~ by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to the ~~Borrower~~ Net Available Cash received by the Company or ~~any~~ another Restricted Subsidiary) within ~~450 days~~ 12 months from the later of the date of such Asset Disposition or Recovery Event, as the case may be, and the date of receipt of such Net Available Cash (or, if such ~~reinvestment~~ investment in Additional Assets is in a project authorized by the Board of Directors that will take longer than ~~such 450 days~~ 12 months to complete, the period of time necessary to complete such project); provided that a binding commitment or letter of intent shall be treated as a permitted application of the Net Available Cash from the date of such commitment or letter of intent until the 18-month anniversary of the later of the date of such Asset Disposition or Recovery Event and the date of receipt of such Net Available Cash (such 18-month anniversary, the “18-Month Anniversary”) (so long as the Borrower or such Restricted Subsidiary enters into such commitment or letter of intent with the good faith expectation that such Net Available Cash will be applied to satisfy such commitment or letter of intent within such period and such Net Available Cash is actually applied in such manner); provided, further, that in the event such binding commitment or letter of intent is later cancelled or terminated for any reason on or after the 12-month anniversary of the later of the date of such Asset Disposition or Recovery Event, as applicable, and the date of receipt of such Net Available Cash but before such Net Available Cash is so applied, then such Net Available Cash shall constitute Excess Proceeds pursuant to clause (ii) below unless the Borrower or such Restricted Subsidiary enters into another binding commitment (a “Second Commitment”) within six months of such cancellation or termination of the prior binding commitment (but in any event no later than the 18-Month Anniversary); provided, further, that the Borrower or such Restricted Subsidiary may only enter into a Second Commitment under the foregoing provision one time with respect to each Asset Disposition or Recovery Event, and to the extent such Second Commitment is later cancelled or terminated for any reason before such Net Available Cash is applied or such Net Available Cash is not applied within six months of such Second Commitment, then such Net Available Cash shall constitute Excess Proceeds pursuant to clause (ii) below; or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than ~~any such~~ Indebtedness owed to the Borrower or a Restricted Subsidiary) within ~~450 days~~ 12 months after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above~~above (such balance, ~~within~~ the ~~longest~~ “Excess Proceeds”), no later than the latest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent the Borrower or any Restricted Subsidiary is required by the terms thereof) to prepay, repay or purchase other Additional Indebtedness that is Pari Passu Indebtedness on a pro rata basis with the Term ~~Loans~~ Loans, in accordance with subsection ~~3.4(c~~3.4(d) (and subject to subsections ~~3.4(d~~3.4(e) and ~~3.4(e~~3.4(f)) or the agreements or instruments governing such other Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (~~including an amount equal to~~ the amount of ~~any prepayment otherwise contemplated by clause (ii) above in connection with~~ such ~~Asset Disposition or Recovery Event that is declined by any Lender (~~balance, the “Declined Excess Proceeds”)), to fund ~~(to the extent consistent with any other applicable provision of this Agreement)~~ any general corporate ~~purpose~~ purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of ~~any~~ Loans or Subordinated Obligations or the making of any other Restricted ~~Payments~~Payment); provided, however, that (x) in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (b)(i)(y) or (b)(ii), the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased, (y) the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (~~A)(y~~b)(i)(x) above with respect to such Asset ~~Disposition; provided, further, that~~ Disposition and (z) the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I1) 50.0% if the Consolidated ~~Secured~~ Net Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to ~~3.00:1.00~~ 3.25:1.00 after giving pro forma effect to any application of such Net Available Cash as set forth herein and (II2) ~~25.0~~0.0% if the Consolidated ~~Secured~~ Net Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to ~~2.00:1.00~~ 2.75:1.00 after giving pro forma effect to any application of such Net Available Cash as set forth herein (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with ~~this subsection 7.4(b~~clause (b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash ~~or equivalent amount~~ in accordance with this subsection 7.4, (x1) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events ~~or equivalent amount~~ that is not applied in accordance with this subsection 7.4 (excluding all Leverage Excess Proceeds) exceeds $~~50.0~~ 25.0 million in any fiscal year of the Borrower and (y2) in to the ~~case~~ extent that repatriating or transferring any or all of the Net Available Cash from any Asset Disposition by, or Recovery Event relating to any asset of, ~~the Borrower or~~ any Restricted Subsidiary that is not a Subsidiary ~~Guarantor, to the extent that~~ Guarantor (iw) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) could result in ~~the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly~~ adverse tax consequences to the Borrower or any of its Subsidiaries, (x) is prohibited or delayed by applicable local law, (y) could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or ~~shareholders~~ equityholders of the ~~Borrower,~~ Borrower or any Restricted ~~Subsidiary or any Parent~~Subsidiary, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the ~~Borrower~~ Company or any Restricted ~~Subsidiary,~~ Subsidiary or (D) any material risk of any such violation or liability referred to in ~~any of the preceding~~ clauses (A), (B) and (C~~), (E~~) ~~any adverse tax consequence for the Borrower or any Restricted Subsidiary,~~ or (Fz) could reasonably be expected to give rise to or result in any cost, expense, liability or obligation (including any ~~Tax~~tax) other than routine and immaterial out-of-pocket ~~expenses~~expenses (in the case of the foregoing clauses (w), (x), (y) and (z), as determined by the Borrower in good faith, which determination shall be conclusive), the portion of such Net Available Cash so affected will not be required to be applied in compliance with the foregoing provisions of this covenant, and such amounts may be retained by the Borrower or any Restricted Subsidiary or invested in, distributed to or otherwise transferred to any other Subsidiary); provided that in the case of the foregoing clause (2)(y), the Borrower shall take commercially reasonable efforts to and to cause the applicable Restricted Subsidiary to, take all actions reasonably required by the applicable local law, the applicable organizational impediments or other impediment to permit such repatriation or transfer, and if such repatriation or transfer of any of such affected Net Available Cash can be achieved, such repatriation or transfer will be promptly effected and such repatriated or transferred Net Available Cash will be applied (whether or not repatriation or transfer actually occurs) in compliance with the foregoing provisions of this subsection 7.4. The time periods set forth in this subsection 7.4 shall not start until such time as the Net Available Cash may be repatriated or transferred whether or not such repatriation or transfer actually occurs. (d) For the purposes of subsection 7.4(a)(ii)) above, the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 ~~days;~~ days (vto the extent of the cash received), (5) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi6) Additional ~~Assets;~~ Assets and (~~vii~~7) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 75.0 million and ~~4.0~~30% of Consolidated ~~Tangible Assets~~ EBITDA for the Most Recent Four Quarter Period as of the date a legally binding commitment for such Asset Disposition was entered into (with the Fair Market Value of each item of Designated Noncash Consideration being measured on as of the date a legally binding commitment for such Asset Disposition (~~or,~~ or if later, for the payment of such item) was entered into and without giving effect to subsequent changes in value).

