Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any Asset Sale unless: (1) the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and (2) at least 75.0% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of: (A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor; (B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and (C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents. (b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows: (1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company); (2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary; (3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid; (4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; (5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or (6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period. (c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs). (d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable. (e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 2 contracts
Samples: Indenture (Maxar Technologies Inc.), Indenture (Maxar Technologies Inc.)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such (as determined in good faith by the Company’s senior management or, in the case of an Asset Sale; andSale in excess of $25.0 million, the Board of Directors of the Company);
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of (x) cash or Cash Equivalents; provided, however, to the extent that the (y) properties and assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt owned by the Company or any of its Restricted Subsidiaries and used in a Permitted Business, or (z) Capital Stock in one or more Persons engaged in a Permitted Business that are or thereby become Restricted Subsidiary thereof. For purposes Subsidiaries of this clause (2) the Company, and, in each case, such consideration is received at the time of such disposition; provided, further, however, that the amount of:
of (Aa) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
and (Bb) any securities, notes or other obligations or other assets or property securities received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 90 days after such Asset Sale (to the extent of the cash or Cash Equivalents received), in each case within 180 days following actually so converted) shall be deemed to be cash or Cash Equivalents actually so converted for the receipt thereofpurposes of this provision only; and
(Ciii) any Designated Noncash Consideration received by upon the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt consummation of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale within 365 days of receipt thereof to (or any portion thereofA) as follows:
make an Investment (1i) if in properties and assets that replace the properties and assets that were the subject of such Net Cash Proceeds are from an Asset Sale or (ii) in properties and assets that is not will be used by the Issuer or a disposition of CollateralRestricted Subsidiary in a Permitted Business (clauses (i) and (ii) collectively referred to as “Replacement Assets”), to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (xB) repay Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of Issuer and the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments Subsidiaries under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility Credit Agreement (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of Indebtedness under the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition Credit Agreement is in the form of the acquisition of Capital Stock comprised of a Personrevolving credit facility or arrangement, such investment, purchase or acquisition results simultaneously effect a permanent reduction of commitments thereunder in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied repayment) or (net C) a combination of additional taxes that would be payable (A) and (B) of this clause (iii). On the 366th day after such Asset Sale or reserved against such earlier date, if any, as a result the Board of repatriating Directors of the Company or of such amounts) in compliance with this covenant. The time periods set forth in this covenant shall Restricted Subsidiary determines not start until such time as to apply the Net Cash Proceeds may be repatriated relating to such Asset Sale as set forth in clause (whether or not iii) of the immediately preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested as provided and within the time period set forth in Section 4.10(bbefore such Net Proceeds Offer Trigger Date (each a “Net Proceeds Offer Amount”) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase such from the Holders of the Securities, and, if required by the terms of any Other Pari Passu Indebtedness with Obligations, from the proceeds from any Asset Saleholders of such Other Pari Passu Obligations (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, to purchase the maximum principal on a pro rata basis, an amount of Notes Securities and any such Other Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount Obligations equal to 100.0the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes Securities and Other Pari Passu Indebtedness Obligations to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, to the date of purchase. If at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with such Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder as of the date of such conversion or disposition and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.18. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $25.0 million (the “Net Proceeds Trigger”) resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $25.0 million, shall be applied as required pursuant to the second preceding paragraph of this Section 4.18). Notice of each Net Proceeds Offer pursuant to this Section 4.18 shall be mailed or caused to be mailed, by first class mail, by the Company within 25 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be provided required by law. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that Holders may elect to have their Securities purchased by the terms Company either in whole or in part (subject to proration as hereinafter described in the event the Net Proceeds Offer is oversubscribed) in denominations of such Indebtedness$2,000 or in integral multiples of $1,000 of principal amount, at the applicable purchase price;
(2) that the Net Proceeds Offer is being made pursuant to this Section 4.18 and that all Securities tendered will be accepted for payment; provided, however, that if the principal amount of Securities or Other Pari Passu Obligations tendered in the Net Proceeds Offer exceeds the aggregate amount of the Net Proceeds Offer Amount, the Company shall select the Securities or Other Pari Passu Obligations to be purchased on a pro rata basis (based on amounts tendered);
(3) the purchase price (including the amount of accrued interest, if any) and the Net Proceeds Offer Payment Date (which shall be no earlier than 30 days nor later than 60 days from the Net Proceeds Offer Trigger Date, other than as may be required by applicable law);
(4) that any Security not tendered will continue to accrue interest;
(5) that, unless the Company defaults in accordance making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(6) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the procedures form entitled “Option of Holder to Elect Purchase” on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Net Proceeds Offer Payment Date;
(7) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security, the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Security purchased; and
(8) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers’ Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the purchase price, plus accrued interest, if any, thereon, set forth in the notice of such Net Proceeds Offer. Any Security not so accepted shall be promptly mailed by the Company to the Holder thereof. For purposes of this Indenture or Section 4.18, the agreements governing Trustee shall act as the Pari Passu Indebtedness, as applicable.
(e) Paying Agent. Any amounts remaining after the purchase of Securities pursuant to a Net Proceeds Offer shall be returned by the Trustee to the Company. To the extent that the aggregate amount of Notes the Securities and Other Pari Passu Indebtedness so properly Obligations tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess such excess Net Proceeds Offer Amount for general corporate purposes or for any purpose other purposes not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.18, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.18 by virtue thereof. The provisions of this Section 4.18 and other provisions contained in this Indenture relating to the Company’s obligation to make a Net Proceeds Offer may be waived or modified with the written consent of the Holders of a majority in principal amount of the Securities.
Appears in 2 contracts
Samples: Indenture (Clean Harbors Inc), Indenture (Clean Harbors Inc)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company (or any of its Restricted Subsidiaries, as the case may be, receives ) receive consideration at the time of the Asset Sale at least equal to the Fair Market Value (measured as determined at of the time date of contractually agreeing the definitive agreement with respect to such Asset Sale) of the Capital Stock, assets or property Capital Stock issued or sold or otherwise disposed of pursuant to such Asset Saleof; and
(2ii) at least 75.075% of the consideration from such received in the Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, its Subsidiaries is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) provision, each of the amount offollowing will be deemed to be cash consideration:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companyfootnotes thereto) of the Company or any Restricted such Subsidiary (other than liabilities that are by their terms contractually subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or (1) that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and for which the Company or such Restricted Subsidiary, as the case may be, from has been released or indemnified against further liability therefor;or (2) in respect of which neither the Company nor any Subsidiary following such Asset Sale has any obligation; and
(B) the amount of any securities, securities or notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are within 180 days repaid, converted by the Company into or such Restricted Subsidiary into cash sold or Cash Equivalents, or by their terms are required to be satisfied otherwise disposed of for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or If at any Restricted Subsidiary’s receipt of the Net Cash Proceeds of time any Asset Sale, non-cash consideration received by the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from Subsidiaries in connection with an Asset Sale that is not a disposition of Collateralrepaid, to repay, prepay, defease, redeem, reduce, purchase converted into or sold or otherwise retire (and disposed of for cash or Cash Equivalents, then the date of such repayment, conversion, sale or other disposition shall be deemed to correspondingly reduce commitments with respect thereto in constitute the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case date of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company hereunder and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (Net Proceeds thereof shall be applied in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 2 contracts
Samples: First Supplemental Indenture and Amendment to Security and Pledge Agreement (UpHealth, Inc.), Indenture (UpHealth, Inc.)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiaries, as the case may be, applicable Subsidiary receives consideration at the time of such Asset Sale (the "Asset Sale Closing Date") at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant or issued (as determined in good faith by the Board of Directors of the Company or, with respect to such Asset Sale; and
(2assets having a Fair Market Value in excess of $5 million, an Independent Financial Advisor) and at least 75.090% of the fair market value (as so determined) of the consideration from such Asset Sale so received by the Company or such Restricted Subsidiary, as the case may be, Subsidiary is in the form of cash or Cash Equivalentscash; provided, however, to the extent that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities of the Company or its Subsidiaries (other than liabilities owed to the Company, any of its Subsidiaries or any of their Affiliates) that are assumed by the transferee in any such transaction (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent sheet) pursuant to the date of such balance sheet, such liabilities a customary novation agreement that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of irrevocably releases the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, and its Subsidiaries from further liability therefor;
and (B) any securities, notes or other obligations or other assets or property Cash Equivalents received by the Company or any Restricted Subsidiary from such transferee that are immediately converted by the Company or such Restricted Subsidiary into cash shall both be deemed to be cash for purposes of this Section 4.18; and (ii) the Net Cash Proceeds received by the Company or such Subsidiary from such Asset Sale are applied in compliance with Section 4.18(b) hereof.
(i) If the Company or any of its Subsidiaries engages in an Asset Sale, the Company or such Subsidiary shall apply the Net Cash EquivalentsProceeds thereof in the following order:
(A) first, toward the payment of the Indebtedness (other than Indebtedness under the Senior Secured Credit Facility or the Senior Subordinated Notes) which is senior in right of payment to the payment of the Senior Subordinated Notes; and
(B) second, toward the payment of the Indebtedness under the Senior Secured Credit Facility; provided, however, that any such payment shall result in a permanent reduction of the Lender's commitment thereunder and a corresponding permanent reduction in the maximum amount of Indebtedness permitted under Section 4.13(b)(i).
(ii) All Net Cash Proceeds not applied pursuant to Section 4.18(b)(i) ("Excess Proceeds") shall be delivered to the Trustee not later than 90 days after the applicable Asset Sale Closing Date (or 30 days after such later date it is first deemed to be an Asset Sale), and shall be applied to the purchase of Senior Subordinated Notes pursuant to a Net Proceeds Purchase as set forth below. To the extent that any such Excess Proceeds remain after the application of the Net Cash Proceeds described in Section 4.18(b)(i), the Company shall purchase Senior Subordinated Notes as described in Section 4.18(c) (a "Net Proceeds Purchase") at a price equal to 101% of the aggregate principal amount thereof, plus accrued interest to the date of purchase, which shall in the aggregate equal the amount of Excess Proceeds required by this Section 4.18 to be made available to purchase Senior Subordinated Notes in a Net Proceeds Purchase.
(c) Notice of a Net Proceeds Purchase pursuant to this Section 4.18 shall be mailed, by first class mail, by the Company not more than 91 days after the relevant Asset Sale Closing Date to all Holders at their last registered addresses, with a copy to the Trustee. The notice shall specify a Redemption Date chosen by the Company in compliance with the first sentence of Section 3.03 and shall contain all instructions and materials necessary to enable such Holders to tender Senior Subordinated Notes pursuant to the Net Proceeds Purchase and shall state the terms are required to be satisfied for cash stated in a notice of redemption under Section 3.03. On or Cash Equivalents before the Redemption Date, the Company shall have deposited with the Paying Agent (to the extent not already held by the Paying Agent) U.S. Legal Tender equal to the Excess Proceeds of the cash Asset Sale. Following the Redemption Date, the Paying Agent shall promptly mail to the Holders of Senior Subordinated Notes payment in an amount equal to the purchase price. The Company will publicly announce the results of the Net Proceeds Purchase on or Cash Equivalents received)as soon as practicable after the Redemption Date. For purposes of this Section 4.18, the Trustee shall act as the Paying Agent. Notwithstanding the foregoing, the Company need not initiate a purchase offer under this Section 4.18 if the amount on deposit with the Trustee is less than $1,000,000, but shall instead hold such lesser amount in each case within 180 days following trust in an interest bearing account until the receipt thereof; andearlier of the next Redemption Date under this Section 4.18 or the date upon which the Senior Subordinated Notes become due and payable. The Company, however, may not credit any such amounts held by the Trustee against any other provision of this Indenture.