Appears in 1 contract

Samples: Credit Agreement (Frontdoor, Inc.)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Borrower, which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), ) an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) ~~the~~ Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by ~~the~~ Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent ~~the~~ Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of ~~the~~ Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by ~~the~~ Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition ~~or Recovery Event, as the case may be,~~ and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than ~~any such~~ Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash;, (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above, within the longest of~~ above (~~1) 10 Business Days of determination of~~ such balance, ~~(2)~~ the ~~time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii~~“Excess Proceeds”)~~, and (3) the time required by applicable law~~, toward the prepayment of the Term Loans and (to the extent the Borrower or any Restricted Subsidiary is required by the terms thereof) to prepay, repay or purchase other Additional Indebtedness on a pro rata basis with the Term ~~Loans~~ Loans, in accordance with subsection ~~3.4(c~~3.4(d) (and subject to subsections ~~3.4(d~~3.4(e) and ~~3.4(e)~~3.4(f) thereof) or the agreements or instruments governing such other Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including without limitation an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any ~~Lender (the “Declined Excess Proceeds”)~~Lender), to fund any general corporate purposes (including but not limited to the repayment of Senior Interim Loans, Senior Notes, Existing Notes or Subordinated Obligations) (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4 (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 ~~(excluding all Leverage Excess Proceeds)~~ exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, ~~the Borrower or~~ any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (~~including~~ including, without limitation, any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii)) above, the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; , (v5) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi6) Additional ~~Assets;~~ Assets and (~~vii~~7) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 125.0 million and ~~4.0~~10.0% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value).

Appears in 1 contract

Samples: Credit Agreement (Servicemaster Co)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such Material Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Borrower, which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such Material Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of the Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by the Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition ~~or Recovery Event, as the case may be,~~ and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above, within the longest of~~ above (~~1) 10 Business Days of determination of~~ such balance, ~~(2)~~ the ~~time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii~~“Excess Proceeds”)~~, and (3) the time required by applicable law~~, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase other Additional Indebtedness on a pro rata basis with the Term Loans in accordance with subsection 3.4(c) (and subject to subsections 3.4(d) and 3.4(e)) or the agreements or instruments governing such other Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including without limitation an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any ~~Lender (the “Declined Excess Proceeds”)~~Lender), to fund (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”)purposes. (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4 (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 ~~(excluding all Leverage Excess Proceeds)~~ exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (~~including~~ including, without limitation, any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i) Temporary Cash Investments and Cash Equivalents; , (ii) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iii) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; , (v) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi) Additional ~~Assets;~~ Assets and (vii) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 150.0 million and 4.0% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value).