(Cd) If at any Designated Noncash Consideration time any non-cash consideration received by the Company or any of its Restricted Subsidiaries Subsidiary in such connection with any Asset Sale having an aggregate Fair Market Valueis converted into or sold or otherwise disposed of for cash, taken together or if cash dividends or interest or other cash payments are received with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstandingrespect thereto, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of then such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); cash shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the constitute Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) purposes of this Section 4.10(b) if covenant and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to shall be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such 4.18(b) as if received in an Asset Sale Offer, occurring on the amount of Excess Proceeds shall be reset at zerodate any such cash is received.
Appears in 2 contracts
Samples: Indenture (Trism Inc /De/), Indenture (Trism Inc /De/)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company (or any of its the Restricted SubsidiariesSubsidiary, as the case may be, ) receives consideration (including by way of relief from, or any Person assuming responsibilities for, any liabilities, contingent or otherwise) at the time of the Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property Equity Interests issued or sold or otherwise disposed of pursuant to such Asset Saleof; and
(2) at least 75.075% of the aggregate consideration from such Asset Sale received by the Company or such and its Restricted Subsidiary, as Subsidiaries in the case may be, Asset Sale is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) provision, each of the amount offollowing will be deemed to be cash:
(Aa) any liabilities (liabilities, as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated in right of payment to the NotesNotes or any Subsidiary Guarantee) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, assets pursuant to an a customary novation agreement that releases or indemnifies the Company or such Subsidiary from further liability;
(b) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are, within 180 days after the Asset Sale, converted by the Company or such Subsidiary into cash, to the extent of the cash received in that conversion; and
(c) accounts receivable of a business retained by the company or any of its Restricted Subsidiaries, as the case may be, following the sale of such business, provided that such accounts receivable (i) are not past due more than 90 days and (ii) do not have a payment date greater than 120 days from the date of the invoices creating such accounts receivable. Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company (or the applicable Restricted Subsidiary, as the case may be) may apply those Net Proceeds at its option to any combination of the following:
(I) to prepay, from further liability thereforrepay, redeem or repurchase Senior Debt;
(BII) any securities, notes to invest in or other obligations acquire Additional Assets; or
(III) to make capital expenditures in respect of the Company’s or other assets its Restricted Subsidiaries’ Oil and Gas Business. The requirement of clause (II) or property received by (III) of the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required preceding paragraph shall be deemed to be satisfied for cash if a bona fide binding contract committing to make the investment, acquisition or Cash Equivalents (expenditure referred to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received therein is entered into by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (Person other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company within the time period specified in the preceding paragraph and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases Net Proceeds are at or above 100.0% of the principal amount thereof), or (iii) making an offer (subsequently applied in accordance with such contract within six months following the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with date such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition agreement is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantinto. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its or any Restricted Subsidiaries Subsidiary of the Company may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such the Net Cash Proceeds in any manner that is not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale Sales that is are not applied or invested as provided and within in the time period set forth in Section 4.10(b) preceding paragraph will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to .” On the 366th day after an Asset Sale Offer made (or, at the Company’s option, any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When earlier date), if the aggregate amount of Excess Proceeds then exceeds $50.0 20.0 million, the Company will be required to make an offer (“Asset Sale Offer”) Offer to all Holders of Notes andNotes, to the extent required by the terms of other Pari Passu Indebtedness, and to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Salethen outstanding, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an . The offer price in cash in an amount any Asset Sale Offer will be equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessand Additional Interest, if any, as may thereon to the Settlement Date, subject to the right of Holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the Settlement Date, and will be provided by the terms payable in cash. If any Excess Proceeds remain after consummation of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess ProceedsOffer, the Company may use any remaining those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, selection of the Trustee will select the Notes for purchase will and such Pari Passu Indebtedness to be made purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company Trustee so that only Notes in accordance with Section 3.04(fdenominations of $2,000, or integral multiples of $1,000 in excess of $2,000, shall be purchased). Upon completion surrender of such Asset Sale Offera Note that is repurchased in part, the Issuers shall issue in the name of the applicable Holder and the Trustee shall authenticate for such Holder at the expense of the Issuers a new Note equal in principal amount to the non-repurchased portion of Excess Proceeds shall be reset at zero.the Note
Appears in 2 contracts
Samples: Indenture (Linn Energy, LLC), Indenture (Linn Energy, LLC)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, consummate make any Asset Sale unlessunless the following conditions are met:
(1a) the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration Asset Sale is for at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset SaleValue; and
(2b) at least 75.075% of the consideration from such Asset Sale received by the Company or such its Restricted Subsidiary, as the case may be, is in the form Subsidiaries consists of cash or Cash Equivalents; provided, however, to the extent provided that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For for purposes of this clause (2) ), each of the amount offollowing shall be considered cash or Cash Equivalents:
(Ai) any the assumption by the purchaser of Debt or other obligations or liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred footnotes thereto) (other than Subordinated Debt or accrued subsequent other obligations or liabilities subordinated in right of payment to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the CompanyNotes) of the Company or any a Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases operation of law or indemnifies a customary novation agreement,
(ii) Additional Assets,
(iii) instruments, notes, securities or other obligations received by the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee the purchaser that are promptly, but in any event within 90 days of the closing, converted by the Company or such Restricted Subsidiary into to cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents actually so received), in each case within 180 days following the receipt thereof; and
(Civ) any Designated Noncash Non-Cash Consideration received by the Company or any of its such Restricted Subsidiaries Subsidiary in such the Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Non-Cash Consideration received pursuant to this subclause clause (Cd) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at (x) $10.0 million per fiscal year and (y) $30.0 million in the time of aggregate since the receipt of such Designated Noncash Consideration Issue Date (with the Fair Market Value of each item of Designated Noncash Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.;
(bc) Within 365 360 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of CollateralSale, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated used:
(whether i) to permanently repay (A) Debt outstanding under the Credit Agreement (and, in the case of the repayment of the revolving credit facility under the Credit Agreement, to permanently reduce the commitment thereunder by such amount) or (B) the Notes and any Debt secured by Liens ranking pari passu with the Liens securing the Notes (if any) through making the Offer to Purchase below,
(ii) to acquire Additional Assets; or
(iii) to make capital expenditures in a Permitted Business of the Company or one or more Restricted Subsidiaries; provided that a binding commitment to make an acquisition referred to in clause (ii) or (iii) above shall be treated as a permitted application of the Net Cash Proceeds from the date of such commitment; provided that (x) such investment is consummated within 180 days of the end of the 360-day period referred to in the first sentence of this paragraph and (y) if such acquisition is not consummated within the period set forth in clause (x) or such repatriation actually occursbinding commitment is terminated, the Net Cash Proceeds not so applied will be deemed to be Excess Proceeds (as defined below). For the avoidance of doubt, pending application thereof in accordance with this Section 4.09, the Company or any Restricted Subsidiary may use any Net Cash Proceeds from an Asset Sale for general corporate purposes (including a reduction in borrowings under any revolving credit facility) prior to the end of the 360-day period referred to in the first sentence of this Section 4.09(c).
(d) Pending When the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is Sales not applied or invested as provided pursuant to (and within the time period frame set forth in in) Section 4.10(b4.09(c) will be deemed to constitute exceeds $25.0 million (“Excess Proceeds”; provided), that any the Issuers must, within 30 days, make an offer to purchase, in accordance with Section 3.02, Notes having a principal amount equal to:
(i) accumulated Excess Proceeds, multiplied by
(ii) a fraction (x) the numerator of which is equal to the outstanding aggregate principal amount of proceeds offered the Notes and (y) the denominator of which is equal to Holders the outstanding aggregate principal amount of the Notes and all Debt secured by Liens on the Collateral ranking pari passu with the Liens on the Collateral securing the Notes similarly required to be repaid, redeemed or tendered for in connection with the Asset Sale, rounded down to the nearest $1,000. The purchase price for the Notes will be 100% of the principal amount plus accrued interest to, but excluding the date of purchase. If the Offer to Purchase is for less than all of the outstanding Notes and Notes in an aggregate principal amount in excess of the purchase amount are tendered and not withdrawn pursuant to clause the offer, the Issuers shall purchase Notes having an aggregate principal amount equal to the purchase amount on a pro rata basis to the extent practicable, with adjustments by the Company so that only Notes in multiples of $1,000 principal amount (3and in a minimum amount of $1,000) will be purchased (or if a PIK Payment has been made, in denominations of Section 4.10(b) $1.00 and any integral multiple of $1.00 in excess thereof with respect to a PIK Note or the portion of a Global Note constituting PIK Interest). Upon completion of the Offer to Purchase, Excess Proceeds will be reset at zero, and any Excess Proceeds remaining after consummation of the Offer to Purchase may be used for any purpose not otherwise prohibited by this Indenture. The Issuers shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of the Notes pursuant to an Asset Sale Offer made at to Purchase pursuant to this Section 4.09. To the extent that the provisions of any time after securities laws or regulations conflict with Section 4.09 or Section 3.02, the Asset Sale Issuers shall be deemed to have been applied as required comply with the applicable securities laws and regulations and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted have breached their obligations under this Section 4.09 or Section 3.02 by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms virtue of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicableconflict.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 2 contracts
Samples: Indenture (Foresight Energy LP), Indenture (Foresight Energy LP)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any make an Asset Sale unless:
(1) the Company or any of its such Restricted Subsidiaries, as the case may be, Subsidiary receives consideration at the time of the Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stockshares, property or assets or property sold or otherwise being disposed of pursuant to such in the Asset Sale; and
(2) except in the case of a Permitted Asset Swap, at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, from the Asset Sale is in the form of cash or Cash Equivalents; provided, however, to . Within one year from the extent that the assets sold in such receipt of Net Available Cash from an Asset Sale were part of the CollateralSale, the assets received Company may, at its election or as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company terms of any Credit Facility, use such Net Available Cash to:
(i) acquire Additional Assets;
(ii) make capital expenditures used or useful in a Restricted Subsidiary thereof. For purposes of this clause Related Business; and/or
(2iii) the amount ofprepay, repay or purchase:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orSecured Debt, if incurred or accrued subsequent to the date of such balance sheetincluding, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination without limitation, Secured Debt under either of the Company) of the Company U.S. Credit Facilities or under any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire Credit Facility (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Companythereto);
(2B) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire other Debt (other than Subordinated Debt) (and to correspondingly reduce commitments with respect thereto in thereto); provided that, to the case of revolving borrowings) Indebtedness of extent the Company reduces such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repayDebt, prepay, defease, redeem, reduce, purchase or otherwise retire (the Company shall equally and to correspondingly ratably reduce commitments with respect thereto in the case of revolving borrowings other than commitments obligations under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Article 3 of this Indenture and Section 3.015 of the Notes, (ii) purchasing Notes through open open-market purchases (to the extent such purchases are at or above 100.0100% of the principal amount thereof), ) or (iii) by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6C) any combination Debt of a Restricted Subsidiary of the foregoingCompany that is not a Guarantor, provided, that other than Debt owed to the Company and its or an Affiliate of the Company; provided that if during such one-year period the Company or such Restricted Subsidiaries will be deemed Subsidiary enters into a definitive binding agreement committing it to have complied apply such Net Available Cash in accordance with the provisions described in requirements of the preceding clause (4i) or (5ii) of this Section 4.10(b) if and after such one year period, such one-year period shall be extended with respect to the extent that, within 365 amount of Net Available Cash so committed for a period not to exceed 180 days after the Company’s or any Restricted Subsidiary’s receipt of until such Net Available Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance accordance with this covenant; provided that clause such agreement (x) of this paragraph shall apply to such amounts so longor, but only so longif earlier, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any until termination of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantagreement). The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Available Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in this Section 4.10(b4.11(a) will be deemed to shall constitute “Excess Proceeds.”; provided, that any amount of proceeds offered to Holders pursuant to clause
(3b) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will shall be required to make an offer to purchase from all Holders and, if applicable, redeem (or make an offer to do so) any Debt of the Company or any Guarantor that ranks pari passu in right of payment with the Notes or the Guarantees (“Pari Passu Debt”) the provisions of which require the Company to redeem or purchase such Debt with the proceeds from any Asset Sales (or offer to do so), for a purchase price equal to the amount of such Excess Proceeds as follows:
(1) the Company shall (a) make an offer to purchase (an “Asset Sale Offer”) to all Holders of Notes andin accordance with the procedures set forth in this Section 4.11, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company and (b) redeem or purchase (or the Subsidiary Guarantor, as applicable) to make an offer to purchase do so) any such other Pari Passu Indebtedness with Debt, pro rata in proportion to the proceeds from any Asset Salerespective principal amounts (or accreted value in the case of Debt issued at a discount) of the Notes and such other Pari Passu Debt required to be redeemed or purchased, to purchase the maximum principal amount (or accreted value) of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies Debt that may be purchased redeemed out of the amount (the “Payment Amount”) of such Excess Proceeds, at an ;
(2) the offer price for the Notes shall be payable in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness tendered pursuant to an Asset Sale Offer, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided by to, but excluding, the terms of date such IndebtednessAsset Sale Offer is consummated (the “Offered Amount”), in accordance with the procedures set forth in this Indenture or Section 4.11, and the agreements governing the redemption price for such Pari Passu Indebtedness, Debt (the “Pari Passu Debt Amount”) shall be as applicable.set forth in the related documentation governing such Debt;
(e3) if the aggregate Offered Amount of Notes validly tendered and not withdrawn by Holders thereof exceeds the pro rata portion of the Payment Amount allocable to the Notes, Notes to be purchased shall be selected on a pro rata basis (or otherwise in accordance with applicable Depository procedures); and
(4) upon completion of such Asset Sale Offer in accordance with the foregoing provisions, the amount of Excess Proceeds with respect to which such Asset Sale Offer was made shall be deemed to be zero. To the extent that the sum of the aggregate amount Offered Amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer and the aggregate Pari Passu Debt Amount paid to the holders of such Pari Passu Debt is less than the Excess ProceedsPayment Amount relating thereto (such shortfall constituting a “Net Proceeds Deficiency”), the Company may use any remaining Excess the Net Proceeds Deficiency, or a portion thereof, for any purpose not prohibited by general corporate purposes, subject to the provisions of this Indenture. If .