Appears in 1 contract

Samples: Term Loan Credit Agreement (Great North Imports, LLC)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any ~~Material~~ Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Borrower, which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration),; (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least 75.0% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, ; and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition (other than the Net Available Cash from the Power Solutions Asset Sale) is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition (other than the Power Solutions Asset Sale) or (y) a Recovery Event shall occur, an amount equal to 100.0% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (A) To the extent that such Net Available Cash is in respect of a Recovery Event or from an Asset Disposition of Collateral, an amount equal to 100.0% of the Net Available Cash from such Recovery Event or such Asset Disposition shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be): (i) first, either (x) to the extent that such Net Available Cash is from an Asset Disposition of, or Recovery Event with respect to, any ABL Priority Collateral, and to the extent that the Borrower or such Restricted Subsidiary elects (or is required by the terms of any Indebtedness under the ABL Facility or any other Indebtedness constituting ABL Obligations), to prepay, repay or purchase any such Indebtedness or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness within 450 days after the later of the date of such Asset Disposition or Recovery Event and the date of receipt of such Net Available Cash, or (y) to the extent that the Borrower or such Restricted Subsidiary elects, to ~~reinvest or commit to reinvest~~ invest in ~~the business of the Borrower and its Restricted Subsidiaries~~ Additional Assets (including ~~any~~ by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to Net Available Cash received by the Borrower or ~~any~~ another Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition or Recovery ~~Event, as the case may be,~~ Event and the date of receipt of such Net Available ~~Cash (~~Cash, or, if such ~~reinvestment~~ investment in Additional Assets is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or Obligations in respect thereof or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness or Obligations in respect thereof (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash;; and (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above, within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant~~ above to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase Additional Indebtedness on a pro rata basis with prepay the Term Loans in accordance with subsection 3.4(c) (~~and~~ subject to subsections 3.4(d) and 3.4(e)) thereof) and (to the extent the Borrower or such Restricted Subsidiary elects, or is required by the terms thereof) to purchase, redeem or repay any Senior First Priority Notes, any Additional Obligations of the Borrower or a Restricted Subsidiary having Pari Passu Lien Priority, or any other Indebtedness having Pari Passu Lien Priority, pursuant to the agreements ~~or instruments~~ governing such ~~Additional~~ other Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any ~~Lender (the “Declined Excess Proceeds”)~~Lender), to fund ~~(to the extent consistent with any other applicable provision of this Agreement)~~ any general corporate ~~purpose~~ purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of any Senior Second Lien Priority Notes, Senior Unsecured Indebtedness, Senior Subordinated ~~Obligations~~ Notes or ~~the making of other Restricted Payments~~Subordinated Obligations); , provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (ii) above, the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (~~or any Restricted Subsidiary, as the case may be~~if any) ~~may elect~~ to ~~invest~~ be permanently reduced in ~~Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice~~ an amount equal to the ~~Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the~~ principal amount so ~~invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided~~prepaid, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than repaid or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) purchased. Notwithstanding the foregoing provisions of this subsection ~~7.4~~7.4(b)(A), the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4(b)(A) (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events subject to this subsection 7.4(b)(A) or equivalent amount that is not applied in accordance with this subsection ~~7.4 (excluding all Leverage Excess Proceeds~~7.4(b)(A) exceeds $~~50.0~~ 75.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any material adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (dB) To the extent that such Net Available Cash is in respect of an Asset Disposition of any assets not constituting Collateral (“Other Assets”), an amount equal to 100.0% of the Net Available Cash from such Asset Disposition shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be): (i) first, either (x) to the extent that the Borrower elects (or is required by the terms of any Credit Facility Indebtedness, any Senior Indebtedness of the Borrower or any Subsidiary Guarantor or any Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness (in each case other than Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash, or (y) to the extent that the Borrower or such Restricted Subsidiary elects, to invest in Additional Assets (including by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to Net Available Cash received by the Borrower or another Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash, or, if such investment in Additional Assets is a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (A) above, to prepay the Term Loans in accordance with subsection 3.4(c) (subject to subsections 3.4(d) and 3.4(e) thereof) and (to the extent the Borrower or such Restricted Subsidiary elects, or is required by the terms thereof) to purchase, redeem or repay any Senior First Lien Priority Notes, any Additional Obligations of the Borrower or a Restricted Subsidiary having Pari Passu Lien Priority, or any other Indebtedness having Pari Passu Lien Priority, pursuant to the agreements governing such other Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition that is declined by any Lender), to fund any general corporate purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of any Senior Second Lien Priority Notes, Senior Unsecured Indebtedness, Senior Subordinated Notes or Subordinated Obligations); provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (ii) above, the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing provisions of this subsection 7.4(b)(B), the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection 7.4(b)(B) (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions subject to this subsection 7.4(b)(B) or equivalent amount that is not applied in accordance with this subsection 7.4(b)(B) exceeds $75.0 million and (y) in the case of any Asset Disposition by the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any material adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (c) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; , (v5) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi6) Additional ~~Assets;~~ Assets and (~~vii~~7) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 125.0 million and ~~4.0~~2.5% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value). (d) For the purposes of subsection 7.4(b)(A) and (B), (i) in the event of any Asset Disposition of Capital Stock of a Person that has any right, title or interest to or in assets constituting both Collateral and Other Assets, such Asset Disposition shall instead be deemed to be an Asset Disposition of such assets, and the Borrower shall allocate the Net Available Cash from such Asset Disposition between the Collateral and the Other Assets in proportion to their respective fair market values as determined by the Borrower in good faith (which determination shall be conclusive), (ii) any Asset Disposition of Capital Stock of any Person that has any right, title or interest to or in assets constituting only Other Assets will be subject to subsection 7.4(b)(B) and not subsection 7.4(b)(A), and (iii) any Asset Disposition of Capital Stock of any Person that has any right, title or interest to or in assets constituting only Collateral will be subject to subsection 7.4(b)(A) and not subsection 7.4(b)(B). .

Appears in 1 contract

Samples: Credit Agreement (Hd Supply, Inc.)