(c) Solely for the aggregate principal amount purposes of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f4.11(a)(2). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds following shall be reset at zero.deemed to be cash:
Appears in 2 contracts
Samples: Indenture (Pilgrims Pride Corp), Indenture (Pilgrims Pride Corp)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company (or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;
(2) the fair market value is determined by (a) an executive officer of the Company if the value is less than $20.0 million and evidenced by an Officers’ Certificate delivered to the Trustee, or (b) the Company’s Board of Directors if the value is $20.0 million or more and evidenced by a resolution of the Board of Directors set forth in an Officers’ Certificate delivered to the Trustee; and
(3) at least 75% of the aggregate consideration received by the Company and its Restricted Subsidiaries in the Asset Sale is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) provision, each of the amount offollowing will be deemed to be cash:
(Aa) any liabilities (liabilities, as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated in right of payment to the NotesNotes or any Subsidiary Guarantee) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, assets pursuant to an a customary novation agreement that releases or indemnifies the Company or such Subsidiary from further liability;
(b) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are, within 90 days after the Asset Sale, converted by the Company or such Subsidiary into cash, to the extent of the cash received in that conversion; and
(c) accounts receivable of a business retained by the company or any of its Restricted Subsidiaries, as the case may be, following the sale of such business, provided that such accounts receivable (i) are not past due more than 90 days and (ii) do not have a payment date greater than 120 days from the date of the invoices creating such accounts receivable. Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company (or the applicable Restricted Subsidiary, as the case may be, from further liability therefor) may apply those Net Proceeds at its option to any combination of the following:
(I) to repay Senior Debt;
(BII) any securities, notes to invest in or other obligations acquire Additional Assets; or
(III) to make capital expenditures in respect of the Company’s or other assets its Restricted Subsidiaries’ Oil and Gas Business. The requirement of clause (II) or property received by (III) of the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required preceding paragraph shall be deemed to be satisfied for cash if a bona fide binding contract committing to make the investment, acquisition or Cash Equivalents (expenditure referred to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received therein is entered into by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (Person other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company within the time period specified in the preceding paragraph and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases Net Proceeds are at or above 100.0% of the principal amount thereof), or (iii) making an offer (subsequently applied in accordance with such contract within six months following the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with date such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition agreement is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantinto. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its or any Restricted Subsidiaries Subsidiary may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such the Net Cash Proceeds in any manner that is not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale Sales that is are not applied or invested as provided and within in the time period set forth in Section 4.10(b) preceding paragraph will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to .” On the 361st day after an Asset Sale Offer made (or, at the Company’s option, any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When earlier date), if the aggregate amount of Excess Proceeds then exceeds $50.0 20.0 million, the Company will be required to make an offer (“Asset Sale Offer”) Offer to all Holders of Notes andNotes, to the extent required by the terms of other Pari Passu Indebtedness, and to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Salethen outstanding, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an . The offer price in cash in an amount any Asset Sale Offer will be equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessand Additional Interest, if any, as may thereon to the Settlement Date, subject to the right of Holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the Settlement Date, and will be provided by the terms payable in cash. If any Excess Proceeds remain after consummation of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess ProceedsOffer, the Company may use any remaining those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, selection the Trustee will select the Notes and such Pari Passu Indebtedness to be purchased on a pro rata basis. Upon surrender of Notes a Note that is repurchased in part, the Issuers shall issue in the name of the applicable Holder and the Trustee shall authenticate for purchase will be made by such Holder at the Company expense of the Issuers a new Note equal in accordance with Section 3.04(f)principal amount to the non-repurchased portion of the Note surrendered. Upon completion of such each Asset Sale Offer, the amount of Excess Proceeds shall will be reset at zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.10, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under such provisions by virtue of such compliance.
Appears in 2 contracts
Samples: Indenture (Linn Energy, LLC), Indenture (Linn Energy, LLC)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2as determined in good faith by the Company's Board of Directors), (ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and from which the Company or such and its Restricted Subsidiary, as the case may be, from further liability therefor;
Subsidiaries are unconditionally released and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are promptly, but in no event more than 60 days after receipt, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
cash for purposes of this provision; and (biii) Within 365 days after upon the Company’s or any Restricted Subsidiary’s receipt consummation of the Net Cash Proceeds of any an Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale within 365 days of receipt thereof either (or any portion thereofA) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) prepay Senior Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateraland, in the case of any Senior Indebtedness under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility, (B) to reinvest in Productive Assets, or (C) a combination of prepayment and investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 366th day after an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiaryor such earlier date, to repayif any, prepay, defease, redeem, reduce, purchase as the Board of Directors of the Company or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) determines not to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with apply the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject relating to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged Sale as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until clauses (iii)(A), (iii)(B) and (iii)(C) of the immediately preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (iii)(A), (iii)(B) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3iii)(C) of Section 4.10(bthe immediately preceding sentence (each a "Net Proceeds Offer Amount") or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with for cash (the proceeds "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from any Asset Sale, to purchase the maximum principal all Holders on a pro rata basis at least that amount of Notes and any such Pari Passu Indebtedness Securities equal to which the Asset Sale Note Offer applies that may be purchased out of the Excess Proceeds, Amount at an offer a price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness Securities to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; provided, however, that if at any time any non-cash consideration received by the terms Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such Indebtednessnon-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant Section 4.6(a). Any offer to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will with respect to Other Debt shall be made by the Company in accordance and consummated concurrently with Section 3.04(f). Upon completion of such Asset Sale any Net Proceeds Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 2 contracts
Samples: Indenture (Fisher Scientific International Inc), Indenture (Fisher Scientific International Inc)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company's Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or cash, Cash Equivalents, Additional Assets and/or Replacement Assets (as defined below) and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesNotes or any Guarantee of a Guarantor) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assetsassets shall be deemed to be cash for purposes of this provision; and
(3) upon the consummation of an Asset Sale (other than an Excluded Asset Sale, property or Capital Stockthe proceeds of which may be used as set forth in clause (iii) below), in each case, pursuant to an agreement that releases or indemnifies the Company shall apply, or cause such Restricted SubsidiarySubsidiary to apply, as the case may be, from further liability therefor;Net Cash Proceeds relating to such Asset Sale within 365 days of receipt thereof either
(Bi) any securities, notes or other obligations or other assets or property received by to permanently reduce senior secured Indebtedness of the Company or any Restricted Subsidiary from Subsidiary; and, in the case of any such transferee outstanding Indebtedness under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;
(ii) to make a capital expenditure or investment in properties and assets that are converted by replace the properties and assets that were the subject of such Asset Sale or in properties and assets (including Capital Stock) that will be used in the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto ("Replacement Assets");
(iii) to the payment (i) of all criminal and civil judgments rendered against, and all civil and criminal settlements entered into by, the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents any of its Subsidiaries in connection with antitrust investigations and related matters and all costs and expenses related thereto ("Antitrust Liabilities") and (ii) after the Board of Directors of the Company shall have delivered a certified resolution to the extent Trustee to the effect that the Company is not required, under the rules and regulations of the cash or Cash Equivalents received)SEC under the 1934 Act, to state in each case within 180 days following its annual report that the receipt thereof; and
(C) any Designated Noncash Consideration received by Antitrust Liabilities could have a material adverse effect on the Company's financial condition, results of operation and prospects, of pension and environmental liabilities of the Company or any of its Restricted Subsidiaries Subsidiaries, in such Asset Sale having an aggregate Fair Market Value, taken together each case only with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal respect to the Net Cash Proceeds from such Excluded Asset Sale (or any portion thereof) as follows:Sales; and/or
(1iv) if such Net Cash Proceeds are from an Asset Sale that is not a disposition combination of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire prepayment and investment permitted by the foregoing clauses (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes3)(i) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof3)(ii), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;.
(4b) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in Pending the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt final application of such Net Cash Proceeds, the Company may (a) temporarily reduce borrowings under the Credit Agreement or any other revolving credit facility and (b) with respect to Net Cash Proceeds from Excluded Asset Sales, retain such Net Cash Proceeds in a Restricted Subsidiary, blocked account pending application as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described set forth in clause (4) or (5a)(3)(iii) of this Section 4.10(b), and 4.10; provided that investment, purchase or other acquisition is thereafter completed within 180 days after upon a determination made by the end Board of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all Directors of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation Company that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to are no longer needed for such amounts so longpurpose, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will then be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in clauses (a)(3)(i), (a)(3)(ii) and/or (a)(3)(iv) of this covenant shall Section 4.10. On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not start until such time as to apply the Net Cash Proceeds may be repatriated relating to such Asset Sale as set forth in clauses (whether or not a)(3)(i), (a)(3)(ii) and (a)(3)(iv) of this Section 4.10 (each, a "Net Proceeds Offer Trigger Date"), such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (a)(3)(i), (a)(3)(ii) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3a)(3)(iv) of this Section 4.10(b4.10 (each, a "Net Proceeds Offer Amount") or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required or such Restricted Subsidiary to make an offer to purchase (“Asset Sale the "Net Proceeds Offer”") to all Holders of Notes and, to the extent required by the terms of other any Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with Indebtedness, on a date (the proceeds "Net Proceeds Offer Payment Date") not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from any Asset Sale, to purchase the maximum principal amount all Holders (and holders of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies Indebtedness) on a pro rata basis, that may be purchased out amount of the Excess Proceeds, at an offer price in cash in an amount Notes (and Pari Passu Indebtedness) equal to 100.0the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes (and Pari Passu Indebtedness Indebtedness) to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; provided, however, that if at any time any non-cash consideration received by the terms Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.10.
(c) The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to Section 4.10(b)).
(d) In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.1 which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.10 shall comply with the provisions of this Section 4.10 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such Indebtedness)properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.10.
(e) In the event that the Company shall be required to commence a Net Proceeds Offer, in accordance it shall follow the procedures specified below. The notice shall contain all instructions and materials reasonably necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer. The Net Proceeds Offer shall be made to all Holders. Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 30 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 in exchange for cash. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. The notice, which shall govern the terms of the Net Proceeds Offer, shall state:
(1) that the Net Proceeds Offer is being made pursuant to this Section 4.10;
(2) the Net Proceeds Offer Amount, the Purchase Price and the Purchase Date;
(3) that any Note not properly tendered or otherwise not accepted for repurchase shall continue to accrue interest and Additional Interest, if any;
(4) that, unless the Company defaults in the payment of the amount due on the Purchase Date, all Notes or portions thereof accepted for repurchase pursuant to the Net Proceeds Offer shall cease to accrue interest and Additional Interest, if any, after the Purchase Date;
(5) that Holders electing to have any Notes repurchased pursuant to any Net Proceeds Offer shall be required to tender the Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Purchase Date;
(6) that Holders will be entitled to withdraw their election if the Company, the Depositary or the agreements governing Paying Agent, as the case may be, receives, not later than the Purchase Date, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes delivered for repurchase and a statement that such Holder is withdrawing his election to have such Notes repurchased in whole or in part;
(7) that, to the extent Holders properly tender Notes and holders of Pari Passu IndebtednessIndebtedness properly tender such Pari Passu Indebtedness in an amount exceeding the Net Proceeds Offer Amount, as applicable.
(e) To the extent that tendered Notes and Pari Passu Indebtedness will be purchased on a pro rata basis based on the aggregate amount amounts of Notes and Pari Passu Indebtedness so tendered (and the Trustee shall select the tendered Notes of tendering Holders on a pro rata basis based on the amount of Notes tendered); and
(8) that Holders whose Notes are being repurchased only in part will be issued new Notes equal in principal amount to the portion of the Notes tendered (or transferred by book-entry transfer) that is not to be repurchased, which portion must be equal to $1,000 in principal amount or an integral multiple thereof. On or before the Purchase Date, the Company shall to the extent lawful, (i) accept for payment, on a pro rata basis in accordance with this Indenture to the extent necessary, the Net Proceeds Offer Amount of (A) Notes or portions thereof properly tendered and not withdrawn pursuant to an Asset Sale the Net Proceeds Offer is and (B) properly tendered Pari Passu Indebtedness, or if less than the Excess ProceedsNet Proceeds Offer Amount has been tendered, all Notes and Pari Passu Indebtedness properly tendered, (ii) deposit with the Company may use any remaining Excess Proceeds Paying Agent an amount equal to the Purchase Price, plus accrued and unpaid interest and Additional Interest, if any, thereon to the Purchase Date in respect of all Notes or portions thereof so tendered and accepted for any purpose not prohibited by this Indenture. If repurchase and (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes surrendered or portions thereof being repurchased by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the Company. The Paying Agent shall promptly (but in any case not later than five days after the Purchase Date) mail to each Holder of Notes so repurchased the amount of Excess Proceedsdue in connection with such Notes, selection of Notes for purchase will be made by and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company in accordance with Section 3.04(f)the form of an Officers' Certificate shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion to the Holder thereof; provided that each such new Note shall be in a principal amount of $1,000 or an integral multiple thereof. The Company shall publicly announce the results of the Net Proceeds Offer on or as soon as practicable after the Purchase Date. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any, in each case to the Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders to the Net Proceeds Offer. If any Net Cash Proceeds remain after the consummation of any Net Proceed Offer, the Company may use those Net Cash Proceeds for any purpose not otherwise prohibited by this Indenture. Upon completion of such Asset Sale each Net Proceeds Offer, the amount of Excess Net Cash Proceeds shall will be reset at zero.
(f) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.10, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.10 by virtue thereof.
Appears in 2 contracts
Samples: Indenture (Davis-Standard CORP), Indenture (Davis-Standard CORP)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to (as determined in good faith by management of the Company or, if such Asset Sale; andSale involves consideration in excess of $10,000,000, by the board of directors of the Company, as evidenced by a board resolution),
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, from such Asset Sale is in the form of cash or Cash Equivalents; provided, however, to Equivalents and is received at the extent that the assets sold in time of such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereofdisposition. For purposes of this clause (2) provision, each of the amount offollowing will be deemed to be cash:
(A) any liabilities (liabilities, as shown on the Company’s or such Restricted Subsidiary’s most recent consolidated balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orthereto, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities or any Guarantee) that are extinguished in connection with the transactions relating to such Asset Sale, assumed or that are assumed discharged by the transferee of any such assets, property or Capital Stock, in each case, assets pursuant to an a customary novation, release or indemnity agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, Subsidiary from or indemnifies against further liability therefor;liability; and
(B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are are, within 210 days, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalentscash, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), received in each case within 180 days following the receipt thereofthat conversion; and
(Ciii) any Designated Noncash Consideration received by upon the consummation of an Asset Sale, the Company applies, or any of its causes such Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market ValueSubsidiary to apply, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of such Asset Sale within 360 days of receipt thereof either:
(A) to repay any Asset Sale, (I) Secured Indebtedness of the Company or any Restricted Subsidiary of the Company (and, to the extent such Secured Indebtedness relates to principal under a Restricted Subsidiaryrevolving credit or similar facility, at its optionto obtain a corresponding reduction in the commitments thereunder, except that the Company may apply an amount equal to temporarily repay such Secured Indebtedness using the Net Cash Proceeds from such Asset Sale and thereafter use such funds to reinvest pursuant to clause (B) below within the period set forth therein without having to obtain a corresponding reduction in the commitments thereunder) or any portion thereof(II) as follows:Indebtedness of Restricted Subsidiaries that are not Guarantors;
(1B) if to reinvest, or to be contractually committed to reinvest pursuant to a binding agreement, in Productive Assets and, in the latter case, to have so reinvested within 540 days of the date of receipt of such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateralor
(C) to purchase Securities and other Pari Passu Indebtedness, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed pro rata tendered to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not for purchase at a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, price equal to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0100% of the principal amount thereof)thereof (or the accreted value of such Securities or other Pari Passu Indebtedness, if such Securities or (iiiother Pari Passu Indebtedness was issued at a discount) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interestinterest thereon, if any, on to the amount date of Notes that would otherwise be prepaid;
purchase pursuant to an offer to purchase made by the Company as set forth below (4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assetsa “Net Proceeds Offer”), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, furtherhowever, that the assets acquired with Company may defer making a Net Proceeds Offer until the aggregate Net Cash Proceeds from Asset Sales not otherwise applied in accordance with this covenant equal or exceed $20,000,000. Subject to the deferral right set forth in the final proviso of the preceding paragraph, each notice of a disposition Net Proceeds Offer shall be mailed, by first-class mail, to Holders not be Excluded Assets and are required to be pledged as Collateral pursuant to more than 360 days after the Security Documents reasonably promptly after receipt by relevant Asset Sale or, in the event the Company or a Restricted Subsidiary thereof;
has entered into a binding agreement as provided in (5B) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent thatabove, within 365 360 days following the termination of such agreement but in no event later than 540 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceedsrelevant Asset Sale. Such notice shall specify, among other things, the Company or a Restricted Subsidiarypurchase date (which shall be no earlier than 30 days nor later than 45 days from the date such notice is mailed, except as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance otherwise comply with the procedures set forth in this Indenture Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Securities in whole or in part in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. To the agreements governing the extent Holders properly tender Securities in an amount which, together with all other Pari Passu IndebtednessIndebtedness so tendered, as exceeds the Net Proceeds Offer, Securities and other Pari Passu Indebtedness of tendering Holders shall be repurchased on a pro rata basis in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof (based upon the aggregate principal amount tendered, or, if applicable.
(e) , the aggregate accreted value tendered). To the extent that the aggregate principal amount of Notes and Securities tendered pursuant to any Net Proceeds Offer, which, together with the aggregate principal amount or aggregate accreted value, as the case may be, of all other Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer tendered, is less than the Excess Proceedsamount of Net Cash Proceeds subject to such Net Proceeds Offer, the Company may use any remaining Excess portion of such Net Cash Proceeds not required to fund the repurchase of tendered Securities and other Pari Passu Indebtedness for any purpose purposes not otherwise prohibited by this Indenture. If Upon the aggregate principal amount consummation of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale any Net Proceeds Offer, the amount of Excess Net Cash Proceeds subject to any future Net Proceeds Offer from the Asset Sales giving rise to such Net Cash Proceeds shall be reset at deemed to be zero. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act to the extent applicable in connection with the repurchase of Securities pursuant to a Net Proceeds Offer.
Appears in 2 contracts
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, consummate make any Asset Sale unless:
unless (1i) the Company or any of its such Restricted Subsidiaries, as the case may be, Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value fair market value (as determined at in good faith by the time Board of contractually agreeing Directors as evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee) of the assets subject to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2ii) at least 75.085% of the consideration from for such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash cash, Cash Equivalents or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Guarantee of the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assetsassets (provided, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant there is no further recourse to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed with respect to have complied with such liabilities), and (iii) within 12 months of such Asset Sale, the provisions described Net Proceeds thereof are (a) invested in assets related to the business of the Company or its Restricted Subsidiaries or (b) to the extent not used as provided in clause (4) or (5) of this Section 4.10(b) if and to the extent thata), within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement applied to make an investmentoffer to purchase Notes as described below (an "Excess Proceeds Offer"); provided, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary if (x) the amount of Net Proceeds from any Asset Sale not invested pursuant to clause (a) above is prohibited or delayed by applicable local law less than $5.0 million or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection the Net Proceeds from an Asset Sale of Collateral with such repatriation that would not otherwise be realized)respect to which the Lien thereon is subordinate to the Lien securing obligations under the Revolving Credit Facility are used to repay obligations under the Revolving Credit Facility, as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will shall not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject make an offer pursuant to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantb). The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its or any Restricted Subsidiaries Subsidiary may temporarily reduce Indebtedness (including under a revolving Debt Facility) the Revolving Credit Facility or otherwise temporarily invest or utilize such Net Cash Proceeds in any manner not prohibited by this IndentureCash Equivalents. Any The amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(bthe preceding clause (a) will be deemed to constitute “constitutes "Excess Proceeds”; provided." If the Company elects, that any amount of proceeds offered or becomes obligated to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to make an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 millionOffer, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an shall offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum Notes having an aggregate principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0the Excess Proceeds (the "Purchase Amount"), at a purchase price equal to 100% of the aggregate principal amount of the Notes and Pari Passu Indebtedness thereof, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessinterest, if any, as may be provided by to the terms purchase date. The Company must commence such Excess Proceeds Offer not later than 30 days after the expiration of such Indebtedness), in accordance with the procedures set forth in this Indenture or 12-month period following the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent Asset Sale that produced Excess Proceeds. If the aggregate amount of purchase price for the Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale the Excess Proceeds Offer is less than the Excess Proceeds, the Company and its Restricted Subsidiaries may use any remaining the portion of the Excess Proceeds remaining after payment of such purchase price for any purpose not prohibited general corporate purposes. Each Excess Proceeds Offer shall remain open for a period of 20 Business Days and no longer, unless a longer period is required by this Indenturelaw (the "Excess Proceeds Offer Period"). If Promptly after the aggregate termination of the Excess Proceeds Offer Period (the "Excess Proceeds Payment Date"), the Company shall purchase and mail or deliver payment for the Purchase Amount for the Notes or portions thereof tendered, pro rata or by such other method as may be required by law, or, if less than the Purchase Amount has been tendered, all Notes tendered pursuant to the Excess Proceeds Offer. The principal amount of Notes surrendered to be purchased pursuant to an Excess Proceeds Offer may be reduced by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the principal amount of Notes acquired by the Company through purchase or redemption (other than pursuant to a Change of Control Offer) subsequent to the date of the Asset Sale and surrendered to the Trustee for cancellation. Each Excess Proceeds Offer shall be conducted in compliance with all applicable laws, including without limitation, Regulation 14E of the Exchange Act and the rules thereunder and all other applicable Federal and state securities laws. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.10, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.10 by virtue thereof. The Company shall not, and shall not permit any of its Subsidiaries to, create or suffer to exist or become effective any restriction that would impair the ability of the Company to make an Excess Proceeds Offer upon an Asset Sale or, if such Excess Proceeds Offer is made, to pay for the Notes tendered for purchase. The Company shall, no later than 30 days following the expiration of the 12-month period following the Asset Sale that produced Excess Proceeds, selection commence the Excess Proceeds Offer, if an Excess Proceeds Offer is required by the terms of this Indenture, by mailing to the Trustee and each Holder, at such Holder's last registered address, a notice, which shall govern the terms of the Excess Proceeds Offer, and shall state:
(1) that the Excess Proceeds Offer is being made pursuant to this Section 4.10, the principal amount of Notes which shall be accepted for payment and that all Notes validly tendered shall be accepted for payment on a pro rata basis;
(2) the purchase price and the date of purchase;
(3) that any Notes not tendered or accepted for payment pursuant to the Excess Proceeds Offer shall continue to accrue interest;
(4) that, unless the Company defaults in the payment of the purchase price with respect to any Notes tendered, Notes accepted for payment pursuant to the Excess Proceeds Offer shall cease to accrue interest after the Excess Proceeds Payment Date;
(5) that Holders electing to have Notes purchased pursuant to an Excess Proceeds Offer shall be required to surrender their Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Company prior to the close of business on the third Business Day immediately preceding the Excess Proceeds Payment Date;
(6) that Holders shall be entitled to withdraw their election if the Company receives, not later than the close of business on the second Business Day preceding the Excess Proceeds Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes the Holder delivered for purchase will and a statement that such Holder is withdrawing his election to have such Notes purchased;
(7) that Holders whose Notes are purchased only in part shall be made by issued Notes representing the unpurchased portion of the Notes surrendered; provided that each Note purchased and each new Note issued shall be in principal amount of $1,000 or whole multiples thereof; and
(8) the instructions that Holders must follow in order to tender their Notes. On or before the Excess Proceeds Payment Date, the Company shall (i) accept for payment on a pro rata basis the Notes or portions thereof tendered pursuant to the Excess Proceeds Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so accepted and (iii) deliver to the Trustee the Notes so accepted, together with an Officers' Certificate stating that the Notes or portions thereof tendered to the Company are accepted for payment. The Paying Agent shall promptly mail to each Holder of Notes so accepted payment in accordance with Section 3.04(f). Upon completion an amount equal to the purchase price of such Asset Sale OfferNotes, and the Trustee shall promptly authenticate and mail to such Holders new Notes equal in principal amount to any unpurchased portion of the Note surrendered. The Company shall make a public announcement of the results of the Excess Proceeds Offer as soon as practicable after the Excess Proceeds Payment Date. For the purposes of this Section 4.10, the amount of Excess Proceeds Trustee shall be reset at zeroact as the Paying Agent.