Appears in 1 contract

Samples: Second Lien Credit Agreement (Us LBM Holdings, Inc.)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any ~~Material Restricted~~ Subsidiary to, make ~~any~~ Asset ~~Disposition unless~~Dispositions, except: (i) Asset Dispositions of Eligible Assets in the ordinary course of business or consistent with past practice or industry practice, which are in compliance with the Operating Policies and Practices and for which the consideration in cash at the time of such Asset Disposition is at least equal to the Fair Market Value of the assets subject to such Asset Disposition; (ii) Asset Dispositions of non-Eligible Assets for which the Borrower or such ~~Material Restricted~~ Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the Fair Market Value (as of the ~~shares and assets subject to such Asset Disposition, as such Fair Market Value (~~date on the date a legally binding commitment for such Asset Disposition was entered into) may be determined (and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million) in good faith by the Borrower, which determination shall be conclusive (including as to the value of all noncash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) of ~~$25.0 million~~ the shares, property or more, at least 75.0% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) for assets subject to such Asset Disposition, ~~together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis) received~~ as such Fair Market Value may be determined in good faith by the ~~Borrower or~~ Borrower, whose determination shall be conclusive (including as to the value of all non-cash consideration); provided that no Event of Default shall have occurred and be continuing at the time of entry into a definitive agreement for any such ~~Material Restricted Subsidiary is in the form of cash, and~~Asset Disposition; (iii) Asset Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, if made in good faith determination of the Borrower and/or in the ordinary course of business or consistent with past practice or industry practice, and Asset Dispositions of property no longer used or useful, or economically practicable to maintain, in the conduct of the business of the Borrower and its Subsidiaries if the Borrower determines in its reasonable business judgment that such discontinuance is desirable in the conduct of its business and does not materially interfere with the business of the Borrower and its Subsidiaries, taken as a whole; (iv) Asset Dispositions to the extent ~~required by subsection 7.4(b)~~that (i) such property is exchanged for credit against the purchase price of similar replacement property, or other assets of comparable or greater value or usefulness to the business or (ii) an amount equal to ~~100.0% (as may be adjusted pursuant to the final proviso of this subsection 7.4(b)) of~~ the Net Available Cash ~~from~~ of such Asset Disposition is are promptly applied to the purchase price of such replacement property; provided that no Event of Default shall have occurred and be continuing at the time of entry into a definitive agreement for any such Asset Disposition under this clause (iv); (v) Asset Dispositions in connection with a SPAC Transaction to the extent contemplated by the ~~Borrower~~ definitive documentation relating to such SPAC Transaction or disclosed in the Proxy Statement; (vi) Asset Dispositions of (A) accounts receivable, notes receivable or other current assets in the ordinary course of business or consistent with past practice or industry practice or the conversion of accounts receivable to notes receivable or other dispositions of accounts receivable in connection with the collection or compromise thereof and (B) Permitted Securitization Financing Assets pursuant to any Permitted Securitization Financing; (vii) (x) the unwinding of any Hedging Agreement pursuant to its terms and (y) any disposition or transfer of Excluded Assets (or equivalent assets of a Subsidiary that is not a Loan Party); and (viii) other Asset Dispositions not to exceed $1,250,000 in the aggregate in any ~~Restricted~~ Fiscal Year (which any unused amount for a particular Fiscal Year being eligible for use in any subsequent year); provided that such Asset Dispositions do not have a material adverse impact on the operations of the Borrower or any Subsidiary; provided that no Default or Event of Default shall have occurred and be continuing at the time of any such Asset Disposition, as subject to the ~~case may be~~provisions of subsections 1.2(i) ~~as provided in such subsection~~and 1.2(j). (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) the Borrower or any ~~Restricted~~ Subsidiary shall make an any Asset Disposition that is not permitted pursuant to subsection 7.4(a), or (y) a Recovery Event shall occur, an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery ~~Event~~ Event, in each case, to the extent such Net Available Cash exceeds $100,000 for any individual transaction (or series of related transactions) shall be applied by the Borrower (or any ~~Restricted~~ Subsidiary, as the case may be) as follows: (i) first, ~~(x)~~ with respect to an Asset Disposition or Recovery Event, to the extent the Borrower or such ~~Restricted~~ Subsidiary elects, to reinvest or commit to reinvest in the business of the Borrower and its ~~Restricted~~ Subsidiaries ~~(including any investment in Additional Assets by the Borrower or any Restricted Subsidiary)~~ within ~~450~~ 270 days from the later of the date of such Asset Disposition or Recovery Event or the repair or restoration of the property affected by such Recovery Event~~, as the case may be, and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors~~ ; provided that ~~will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y)~~ in the case of any ~~Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor~~such amounts committed to be reinvested within such initial 270-day period, ~~to the extent that~~ the Borrower or ~~any Restricted~~ such Subsidiary ~~elects (or is required by~~ shall be permitted to invest such committed amounts through the ~~terms of any Indebtedness of any Restricted Subsidiary~~ date that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or Obligations in respect thereof or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness or Obligations in respect thereof (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 180 days after the ~~later of the date~~ completion of such ~~Asset Disposition and the date of receipt of such Net Available Cash~~270-day period; (ii) ~~second,~~ to the extent of the balance of such Net Available Cash after application in accordance with clause (i) above, within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans ~~and (to the extent required by the terms thereof) to prepay, repay or purchase Additional Indebtedness on a pro rata basis with the Term Loans~~ in accordance with the provisions of subsection 3.4(c) ~~(and subject to subsections 3.4(d) and 3.4(e)) or the agreements or instruments governing such Additional Indebtedness; and (iii) third, to the extent~~ within 5 Business Days of receipt of the ~~balance of such~~ Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any Lender (the “Declined Excess Proceeds”)), to fund (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); Cash. provided, however, that the Borrower (or any ~~Restricted~~ Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with ~~clause (A)(y~~subsection 7.4(b)(i) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection 7.4, (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 (excluding all Leverage Excess Proceeds) exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i) Temporary Cash Investments and Cash Equivalents; (ii) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; (iii) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; (iv) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; (v) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; (vi) Additional Assets; and (vii) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $185.0 million and 4.0% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on the date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into and without giving effect to subsequent changes in value).