Appears in 2 contracts
Samples: Indenture (Atlantic Express Transportation Corp), Indenture (Atlantic Express Transportation Corp)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company’s Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesNotes and other than liabilities consisting of Disqualified Capital Stock) that are extinguished in connection with the transactions relating to such Asset Sale, or (i) that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and from which the Company and its Restricted Subsidiaries are unconditionally released or (ii) in respect of which neither the Company nor any Restricted Subsidiary following such Restricted Subsidiary, as the case may be, from further liability therefor;
sale has any obligation and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are promptly, but in no event more than 60 days after receipt, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofshall be deemed to be cash for purposes of this provision; and
(C3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 360 days of receipt thereof either:
(a) to prepay any Designated Noncash Consideration Senior Debt or Guarantor Senior Debt and, in the case of any Senior Debt or Guarantor Senior Debt under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;
(b) to reinvest in Productive Assets (and to the extent such reinvestment constitutes an Investment, such reinvestment complies with Section 4.8); or
(c) a combination of prepayment and investment permitted by the foregoing clauses (3)(a) and (3)(b). On the 361st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence (each a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase for cash (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount at a price in cash equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest, dividends or other earnings received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder as of the date of such conversion or disposition and the Net Cash Proceeds thereof shall be applied in accordance with this covenant.
(b) Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $20 million, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by the Company and its Restricted Subsidiaries aggregates at least $10 million, at which time the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $20 million or more shall be deemed to be a Net Proceeds Offer Trigger Date).
(c) Notwithstanding paragraphs (a) and (b) of this Section 4.12, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Productive Assets (and to the extent any of such Productive Assets constitutes an Investment, such Investment complies with Section 4.8); and
(2) such Asset Sale is for at least fair market value (as determined in good faith by the Company’s Board of Directors); provided that any consideration not constituting Productive Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together permitted to be consummated under this paragraph shall constitute Net Cash Proceeds and shall be subject to the provisions of this covenant with all other Designated Noncash Consideration received pursuant respect to this subclause (C) the application of Net Cash Proceeds; provided that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of entering into such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without transaction or immediately after giving effect to subsequent changes in value); thereto, no Default or Event of Default shall each have occurred or be deemed to be Cash Equivalentscontinuing or would occur as a consequence thereof.
(bd) Within 365 25 days after following the Net Proceeds Offer Trigger Date, the Company shall mail or cause the Trustee to mail (in the Company’s or any Restricted Subsidiary’s receipt name and at its expense) notice of a Net Proceeds Offer to the Holders of the Notes at their last registered addresses with a copy to the Trustee and the Paying Agent. The Net Proceeds Offer shall remain open from the time of mailing for at least 20 Business Days and until the close of business on the third Business Day prior to the Net Proceeds Offer Payment Date. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer. The notice, which shall govern the terms of the Net Cash Proceeds Offer, shall state:
(i) that the Net Proceeds Offer is being made pursuant to this Section 4.12;
(ii) the purchase price (including the amount of accrued and unpaid interest, if any) for each Note and the Net Proceeds Offer Payment Date;
(iii) that any Asset SaleNote not tendered or accepted for payment will continue to accrue interest in accordance with the terms thereof;
(iv) that any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date unless the Company shall fail to make payment therefor;
(v) that Holders electing to have Notes purchased pursuant to a Net Proceeds Offer will be required to surrender their Notes to the Paying Agent at the address specified in the notice prior to 5:00 p.m., New York City time, on the third Business Day immediately preceding the Net Proceeds Offer Payment Date and must complete any form letter of transmittal proposed by the Company and acceptable to the Trustee and the Paying Agent;
(vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the third Business Day immediately preceding the Net Proceeds Offer Payment Date, a telex or facsimile transmission (confirmed by overnight delivery of the original thereof) or letter setting forth the name of the Holder, the principal amount of Notes the Holder delivered for purchase, the Note certificate number (if any) and a statement that such Holder is withdrawing his election to have such Notes purchased;
(vii) that if Notes in a principal amount in excess of the Holders’ pro rata share of the Net Proceeds are tendered pursuant to a Net Proceeds Offer, the Company shall purchase Notes on a pro rata basis among the Notes tendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000 or integral multiples of $1,000 shall be acquired);
(viii) that Holders whose Notes are purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; and
(ix) the instructions that Holders must follow in order to tender their Notes. On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment, on a Restricted Subsidiarypro rata basis among the Notes, at its optionNotes or portions thereof tendered pursuant to the Net Proceeds Offer, may apply (ii) deposit with the Paying Agent money, in immediately available funds, in an amount sufficient to pay the purchase price of all Notes or portions thereof so tendered and accepted and (iii) deliver to the Paying Agent the Notes so accepted together with an Officers’ Certificate setting forth the Notes or portions thereof tendered to and accepted for payment by the Company. The Paying Agent shall promptly mail or deliver to Holders of Notes so accepted payment in an amount equal to the Net Cash Proceeds from purchase price, and the Trustee shall promptly authenticate and mail or deliver to such Asset Sale (or Holders a new Note equal in principal amount to any unpurchased portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Note surrendered. Any Notes not so accepted shall be promptly mailed or delivered by the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part to the Holder thereof. The Company will publicly announce the results of the Collateral (other than Indebtedness owed to an Affiliate of Net Proceeds Offer on the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of first Business Day following the Collateral (other than Indebtedness owed Net Proceeds Offer Payment Date. The Paying Agent shall promptly deliver to the Company or an Affiliate the balance of any moneys held by the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed Paying Agent after payment to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicableaforesaid.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess Net Proceeds Offer Amount for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f)general corporate purposes. Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero.
(f) In the event of the transfer of substantially all of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Article V, which transaction does not constitute a Change of Control, the successor Person shall be deemed to have sold the properties and assets of the Company and its Subsidiaries not so transferred for purposes of this Section 4.12, and shall comply with the provisions of clause (a)(3) of this Section 4.12 respect to such deemed sale as if it were an Asset Sale.
(g) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations (including Rule 14e-1 under the Exchange Act) in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.12, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.12 by virtue thereof.
Appears in 2 contracts
Samples: Indenture (Vertis Inc), Indenture (Vertis Inc)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (provided such Fair Market Value shall be determined (i) as of the date of contractually agreeing to such Asset Sale and (ii) in good faith by an Officer of the Company or, if the consideration with respect to such Asset Sale exceeds $40.0 million, the Board of Directors of the Company) of the assets or Equity Interests issued or sold or otherwise disposed of; and
(2) at least 75% of the aggregate consideration received by the Company or its Restricted Subsidiaries in the Asset Sale and all other Asset Sales since the Initial Issuance Date is in the form of cash cash, Cash Equivalents or Cash EquivalentsMarketable Securities; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the NotesNotes or any Subsidiary Guarantee) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, assets pursuant to an a customary novation or assumption agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, Subsidiary from further liability therefor;shall be deemed to be cash for purposes of this provision; and
(B) any securities, notes or other obligations or (other assets or property than Marketable Securities) received by the Company or any such Restricted Subsidiary from such transferee that are converted within 180 days after such Asset Sale by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), received in each case within 180 days following the receipt thereof; and
(Cthat conversion) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalentscash for purposes of this provision; provided that in the case of any Asset Sale pursuant to a condemnation, appropriation or similar taking, including by deed in lieu of condemnation, such Asset Sale shall not be required to satisfy the requirements of items (1) and (2) of this Section 5.10(a).
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds of any from an Asset Sale, the Company or a any such Restricted Subsidiary, at its option, Subsidiary may apply an amount equal such Net Proceeds to any combination of the Net Cash Proceeds from such Asset Sale (or any portion thereof) as followsfollowing:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition permanently repay the principal of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) any senior Indebtedness of the Company (other than or any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);Subsidiary; or
(2) if such Net Cash Proceeds are from an Asset Sale that is not to acquire or invest in (including by way of a disposition purchase of Collateralassets or stock, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiarymerger, to repay, prepay, defease, redeem, reduce, purchase consolidation or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowingsotherwise) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business Productive Assets or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisitiona capital expenditure; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, provided that the assets acquired with the Net Cash Proceeds requirements of a disposition shall not this clause (2) will be Excluded Assets and are required deemed to be pledged as Collateral pursuant satisfied if an agreement committing to make the Security Documents reasonably promptly after receipt acquisitions, investments or expenditures referred to above is entered into by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance Proceeds with the provision described good faith expectation that such Net Proceeds will be applied to satisfy such commitment in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed accordance with such agreement within 180 days after the end of such 365-day period, and if such Net Proceeds are not so applied within such 180-day period, then such Net Proceeds will constitute Excess Proceeds (as defined below).
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its or any such Restricted Subsidiaries Subsidiary may temporarily reduce Indebtedness (outstanding revolving credit borrowings, including borrowings under a revolving Debt Facility) the Credit Facilities, or otherwise invest or utilize such Net Cash Proceeds in any manner that is not prohibited by this the Indenture. .
(d) Any amount of Net Cash Proceeds from any Asset Sale Sales that is are not applied or invested as provided and within the time period set forth in Section 4.10(b5.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time . On the 366th day after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to (or, at the extent to which Company’s option, such offer is accepted by the Holders. When earlier date), if the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (an “Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset SaleSale (“Pari Passu Notes”), to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness Notes to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness Notes, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessand Additional Amounts, if any, as may be provided by to the terms date of such Indebtedness)purchase, in accordance with the procedures set forth in this Indenture Section 4.10 hereof or the agreements governing the Pari Passu IndebtednessNotes, as applicable.
(e) . To the extent that the aggregate principal amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsamount that the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this the Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness Notes surrendered by Holders holders or lenders, collectively, exceeds the amount that the Company is required to repurchase, the Trustee shall select the Notes and Pari Passu Notes to be purchased on a pro rata basis on the basis of Excess Proceeds, selection the aggregate principal amount of tendered Notes for purchase and Pari Passu Notes (except that any Notes represented by a Note in global form will be made selected by such method as the Depositary or its nominee or successor may require or, where the nominee or successor is the Trustee, a method that most nearly approximates pro rata selection as the Trustee deems fair and appropriate), based on the amounts tendered or required to be redeemed (with such adjustments as may be deemed appropriate by the Company so that only Notes in accordance with Section 3.04(fdenominations of $2,000, or an integral multiple of $1,000 in excess thereof, will be purchased). Upon completion of such each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. If the Purchase Date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Amount, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no other interest or Additional Amounts, if any, will be payable to Holders who tender Notes pursuant to the Asset Sale Offer. The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.10 or Section 5.10, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.10 or Section 5.10 by virtue of compliance with such laws and regulations.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such (as determined in good faith by senior management or, in the case of an Asset SaleSale in excess of $5 million, by the Company's Board of Directors); and
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Aa) any liabilities (as -------- shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
and (Bb) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 180 days after such Asset Sale (to the extent of the cash received) shall be deemed to be cash for the purposes of this provision; and (iii) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Equivalents receivedProceeds relating to such Asset Sale within 360 days of receipt thereof either (A) to prepay any Senior Debt or Guarantor Senior Debt and, in the case of any Senior Debt or Guarantor Senior Debt under any revolving credit facil- ity, effect a permanent reduction in the availability under such revolving credit facility, (B) to make an Investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses reasonably related, complementary or ancillary thereto or a reasonable expansion thereof ("Replacement Assets"), and/or (C) a combination of prepayment and ------------------ investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 361st day after an Asset Sale or such earlier date, if any, as the senior management or Board of Directors, as the case may be, of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such ------------------------------- aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each case within 180 a "Net Proceeds Offer Amount") ------------------------- shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer ------------------ ------------------ Payment Date") not less than 30 nor more than 60 days following the receipt thereofapplicable ------------ Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that -------- amount of Securities equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Securities to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, -------- ------- that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.16. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to this paragraph). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a trans- action permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.16, and shall comply with the provisions of this Section 4.16 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.16. Notwithstanding the first two paragraphs of this Section 4.16, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Replacement Assets; and
(C2) such Asset Sale is for fair market value; provided that any Designated Noncash Consideration consideration not constituting Replacement Assets received by -------- the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the first two paragraphs of this Section 4.16. Notice of each Net Proceeds Offer pursuant to this subclause Section 4.16 shall be mailed or caused to be mailed, by first class mail, by the Company within 30 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(C1) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds Offer is being made pursuant to this Section 4.16 and that all Securities tendered will be accepted for payment; provided, however, that if -------- ------- the principal amount of any Asset SaleSecurities tendered in the Net Proceeds Offer exceeds the aggregate amount of Net Proceeds Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis;
(2) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by applicable law);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a Restricted Subsidiarystatement that such Holder is withdrawing his election to have such Security purchased; and
(7) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, at its optionthe Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, may apply (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereofprice, plus the amount of accrued but unpaid interest, if any, on thereon set forth in the amount notice of Notes that would otherwise such Net Proceeds Offer. Any Security not so accepted shall be prepaid;
(4) promptly mailed by the Company to make an investment inthe Holder thereof. For purposes of this Section 4.16, the Trustee shall act as the Paying Agent. Any amounts remaining after the purchase or otherwise acquire of Securities pursuant to a Net Proceeds Offer shall be returned by the Trustee to the Company. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or securities laws and regulations thereunder to make payments (including without limitation prepayments the extent such laws and progress payments) regulations are applicable in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form repurchase of Securities pursuant to a Net Proceeds Offer. To the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, extent that the assets acquired with the Net Cash Proceeds provisions of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company any securities laws or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied regulations conflict with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds4.16, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance shall comply with the provision described in clause (4) or (5) of this Section 4.10(b), applicable securities laws and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required regulations and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted have breached its obligations under this Section 4.16 by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicablevirtue thereof.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not cause or permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company's Board of Directors or senior management of the Company);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; providedand
(3) upon the consummation of an Asset Sale, howeverthe Company shall apply, or cause such Restricted Subsidiary to apply, the extent that the assets sold in Net Cash Proceeds relating to such Asset Sale were part within 360 days of receipt thereof either:
(a) to repay or prepay Indebtedness outstanding under the Senior Credit Facility and, if that Indebtedness is revolving credit Indebtedness, to correspondingly reduce the funding commitment under the Senior Credit Facility with respect to the revolving credit Indebtedness repaid or prepaid;
(b) to repay or prepay any Indebtedness of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required Company that is secured by a Lien permitted to be pledged as Collateral incurred pursuant to Section 4.18;
(c) to make an investment in properties or assets that replace the Security Documents properties or assets that were the subject of such Asset Sale or in properties or assets that will be used in the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses reasonably promptly related thereto ("Replacement Assets");
(d) to make an investment in Crude Oil and Natural Gas Related Assets;
(e) to repurchase the Company's 10% Senior Notes due 2007 pursuant to a net proceeds offer similar to the Net Proceeds Offer described below; or
(f) to make a combination of prepayment and investment permitted by the foregoing clauses (3)(a) through (3)(e). On the 361st day after receipt an Asset Sale or such earlier date, if any, as the Board of Directors of the Company determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a) through (3)(f) of the immediately preceding paragraph (each a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have been received by the Company or a such Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for but which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have not been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place applied on or prior to the date of before such balance sheet Net Proceeds Offer Trigger Date as permitted in the good faith determination of the Companyclauses (3)(a) through (3)(f) of the Company or any Restricted Subsidiary immediately preceding paragraph (other than liabilities that are each a "Net Proceeds Offer Amount") shall be applied by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, to make an offer to purchase (a "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from further liability therefor;
all Holders and, to the extent required by the terms of any Pari Passu Indebtedness the holders of such Pari Passu Indebtedness, on a pro rata basis, that principal amount of Notes (Band Pari Passu Indebtedness) purchasable with the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes (and Pari Passu Indebtedness) to be purchased, plus accrued and unpaid interest, if any, thereon to the date of purchase; provided, however, that if at any securities, notes or other obligations or other assets or property time any non-cash consideration received by the Company or any Restricted Subsidiary Subsidiary, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.16. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to this paragraph). Notwithstanding the first two paragraphs of this Section 4.16, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such transferee paragraphs to the extent that:
(1) the consideration for such Asset Sale constitutes Replacement Assets and/or Crude Oil and Natural Gas Related Assets and/or the assumption of obligations secured by Liens that are converted by burden some or all of the assets being sold; provided that, in the case of any such assumption, (a) the Person assuming such obligations shall have no recourse with respect to such obligations to the Company or such any of its Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents Subsidiaries and (to the extent b) no assets of the cash Company or Cash Equivalents received), in each case within 180 days following the receipt thereofany of its Restricted Subsidiaries (other than those assets being sold) are subject to such Liens; and
(C2) any Designated Noncash Consideration such Asset Sale is for fair market value; provided, that at least 75% of the total consideration received by the Company or any of its Restricted Subsidiaries in connection with any such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% shall be in the form of Total Replacement Assets, calculated at Crude Oil and Natural Gas Related Assets, the time assumption of Liens described in clause (1) above, cash or Cash Equivalents and that any Net Cash Proceeds so received shall be subject to the provisions of clause (3) of the receipt first paragraph and to the provisions of such Designated Noncash Consideration (the second paragraph of this covenant. Notice of each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 30 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt procedures set forth herein. Upon receiving notice of the Net Cash Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of any Asset Sale$1,000 in exchange for cash. To the extent Holders properly tender Notes and holders of Pari Passu Indebtedness property tender such Indebtedness with an aggregate principal amount exceeding the Net Proceeds Offer Amount, Notes of tendering Holders and Pari Passu Indebtedness will be purchased on a pro rata basis (based on principal amounts of Notes and Pari Passu Indebtedness tendered). A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. Each Net Proceeds Offer notice shall contain all instructions and materials necessary to enable Holders to tender Notes pursuant to the Net Proceeds Offer and shall state the following terms:
(i) that the Net Proceeds Offer is being made pursuant to Section 4.16, that all Notes tendered will be accepted for payment; provided, however, that if the aggregate principal amount of Notes tendered in a Net Proceeds Offer plus accrued interest (together with the amount of Pari Passu Indebtedness properly tendered) at the expiration of such offer exceeds the aggregate amount of the Net Proceeds Offer, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000 or a Restricted Subsidiary, at its option, may apply an amount equal to multiples thereof shall be purchased) and that the Net Cash Proceeds from Offer shall remain open for a period of 20 Business Days or such Asset Sale (or any portion thereof) longer period as follows:may be required by law;
(1ii) if such the purchase price (including the amount of accrued interest) and the Net Cash Proceeds are Offer Payment Date (which shall be not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date and which shall be at least five Business Days after the Trustee receives notice thereof from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2iii) if such Net Cash Proceeds are from an Asset Sale that is any Note not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, tendered will continue to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiaryaccrue interest;
(3iv) that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to repaythe Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(v) that Holders electing to have a Note purchased pursuant to a Net Proceeds Offer will be required to surrender the Note, prepaywith the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto the Paying Agent at the address specified in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed notice prior to the Company close of business on the third Business Day prior to the Net Proceeds Offer Payment Date;
(vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a telegram, telex, facsimile transmission or an Affiliate letter setting forth the name of the Company and Holder, the Notes) and (y) principal amount of the Notes bythe Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and