Appears in 1 contract

Samples: Credit Agreement (Abacus Life, Inc.)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any ~~Material~~ Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Borrower, which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration),; (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least 75.0% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, ; and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition (other than the Net Available Cash from the Power Solutions Asset Sale) is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition (other than the Power Solutions Asset Sale) or (y) a Recovery Event shall occur, an amount equal to 100.0% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (A) To the extent that such Net Available Cash is in respect of a Recovery Event or from an Asset Disposition of Collateral, an amount equal to 100.0% of the Net Available Cash from such Recovery Event or such Asset Disposition shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be): (i) first, either (x) to the extent that such Net Available Cash is from an Asset Disposition of, or Recovery Event with respect to, any ABL Priority Collateral, and to the extent that the Borrower or such Restricted Subsidiary elects (or is required by the terms of any Indebtedness under the ABL Facility or any other Indebtedness constituting ABL Obligations), to prepay, repay or purchase any such Indebtedness or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness within 450 days after the later of the date of such Asset Disposition or Recovery Event and the date of receipt of such Net Available Cash, or (y) to the extent that the Borrower or such Restricted Subsidiary elects, to ~~reinvest or commit to reinvest~~ invest in ~~the business of the Borrower and its Restricted Subsidiaries~~ Additional Assets (including ~~any~~ by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to Net Available Cash received by the Borrower or ~~any~~ another Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition or Recovery ~~Event, as the case may be,~~ Event and the date of receipt of such Net Available ~~Cash (~~Cash, or, if such ~~reinvestment~~ investment in Additional Assets is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or Obligations in respect thereof or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness or Obligations in respect thereof (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above, within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant~~ above to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase Additional Indebtedness on a pro rata basis with prepay the Term Loans in accordance with subsection 3.4(c) (~~and~~ subject to subsections 3.4(d) and 3.4(e)) thereof) and (to the extent the Borrower or such Restricted Subsidiary elects, or is required by the terms thereof) to purchase, redeem or repay any Senior First Priority Notes, any Additional Obligations of the Borrower or a Restricted Subsidiary having Pari Passu Lien Priority, or any other Indebtedness having Pari Passu Lien Priority, pursuant to the agreements ~~or instruments~~ governing such ~~Additional~~ other Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any ~~Lender (the “Declined Excess Proceeds”)~~Lender), to fund ~~(to the extent consistent with any other applicable provision of this Agreement)~~ any general corporate ~~purpose~~ purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of any Senior Second Lien Priority Notes, Senior Unsecured Indebtedness, Senior Subordinated ~~Obligations~~ Notes or ~~the making of other Restricted Payments~~Subordinated Obligations); , provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (ii) above, the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (~~or any Restricted Subsidiary, as the case may be~~if any) ~~may elect~~ to ~~invest~~ be permanently reduced in ~~Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice~~ an amount equal to the ~~Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the~~ principal amount so ~~invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided~~prepaid, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than repaid or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) purchased. Notwithstanding the foregoing provisions of this subsection ~~7.4~~7.4(b)(A), the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4(b)(A) (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events subject to this subsection 7.4(b)(A) or equivalent amount that is not applied in accordance with this subsection ~~7.4 (excluding all Leverage Excess Proceeds~~7.4(b)(A) exceeds $~~50.0~~ 75.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any material adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (dB) To the extent that such Net Available Cash is in respect of an Asset Disposition of any assets not constituting Collateral (“Other Assets”), an amount equal to 100.0% of the Net Available Cash from such Asset Disposition shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be): (i) first, either (x) to the extent that the Borrower elects (or is required by the terms of any Credit Facility Indebtedness, any Senior Indebtedness of the Borrower or any Subsidiary Guarantor or any Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness (in each case other than Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash, or (y) to the extent that the Borrower or such Restricted Subsidiary elects, to invest in Additional Assets (including by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to Net Available Cash received by the Borrower or another Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash, or, if such investment in Additional Assets is a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (A) above, to prepay the Term Loans in accordance with subsection 3.4(c) (subject to subsections 3.4(d) and 3.4(e) thereof) and (to the extent the Borrower or such Restricted Subsidiary elects, or is required by the terms thereof) to purchase, redeem or repay any Senior First Lien Priority Notes, any Additional Obligations of the Borrower or a Restricted Subsidiary having Pari Passu Lien Priority, or any other Indebtedness having Pari Passu Lien Priority, pursuant to the agreements governing such other Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition that is declined by any Lender), to fund any general corporate purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of any Senior Second Lien Priority Notes, Senior Unsecured Indebtedness, Senior Subordinated Notes or Subordinated Obligations); provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (ii) above, the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing provisions of this subsection 7.4(b)(B), the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection 7.4(b)(B) (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions subject to this subsection 7.4(b)(B) or equivalent amount that is not applied in accordance with this subsection 7.4(b)(B) exceeds $75.0 million and (y) in the case of any Asset Disposition by the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any material adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (c) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; , (v5) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi6) Additional ~~Assets;~~ Assets and (~~vii~~7) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 125.0 million and ~~4.0~~2.5% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value). (d) For the purposes of subsection 7.4(b)(A) and (B), (i) in the event of any Asset Disposition of Capital Stock of a Person that has any right, title or interest to or in assets constituting both Collateral and Other Assets, such Asset Disposition shall instead be deemed to be an Asset Disposition of such assets, and the Borrower shall allocate the Net Available Cash from such Asset Disposition between the Collateral and the Other Assets in proportion to their respective fair market values as determined by the Borrower in good faith (which determination shall be conclusive), (ii) any Asset Disposition of Capital Stock of any Person that has any right, title or interest to or in assets constituting only Other Assets will be subject to subsection 7.4(b)(B) and not subsection 7.4(b)(A), and (iii) any Asset Disposition of Capital Stock of any Person that has any right, title or interest to or in assets constituting only Collateral will be subject to subsection 7.4(b)(A) and not subsection 7.4(b)(B).