(vii) that Holders whose Notes are purchased only in part will be issued new Notes in a principal amount equal to the unpurchased portion of the Notes surrendered; provided, at its option however, that each Note purchased and each new Note issued shall be in an original principal amount of $1,000 or integral multiples thereof. On or before the Net Proceeds Offer Payment Date, the Company shall (a) accept for payment Notes or portions thereof tendered pursuant to the Net Proceeds Offer which are to be purchased in accordance with item (i) redeeming Notes as provided under Section 3.01above, (iib) purchasing Notes through open market purchases (to deposit with the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (Paying Agent in accordance with Section 2.14 U.S. Legal Tender sufficient to pay the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, price plus the amount of accrued but unpaid interest, if any, on the amount of all Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets purchased and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding deliver an Officers' Certificate stating the foregoing, Notes or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the extent that repatriation to the United States Holders of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized Notes so accepted payment in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to the purchase price plus accrued interest, if any. For purposes of this Section 4.16, the Trustee shall act as the Paying Agent. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Cash Proceeds will be promptly applied (net Offer. To the extent that the provisions of additional taxes that would be payable any securities laws or reserved against as a result of repatriating such amounts) in compliance regulations conflict with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash ProceedsSection 4.16, the Company shall comply with the applicable securities laws and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required regulations and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted have breached its obligations under this Section 4.16 by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicablevirtue thereof.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company (or any of its the Restricted SubsidiariesSubsidiary, as the case may be, ) receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at in good faith by the time Board of contractually agreeing to such Asset SaleDirectors) of the Capital Stock, assets or property Equity Interests issued or sold or otherwise disposed of pursuant to such Asset Sale; and
and (2ii) at least 75.075% of the consideration from such Asset Sale therefor received by the Company or such Restricted Subsidiary, as the case may be, Subsidiary is in the form of cash or Cash Equivalents; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the NotesSecurities or any guarantee thereof) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, assets pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, Subsidiary from further liability therefor;
and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are promptly, but in no event more than 30 days after receipt, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) cash for purposes of this provision. Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds of any from an Asset Sale, the Company or a such Restricted SubsidiarySubsidiary may apply such Net Proceeds, at its option, may apply an amount equal (a) to permanently reduce Indebtedness outstanding under the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire New Credit Facility (and to correspondingly permanently reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offerb) to all Holders to purchase their Notes at 100.0% the making of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working a capital assets), properties or capital expenditures, in each case used or useful expenditure in a Similar Permitted Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the other assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or used in a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantPermitted Business. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) the New Credit Facility or otherwise invest or utilize such Net Cash Proceeds in any manner that is not prohibited by this IndentureIndenture and the Collateral Documents. Any amount of Net Cash Proceeds from any Asset Sale Sales that is are not applied or invested as provided and within in the time period set forth in Section 4.10(b) first sentence of this paragraph will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. EXCESS PROCEEDS.” When the aggregate amount of Excess Proceeds exceeds $50.0 5.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company Securities (or the Subsidiary Guarantor, as applicablean “ASSET SALE OFFER”) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies Securities that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessand Liquidated Damages thereon, if any, as may be provided by to, but not including, the terms date of such Indebtedness)purchase, in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) Indenture. To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly Securities tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenturegeneral corporate purposes. If the aggregate principal amount of Notes Securities surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will the Trustee shall select the Securities to be made by the Company in accordance with Section 3.04(f)purchased on a pro rata basis. Upon completion of such Asset Sale Offeroffer to purchase, the amount of Excess Proceeds shall be reset at zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Securities pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.5, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.5. Liens under the Collateral Documents on assets subject to an Asset Sale and permitted pursuant to the terms hereof shall be released concurrently with the consummation of such Asset Sale. In the event that, pursuant to this Section 4.5, the Company shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below. The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the “OFFER PERIOD”). No later than five Business Days after the termination of the Offer Period (the “PURCHASE DATE”), the Company shall purchase the principal amount of Securities required to be purchased pursuant to this Section 4.5 (the “OFFER AMOUNT”) or, if less than the Offer Amount has been tendered, all Securities tendered in response to the Asset Sale Offer. Payment for any Securities so purchased shall be made in the same manner as interest payments are made. If the Purchase Date is on or after an interest payment record date and on or before the associated Interest Payment Date, any accrued and unpaid interest (and Liquidated Damages, if any, due on such Interest Payment Date) shall be paid to the Person in whose name a Security is registered at the close of business on such record date, and such interest (or Liquidated Damages, if applicable) shall not be payable to Holders who tender Securities pursuant to the Asset Sale Offer. Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 4.5 and the length of time the Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Security not tendered or accepted for payment shall continue to accrue interest;
(d) that, unless the Company defaults in making such payment, any Security accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest on or after the Purchase Date;
(e) that Holders electing to have a Security purchased pursuant to an Asset Sale Offer may only elect to have all of such Security purchased and may not elect to have only a portion of such Security purchased;
(f) that Holders electing to have a Security purchased pursuant to any Asset Sale Offer shall be required to surrender the Security, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Security completed, or transfer by book-entry transfer, to the Company, the Depositary or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Holder is withdrawing its election to have such Security purchased;
(h) that, if the aggregate principal amount of Securities surrendered by Holders exceeds the Offer Amount, the Trustee shall select the Securities to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Securities in denominations of $1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Securities were purchased only in part shall be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered (or transferred by book-entry transfer). On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Securities or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Securities tendered, and shall deliver to the Trustee an Officers’ Certificate stating that such Securities or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 4.5. The Company, the Depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Securities tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Security and the Trustee, upon written request from the Company, shall authenticate and mail or deliver such new Security to such Holder, in a principal amount equal to any unpurchased portion of the Security surrendered. Any Security not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date.
Appears in 1 contract
Samples: Indenture (Hard Rock Hotel Inc)
Limitation on Asset Sales. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its such Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such sale or other disposition at least equal to the Fair Market Value fair market value thereof (as determined at in good faith by the time Company's Board of contractually agreeing to such Asset SaleDirectors, and evidenced by a board resolution); (ii) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0not less than 75% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiaryits Subsidiaries, as the case may be, is in the form of cash or Cash Equivalents; provided, howeverand (iii) the Net Cash Proceeds received by the Company or such Restricted Subsidiary are applied (a) first, to the extent the Company elects, or is required, to prepay, repay, make an offer to redeem or purchase Indebtedness under any then existing Senior Debt of the Company or any Restricted Subsidiary; provided, that any such repayment shall result in a permanent reduction of the commitments thereunder in an amount equal to the principal amount so repaid; (b) second, to the extent of the balance of Net Cash Proceeds after application as described above, to the extent the Company elects, to an Investment in assets sold (including Capital Stock or other securities purchased in connection with the acquisition of Capital Stock or property of another Person) used or useful in businesses similar or ancillary to the business of the Company or Restricted Subsidiary as conducted at the time of such Asset Sale were part ("Replacement Assets"), provided that such Investment occurs within 360 days following the receipt of the Collateralsuch Net Cash Proceeds, the assets received so long as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a such Restricted Subsidiary thereof. For purposes of this clause (2) has notified the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or Trustee in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place writing on or prior to the date of 270th day following such balance sheet Asset Sale (the "Reinvestment Date") that it has determined to apply the Net Cash Proceeds from such Asset Sale to an investment in such Replacement Assets; (c) third, to make an offer to redeem or purchase the good faith determination of the Company) Existing Notes or Indebtedness under any other then existing Senior Debt of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection accordance with the transactions relating to terms of the Existing Indenture or the document governing such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiaryother Senior Debt, as the case may be; (d) fourth, from further liability therefor;
(B) if any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds from any Asset Sale are not applied as provided in the preceding clauses (a) through (d) within 420 days of any such Asset Sale, the Company or a Restricted Subsidiary, at its option, may shall apply an amount equal to the Net Cash Proceeds from such Asset Sale not so applied (or any portion thereof) as follows:
(1) if such the "Available Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (xProceeds") Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of offer to repurchase the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes byExchange Debentures, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (a purchase price in cash equal to the extent such purchases are at or above 100.0100% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, thereof plus the amount of accrued but and unpaid interest, if any, on to the date of repurchase (an "Excess Proceeds Offer"). If an Excess Proceeds Offer is not fully subscribed, the Company may retain the portion of the Available Net Cash Proceeds not required to repurchase Securities.
(b) If the Company is required to make an Excess Proceeds Offer, the Company shall mail, within 30 days following the Reinvestment Date, a notice to the Holders stating, among other things: (1) that such Holders have the right to require the Company to apply the Available Net Cash Proceeds to repurchase such Securities at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase (the "Purchase Price"); (2) the purchase date (the "Purchase Date"), which shall be no earlier than 30 days and not later than 60 days from the date such notice is mailed; (3) the instructions, determined by the Company, that each Holder must follow in order to have such Securities repurchased; and (4) the calculations used in determining the amount of Notes Available Net Cash Proceeds to be applied to the repurchase of such Securities. The Excess Proceeds Offer shall remain open for a period of 20 Business Days following its commencement (the "Offer Period"). The notice, which shall govern the terms of the Excess Proceeds Offer, shall state:
(1) that would otherwise be prepaidthe Excess Proceeds Offer is being made pursuant to this Section 4.09 and the length of time the Excess Proceeds Offer will remain open;
(2) the Purchase Price and the Purchase Date;
(3) that any Security not tendered or accepted for payment will continue to accrue interest;
(4) to make an investment in, purchase or otherwise acquire that any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral Security accepted for payment pursuant to the Security Documents reasonably promptly Excess Proceeds Offer shall cease to accrue interest on and after receipt by the Company or a Restricted Subsidiary thereofPurchase Date so long as payment thereof is not prohibited pursuant to the terms of the Indenture;
(5) that Holders electing to make an investment inhave a Security purchased pursuant to any Excess Proceeds Offer will be required to surrender the Security, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds form entitled "Option of a disposition shall not be Excluded Assets and are required Holder to be pledged as Collateral pursuant Elect Purchase" on the reverse of the Security completed, to the Security Documents reasonably promptly after receipt Company, a depositary, if appointed by the Company Company, or a Restricted Subsidiary thereof; orPaying Agent at the address specified in the notice at least three Business Days before the Purchase Date;
(6) any combination that Holders will be entitled to withdraw their election if the Company, depositary or Paying Agent, as the case may be, receives, not later than the expiration of the foregoingOffer Period, provideda facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a statement that the Company and its Restricted Subsidiaries will be deemed such Holder is withdrawing his election to have complied with the provisions described in clause Security purchased;
(47) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after if the Company’s or any Restricted Subsidiary’s receipt aggregate principal amount of such Securities surrendered by Holders exceeds the Available Net Cash Proceeds, the Company or Trustee shall select the Securities to be purchased on a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause pro rata basis (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise adjustments as may be realized), as determined deemed appropriate by the Company so that only Securities in its sole discretiondenominations of $1,000, or integral multiples thereof, shall be purchased) or by such other method as the Trustee shall deem fair and appropriate; and
(8) that Holders whose Securities were purchased only in part will be issued new Securities equal in principal amount to the unpurchased portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs)Securities surrendered.