Appears in 1 contract

Samples: Credit Agreement (Hd Supply, Inc.)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any ~~Material~~ Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Borrower, which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration),; (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least 75.0% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, ; and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to 100.0% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (A) To the extent that such Net Available Cash is in respect of a Recovery Event or from an Asset Disposition of Collateral, an amount equal to 100.0% of the Net Available Cash from such Recovery Event or such Asset Disposition shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be): (i) first, either (x) to the extent that such Net Available Cash is from an Asset Disposition of, or Recovery Event with respect to, any ABL Priority Collateral, and to the extent that the Borrower or such Restricted Subsidiary elects (or is required by the terms of any Indebtedness under the ABL Facility or any other Indebtedness constituting ABL Obligations), to prepay, repay or purchase any such Indebtedness or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness within 450 days after the later of the date of such Asset Disposition or Recovery Event and the date of receipt of such Net Available Cash, or (y) to the extent that the Borrower or such Restricted Subsidiary elects, to ~~reinvest or commit to reinvest~~ invest in ~~the business of the Borrower and its Restricted Subsidiaries~~ Additional Assets (including ~~any~~ by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to Net Available Cash received by the Borrower or ~~any~~ another Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition or Recovery ~~Event, as the case may be,~~ Event and the date of receipt of such Net Available ~~Cash (~~Cash, or, if such ~~reinvestment~~ investment in Additional Assets is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or Obligations in respect thereof or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness or Obligations in respect thereof (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash;; and (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above, within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant~~ above to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase Additional Indebtedness on a pro rata basis with prepay the Term Loans in accordance with subsection 3.4(c) (~~and~~ subject to subsections 3.4(d) and 3.4(e)) thereof) and (to the extent the Borrower or such Restricted Subsidiary elects, or is required by the terms thereof) to purchase, redeem or repay any Senior First Priority Notes, any Additional Obligations of the Borrower or a Restricted Subsidiary having Pari Passu Lien Priority, or any other Indebtedness having Pari Passu Lien Priority, pursuant to the agreements ~~or instruments~~ governing such ~~Additional~~ other Indebtedness~~; and~~; (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any ~~Lender (the “Declined Excess Proceeds”)~~Lender), to fund ~~(to the extent consistent with any other applicable provision of this Agreement)~~ any general corporate ~~purpose~~ purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of any Senior Second Lien Priority Notes, Senior Unsecured Indebtedness, Senior Subordinated ~~Obligations~~ Notes or ~~the making of other Restricted Payments~~Subordinated Obligations); , provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (ii) above, the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (~~or any Restricted Subsidiary, as the case may be~~if any) ~~may elect~~ to ~~invest~~ be permanently reduced in ~~Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice~~ an amount equal to the ~~Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the~~ principal amount so ~~invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided~~prepaid, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than repaid or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) purchased. Notwithstanding the foregoing provisions of this subsection ~~7.4~~7.4(b)(A), the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4(b)(A) (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events subject to this subsection 7.4(b)(A) or equivalent amount that is not applied in accordance with this subsection ~~7.4 (excluding all Leverage Excess Proceeds~~7.4(b)(A) exceeds $~~50.0~~ 75.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any material adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (B) To the extent that such Net Available Cash is in respect of an Asset Disposition of any assets not constituting Collateral (“Other Assets”), an amount equal to 100.0% of the Net Available Cash from such Asset Disposition shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be): (i) first, either (x) to the extent that the Borrower elects (or is required by the terms of any Credit Facility Indebtedness, any Senior Indebtedness of the Borrower or any Subsidiary Guarantor or any Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness (in each case other than Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash, or (y) to the extent that the Borrower or such Restricted Subsidiary elects, to invest in Additional Assets (including by means of an investment in Additional Assets by a Restricted Subsidiary with an amount equal to Net Available Cash received by the Borrower or another Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash, or, if such investment in Additional Assets is a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (A) above, to prepay the Term Loans in accordance with subsection 3.4(c) (subject to subsections 3.4(d) and 3.4(e) thereof) and (to the extent the Borrower or such Restricted Subsidiary elects, or is required by the terms thereof) to purchase, redeem or repay any Senior First Lien Priority Notes, any Additional Obligations of the Borrower or a Restricted Subsidiary having Pari Passu Lien Priority, or any other Indebtedness having Pari Passu Lien Priority, pursuant to the agreements governing such other Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition that is declined by any Lender), to fund any general corporate purposes (including but not limited to the repurchase, repayment or other acquisition or retirement of any Senior Second Lien Priority Notes, Senior Unsecured Indebtedness, Senior Subordinated Notes or Subordinated Obligations); provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (ii) above, the Borrower or such Restricted Subsidiary will retire such Indebtedness and will cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased. (c) Notwithstanding the foregoing provisions of this subsection 7.4(b)(B), the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection 7.4(b)(B) (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions subject to this subsection 7.4(b)(B) or equivalent amount that is not applied in accordance with this subsection 7.4(b)(B) exceeds $75.0 million and (y) in the case of any Asset Disposition by the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any material adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; , (v5) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi6) Additional ~~Assets;~~ Assets and (~~vii~~7) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 125.0 million and ~~4.0~~2.5% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value). (e) For the purposes of subsection 7.4(b)(A) and (B), (i) in the event of any Asset Disposition of Capital Stock of a Person that has any right, title or interest to or in assets constituting both Collateral and Other Assets, such Asset Disposition shall instead be deemed to be an Asset Disposition of such assets, and the Borrower shall allocate the Net Available Cash from such Asset Disposition between the Collateral and the Other Assets in proportion to their respective fair market values as determined by the Borrower in good faith (which determination shall be conclusive), (ii) any Asset Disposition of Capital Stock of any Person that has any right, title or interest to or in assets constituting only Other Assets will be subject to subsection 7.4(b)(B) and not subsection 7.4(b)(A), and (iii) any Asset Disposition of Capital Stock of any Person that has any right, title or interest to or in assets constituting only Collateral will be subject to subsection 7.4(b)(A) and not subsection 7.4(b)(B).

Appears in 1 contract

Samples: Credit Agreement (Hd Supply, Inc.)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such ~~Material~~ Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value may be determined in good faith by the Borrower (and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $~~25.0~~ 150.0 million) , in good faith by the ~~Borrower~~Board of Directors), ~~which~~ whose determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value~~ fair market value (on as determined in good faith by the ~~date a legally binding commitment for such Asset Disposition was entered into~~Borrower) of $25.0 million or more, at least 75.0% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such ~~Material~~ Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to 100.0% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of the Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by the Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition ~~or Recovery Event, as the case may be,~~ and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above, within the longest of~~ above (~~1) 10 Business Days of determination of~~ such balance, ~~(2)~~ the ~~time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii~~“Excess Proceeds”)~~, and (3) the time required by applicable law~~, toward the prepayment of the Term Loans and (to the extent the Borrower or any Restricted Subsidiary is required by the terms thereof) to prepay, repay or purchase other Permitted Additional Indebtedness on a pro rata basis with the Term ~~Loans~~ Loans, in accordance with subsection 3.4(c) (and subject to subsections 3.4(d) and 3.4(e)) thereof) or the agreements or instruments governing such other Permitted Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any ~~Lender (the “Declined Excess Proceeds”)~~Lender), to fund any general corporate purposes (including but not limited to the repayment of Senior Notes, Senior Subordinated Notes or Subordinated Obligations) (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4 (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 ~~(excluding all Leverage Excess Proceeds)~~ exceeds $~~50.0~~ 75.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any material adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i1) Temporary Cash Investments and Cash Equivalents; , (ii2) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (~~iii~~3) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv4) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; , (v5) consideration consisting of Indebtedness of the Borrower or any Restricted ~~Subsidiary; (vi) Additional Assets;~~ Subsidiary and (~~vii~~6) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 125.0 million and ~~4.0~~2.5% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value).

Appears in 1 contract

Samples: Credit Agreement (HSI IP, Inc.)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such Material Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the ~~Fair Market Value~~ fair market value of the shares and assets subject to such Asset Disposition, as such ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may~~ fair market value shall be determined ~~(and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million)~~ in good faith by the Borrower, which determination shall be conclusive (including as to the value of all ~~noncash~~ non-cash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a ~~Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into)~~ fair market value of $25.0 million or more, at least ~~75.0~~75% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) ~~for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis)~~ received by the Borrower or such Material Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the ~~Restatement Effective~~ Closing Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition or (y) a Recovery Event shall occur, an amount equal to ~~100.0~~100% ~~(as may be adjusted pursuant to the final proviso of this subsection 7.4(b))~~ of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of the Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by the Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition ~~or Recovery Event, as the case may be,~~ and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or ~~Obligations in respect thereof or~~ (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness ~~or Obligations in respect thereof~~ (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) ~~above~~above (such balance, the “Excess Proceeds”), within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase other Additional Indebtedness on a pro rata basis with the Term Loans in accordance with subsection 3.4(c) (and subject to subsections 3.4(d) and 3.4(e)) or the agreements or instruments governing such other Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including without limitation an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any ~~Lender (the “Declined Excess Proceeds”)~~Lender), to fund (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”)purposes. (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection ~~7.4,~~ 7.4 (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 ~~(excluding all Leverage Excess Proceeds)~~ exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (~~including~~ including, without limitation, any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i) Temporary Cash Investments and Cash Equivalents; , (ii) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iii) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; , (iv) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; , (v) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; , (vi) Additional ~~Assets;~~ Assets and (vii) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 150.0165.0 million and 4.0% of Consolidated Tangible Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured on at the ~~date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into~~ time received and without giving effect to subsequent changes in value).

Appears in 1 contract

Samples: Credit Agreement (Great North Imports, LLC)

Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events. (a) The Borrower will not, and will not permit any Material Restricted Subsidiary to, make any Asset Disposition unless: (i) the Borrower or such Material Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the Fair Market Value of the shares and assets subject to such Asset Disposition, as such Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) may be determined (and shall be determined, to the extent such Asset Disposition or any series of related Asset Dispositions involves aggregate consideration in excess of $25.0 million) in good faith by the Borrower, which determination shall be conclusive (including as to the value of all noncash consideration), (ii) in the case of any Asset Disposition (or series of related Asset Dispositions) having a Fair Market Value (on the date a legally binding commitment for such Asset Disposition was entered into) of $25.0 million or more, at least 75.0% of the consideration therefor (excluding, in the case of an Asset Disposition (or series of related Asset Dispositions), any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, that are not Indebtedness) for such Asset Disposition, together with all other Asset Dispositions since the Restatement Effective Date (on a cumulative basis) received by the Borrower or such Material Restricted Subsidiary is in the form of cash, and (iii) to the extent required by subsection 7.4(b), an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of this subsection 7.4(b)) of the Net Available Cash from such Asset Disposition is applied by the Borrower (or any Restricted Subsidiary, as the case may be) as provided in such subsection. (b) In the event that on or after the Restatement Effective Date, (x) the Borrower or any Restricted Subsidiary shall make an Asset Disposition (other than an Asset Disposition consisting of the sale of all or a portion of the Chef’Store business owned by Holding and its Subsidiaries) or (y) a Recovery Event shall occur, an amount equal to 100.0% (as may be adjusted pursuant to the final proviso of this subsection 7.4(b)) of the Net Available Cash from such Asset Disposition or Recovery Event shall be applied by the Borrower (or any Restricted Subsidiary, as the case may be) as follows: (i) first, (x) to the extent the Borrower or such Restricted Subsidiary elects, to reinvest or commit to reinvest in the business of the Borrower and its Restricted Subsidiaries (including any investment in Additional Assets by the Borrower or any Restricted Subsidiary) within 450 days from the later of the date of such Asset Disposition or Recovery Event, as the case may be, and the date of receipt of such Net Available Cash (or, if such reinvestment is in a project authorized by the Board of Directors that will take longer than such 450 days to complete, the period of time necessary to complete such project) or (y) in the case of any Asset Disposition by any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that the Borrower or any Restricted Subsidiary elects (or is required by the terms of any Indebtedness of any Restricted Subsidiary that is not a Subsidiary Guarantor), to prepay, repay or purchase any such Indebtedness or Obligations in respect thereof or (in the case of letters of credit, bankers’ acceptances or other similar instruments) cash collateralize any such Indebtedness or Obligations in respect thereof (in each case other than any such Indebtedness owed to the Borrower or a Restricted Subsidiary) within 450 days after the later of the date of such Asset Disposition and the date of receipt of such Net Available Cash; (ii) second, to the extent of the balance of such Net Available Cash after application in accordance with clause (i) above, within the longest of (1) 10 Business Days of determination of such balance, (2) the time required under any other Indebtedness prepaid, repaid or purchased pursuant to this clause (ii), and (3) the time required by applicable law, toward the prepayment of the Term Loans and (to the extent required by the terms thereof) to prepay, repay or purchase Additional Indebtedness on a pro rata basis with the Term Loans in accordance with subsection 3.4(c) (and subject to subsections 3.4(d) and 3.4(e)) or the agreements or instruments governing such Additional Indebtedness; and (iii) third, to the extent of the balance of such Net Available Cash after application in accordance with clauses (i) and (ii) above (including an amount equal to the amount of any prepayment otherwise contemplated by clause (ii) above in connection with such Asset Disposition or Recovery Event that is declined by any Lender (the “Declined Excess Proceeds”)), to fund (to the extent consistent with any other applicable provision of this Agreement) any general corporate purpose (including but not limited to the repurchase, repayment or other acquisition or retirement of any Subordinated Obligations or the making of other Restricted Payments); provided, however, that the Borrower (or any Restricted Subsidiary, as the case may be) may elect to invest in Additional Assets prior to receiving the Net Available Cash attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Administrative Agent of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (A)(y) above with respect to such Asset Disposition; provided, further, that the percentage first set forth above in this subsection 7.4(b) shall be reduced to (I) 50.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 3.00:1.00 and (II) 25.0% if the Consolidated Secured Leverage Ratio at the time of such Asset Disposition (or, at the Borrower’s option, on the date a legally binding commitment for such Asset Disposition was entered into) is less than or equal to 2.00:1.00 (any Net Available Cash in respect of Asset Dispositions not required to be applied in accordance with this subsection 7.4(b) as a result of the application of this proviso shall collectively constitute “Leverage Excess Proceeds”). (c) Notwithstanding the foregoing provisions of this subsection 7.4, the Borrower and its Restricted Subsidiaries shall not be required to apply any Net Available Cash or equivalent amount in accordance with this subsection 7.4, (x) except to the extent that the aggregate Net Available Cash from all Asset Dispositions and Recovery Events or equivalent amount that is not applied in accordance with this subsection 7.4 (excluding all Leverage Excess Proceeds) exceeds $50.0 million and (y) in the case of any Asset Disposition by, or Recovery Event relating to any asset of, the Borrower or any Restricted Subsidiary that is not a Subsidiary Guarantor, to the extent that (i) any Net Available Cash from such Asset Disposition or Recovery Event is subject to any restriction on the transfer of all or any portion thereof directly or indirectly to the Borrower, including by reason of applicable law or agreement (other than any agreement entered into primarily for the purpose of imposing such a restriction) or (ii) in the good faith determination of the Borrower (which determination shall be conclusive) the transfer of all or any portion of any Net Available Cash from such Asset Disposition directly or indirectly to the Borrower could reasonably be expected to give rise to or result in (A) any violation of applicable law, (B) any liability (criminal, civil, administrative or other) for any of the officers, directors or shareholders of the Borrower, any Restricted Subsidiary or any Parent, (C) any violation of the provisions of any joint venture or other material agreement governing or binding upon the Borrower or any Restricted Subsidiary, (D) any material risk of any such violation or liability referred to in any of the preceding clauses (A), (B) and (C), (E) any adverse tax consequence for the Borrower or any Restricted Subsidiary, or (F) any cost, expense, liability or obligation (including any Tax) other than routine and immaterial out-of-pocket expenses. (d) For the purposes of subsection 7.4(a)(ii), the following are deemed to be cash: (i) Temporary Cash Investments and Cash Equivalents; (ii) the assumption of Indebtedness of the Borrower (other than Disqualified Stock of the Borrower) or any Restricted Subsidiary and the release of the Borrower or such Restricted Subsidiary from all liability on payment of the principal amount of such Indebtedness in connection with such Asset Disposition; (iii) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; (iv) securities received by the Borrower or any Restricted Subsidiary from the transferee that are converted by the Borrower or such Restricted Subsidiary into cash within 180 days; (v) consideration consisting of Indebtedness of the Borrower or any Restricted Subsidiary; (vi) Additional Assets; and (vii) any Designated Noncash Consideration received by the Borrower or any of its Restricted Subsidiaries in an Asset Disposition having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause, not to exceed an aggregate amount at any time outstanding equal to the greater of $~~185.0~~ 185.0385.0 million and ~~4.0~~4.017.5% of Consolidated Tangible ~~Assets~~ AssetsEBITDA (with the Fair Market Value of each item of Designated Noncash Consideration being measured on the date a legally binding commitment for such Asset Disposition (or, if later, for the payment of such item) was entered into and without giving effect to subsequent changes in value).

Appears in 1 contract

Samples: Credit Agreement (US Foods Holding Corp.)

Common use of Limitation on Asset Dispositions; Proceeds from Asset Dispositions and Recovery Events Clause in Contracts