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries or Unrestricted Subsidiary Guarantors to, directly or indirectly, consummate any an Asset Sale unless:
(1) the Company or any of its Restricted Subsidiariesthe Subsidiary, as the case may be, receives consideration at the time of that Asset Sale at least equal to the Fair Market Value fair market value (as determined at evidenced by a Board Resolution set forth in an Officers' Certificate delivered to the time of contractually agreeing to such Asset Saletrustee) of the Capital Stock, assets or property Equity Interests issued or sold or otherwise disposed of pursuant to such Asset Saleof; and
(2) at least 75.075% of the consideration from such Asset Sale therefor received by the Company or such Restricted Subsidiary, as the case may be, Subsidiary is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For the purposes of this clause (2) provision, each of the amount offollowing shall be deemed to be cash:
(Ai) any liabilities (liabilities, as shown on the Company’s 's or such Restricted the Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notesnotes or any guarantee thereof) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, assets pursuant to an a customary novation agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, Subsidiary from further liability therefor;liability; and
(Bii) any securities, notes or other obligations or other assets or property received by the Company or any Restricted the Subsidiary from such the transferee that are converted within 270 days of their receipt by the Company or such Restricted the Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (but only to the extent of the cash or Cash Equivalents received), . The 75% limitation referred to in each case within 180 days following the receipt thereof; and
clause (C2) above will not apply to any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at in which the time cash or Cash Equivalents portion of the receipt of such Designated Noncash Consideration consideration received therefrom, determined in accordance with subclauses (i) and (ii) above, is equal to or greater than what the after-tax proceeds would have been had that Asset Sale complied with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) aforementioned 75% limitation. Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds of any from an Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicablethe case may be, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of shall apply the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner that is not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied Indenture (or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent the Company is required, to which such offer is accepted by apply the Holders. When Net Proceeds pursuant to the terms of the Credit Facility); provided that when the aggregate amount of Excess such Net Proceeds exceeds $50.0 10.0 million, the Company will be required to make (1) use 80% of the amount of any Net Proceeds in excess of $10.0 million obtained from Asset Sales (a) within thirty days, to repay or purchase Senior Indebtedness, or (b), if no Senior Indebtedness is then outstanding, within one hundred twenty days to commence an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicablean "Asset Sale Offer") to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of that 80% portion of Net Proceeds in excess of $10.0 million (the Excess Proceeds"Asset Sale Offer Amount"), at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessand Liquidated Damages, if any, as may be provided by to the terms date of such Indebtedness)purchase, in accordance with the procedures set forth in this Indenture Section 3.09; and (2) with respect to that 20% portion of the Net Proceeds in excess of $10.0 million which remain after consummation of a payment on Senior Indebtedness or an Asset Sale Offer, the agreements governing Company, its Restricted Subsidiaries and the Pari Passu IndebtednessUnrestricted Subsidiary Guarantors, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess such portion of the Net Proceeds in excess of $10.0 million for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, in connection with an Asset Sale Offer exceeds the amount of Excess Proceeds, selection of the Trustee shall select the Notes for purchase will to be made by the Company purchased in accordance with the procedures set forth in Section 3.04(f)3.09. Upon completion of such an Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities7 laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture relating to an Asset Sale Offer, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company's Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause PROVIDED THAT (2a) the amount of:
(A) of any Indebtedness or other liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than Indebtedness or liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assetsassets so long as the documents governing such liabilities provide that there is no further recourse to the Company or any of its Subsidiaries with respect to such liabilities and (b) the Fair Market Value of any marketable securities, currencies, notes or other obligations received by the Company or any such Restricted Subsidiary in exchange for any such assets that are converted into cash or Cash Equivalents within 180 days after the consummation of such Asset Sale shall be deemed to be cash for purposes of this provision; and
(3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 360 days of receipt thereof:
(a) (i) to repay Indebtedness under the Credit Agreement and permanently reduce the commitments thereunder, (ii) in the case where the property or asset that was the subject of such Asset Sale does not constitute Collateral, to repay Indebtedness secured by a Lien of the type described in clause (7), (14) or (17) of the definition of the term "Permitted Lien," (iii) in the case where the property or asset that was the subject of such Asset Sale is the property or asset of a Foreign Restricted Subsidiary, to repay Indebtedness of any Foreign Restricted Subsidiary or (iv) a combination of the foregoing clauses (i), (ii) and (iii);
(b) to make an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in any other properties and assets that will be used, or Capital StockStock of a Person engaged, in the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto ("REPLACEMENT ASSETS"); or
(c) a combination of prepayment and investment permitted by the foregoing clauses (3)(a) and (3)(b). On the 361st day after an Asset Sale (a "NET PROCEEDS OFFER TRIGGER DATE"), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of the preceding paragraph (each case, pursuant to an agreement that releases or indemnifies a "NET PROCEEDS OFFER AMOUNT") shall be applied by the Company or such Restricted Subsidiary, as Subsidiary to make an offer to purchase (the case may be"NET PROCEEDS OFFER") on a date (the "NET PROCEEDS OFFER PAYMENT DATE") not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from further liability therefor;
(B) all Holders on a pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount at a price equal to 100% of the Accreted Value of the Notes to be purchased, plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase; PROVIDED, HOWEVER, that if at any securities, notes or other obligations or other assets or property time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder on the date of such conversion or disposition, as the case may be, and the Net Cash Proceeds thereof shall be applied in accordance with this SECTION 4.16. The Company may defer any Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales in which case the accumulation of such transferee that are converted by amount shall constitute a Net Proceeds Offer Trigger Date (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to this SECTION 4.16). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under SECTION 5.01, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this SECTION 4.16, and shall comply with the provisions of this SECTION 4.16 with respect to such deemed sale as if it constituted an Asset Sale. In addition, the Fair Market Value of such properties and assets of the Company or such its Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required Subsidiaries deemed to be satisfied sold shall be deemed to be Net Cash Proceeds for cash or Cash Equivalents (purposes of this SECTION 4.16. To the extent that the aggregate Accreted Value of Notes tendered pursuant to such Net Proceeds Offer is less than the Net Proceeds Offer Amount the Company and its Restricted Subsidiaries may use such deficiency for general corporate purposes. Upon completion of such Net Proceeds Offer, the amount of Net Proceeds Offer Amount will be reset to zero. Notwithstanding anything to the contrary contained in the foregoing paragraphs of this SECTION 4.16, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent of that:
(1) the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofconsideration for such Asset Sale constitutes Replacement Assets; and
(C2) such Asset Sale is for Fair Market Value; PROVIDED THAT any Designated Noncash Consideration consideration not constituting Replacement Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed permitted to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the consummated under this paragraph shall constitute Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal subject to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness provisions of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part foregoing paragraphs of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness this SECTION 4.16. Each notice of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed Net Proceeds Offer shall be mailed to the Company or an Affiliate record Holders as shown on the register of Holders within 25 days following the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not Offer Trigger Date, with a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed copy to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b)Trustee, and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance comply with the procedures set forth in this Indenture Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 in principal amount at maturity in exchange for cash. To the agreements governing extent Holders properly tender Notes in an amount exceeding the Pari Passu IndebtednessNet Proceeds Offer Amount, Notes of tendering Holders will be purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as applicable.
(e) may be required by law. - 49 - The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the aggregate amount provisions of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsany securities laws or regulations conflict with this SECTION 4.16, the Company may use any remaining Excess Proceeds for any purpose shall comply with the applicable securities laws and regulations and shall not prohibited be deemed to have breached its obligations under this SECTION 4.16 by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerovirtue thereof.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall Xxxxxx Publishing will not, and shall will not cause or permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) Xxxxxx Publishing or the Company or any of its applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by Xxxxxx Publishing’s Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by Xxxxxx Publishing or the Company or such Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or cash, Cash EquivalentsEquivalents and/or assets of the same type having the same general utility as the subject assets, as determined by Issuer (“Replacement Assets”) and is received at the time of such disposition; provided, however, to the extent that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ai) any liabilities (as shown on the CompanyXxxxxx Publishing’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company Xxxxxx Publishing or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesNotes or any Guarantee of a Guarantor) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assetsassets shall be deemed to be cash for purposes of this provision and (ii) any notes or other obligations received by Xxxxxx Publishing or such Restricted Subsidiary from such transferee that are immediately converted by Xxxxxx Publishing or such Restricted Subsidiary into cash (to the extent of the cash received) shall be deemed, property to the extent of cash so received, to be cash for purposes of this provision; and
(3) upon the consummation of an Asset Sale, Xxxxxx Publishing shall apply, or Capital Stockcause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 180 days of receipt thereof:
(a) to prepay any Senior Debt or Guarantor Senior Debt and, in each casethe case of any Senior Debt or Guarantor Senior Debt under any revolving credit facility (other than the Working Capital Facility), effect a permanent reduction in the availability under such revolving credit facility; and/or
(b) to make an offer to all Holders and the Tranche B Lender to reduce the balance on the Tranche B Loan and to repurchase the maximum principal amount of Notes, on a pro rata basis, that may be reduced and purchased out of the Net Cash Proceeds (or the portion thereof not applied pursuant to clause (a) above) at a Purchase Price in cash in an amount equal to 101% of the principal amount thereof, together with accrued and unpaid interest to the date fixed for the closing of such offer, in accordance with the procedures set forth in Section 3.10 (a “Net Proceeds Offer”).
(4) Notwithstanding the foregoing, all Net Cash Proceeds of any Collateral in respect of any Asset Sale shall, pending their application in accordance with this Section 4.10 or the release thereof in accordance with the provisions of the Security Documents, be deposited in an account subject to a deposit account control agreement as provided in the Security Documents. In the event of the transfer of substantially all (but not all) of the property and assets of Xxxxxx Publishing and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.1, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of Xxxxxx Publishing and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of Xxxxxx Publishing or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant. Xxxxxx Publishing will not, and will not cause or permit any of its Restricted Subsidiaries to, engage in any Asset Swaps, unless:
(1) at the time of entering into such Asset Swap and immediately after giving effect to such Asset Swap, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; (2) in the event such Asset Swap involves the transfer by Xxxxxx Publishing or any Restricted Subsidiary of assets having an aggregate fair market value in excess of $25.0 million, either (i) the terms of such Asset Swap shall be approved by a majority of the Independent Directors of Xxxxxx Publishing, but in no event fewer than two Independent Directors of Xxxxxx Publishing, such approval to be evidenced by a Board Resolution stating that releases or indemnifies such Independent Directors have determined that such transaction complies with the Company foregoing provisions or, (ii) in the event there are fewer than two such Independent Directors, Xxxxxx Publishing shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness of such Asset Swap to Xxxxxx Publishing or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securitiesa financial point of view, notes or other obligations or other assets or property received by from an Independent Financial Advisor and file the Company or any Restricted Subsidiary from such transferee that are converted by same with the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofTrustee; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) Notwithstanding anything contained herein, this Section 4.15 shall not apply to Real Estate Asset Sales or Net Cash Proceeds therefrom. The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiariesthe applicable Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to (as determined in good faith by management of the Company or, if such Asset Sale; and
Sale or a series of related Asset Sale involves consideration in excess of $500,000, by the Board of Directors, as evidenced by a Board Resolution), (2ii) at least 75.085% of the consideration from (other than Indebtedness assumed in such Asset Sale which is (A) Indebtedness that is non-recourse to the Company and its Subsidiaries after such Asset Sale or (B) subordinate or junior to the Securities, non-recourse to the Company and its Subsidiaries after such Asset Sale and assumed in accordance with Section 4.03 hereof) received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
such Asset Sale shall be cash or Cash Equivalents and is received at the time of such disposition; and (iii) upon the consummation of an Asset Sale, the Company shall commit, or cause such Subsidiary to commit, to apply the Net Cash Proceeds of such Asset Sale within 180 days of the receipt thereof, and shall apply, or cause such Subsidiary to apply, such Net Cash Proceeds within 180 days of receipt thereof either (A) to repay any Permitted Indebtedness, as defined in clauses (ii) and (xi) of the definition thereof (and to the extent such Indebtedness relates to a revolving credit or similar facility (“Revolving Debt”) a corresponding reduction in the commitments thereunder; provided, however, that (i) up to an aggregate of $20 million of Net Cash Proceeds of Asset Sales may be applied to the repayment of Revolving Debt without a corresponding reduction in the commitments thereunder, (B) to reinvest in Productive Assets, or (C) to purchase Securities tendered to the Company for purchase at a price equal to the then effective optional redemption price thereof, as set forth in Paragraph 5 of the Securities, plus accrued interest thereon to the date of purchase pursuant to an offer to purchase made by the Company as set forth below (a “Net Proceeds Offer”); provided, however, that if at any securities, notes or other obligations or other assets or property time any non-cash consideration received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received)Company, as the case may be, in each case within 180 days following the receipt thereof; and
(C) connection with any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Valueis converted into or sold or otherwise disposed of for cash, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of then such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); conversion or disposition shall each be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with clause (iii) above; and provided, further, that the Company may defer making a Net Proceeds Offer until the aggregate Net Cash EquivalentsProceeds from Asset Sales to be applied equals or exceeds $5.0 million.
(b) Within 365 Subject to the deferral right in the final proviso of paragraph (a), each notice of a Net Proceeds Offer pursuant to this Section 4.15 shall be mailed or caused to be mailed, by first class mail, by the Company not more than 180 days after the Company’s or any Restricted Subsidiary’s receipt relevant Asset Sale to all Holders at their last registered addresses as of a date within 15 days of the Net Cash Proceeds mailing of any Asset Salesuch notice, with a copy to the Company or a Restricted Subsidiary, at its option, may apply an amount equal Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as followsOffer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section 4.15 and that all Securities tendered will be accepted for payment; provided, however, that if the aggregate principal amount of Securities tendered in a Net Proceeds Offer plus accrued interest at the expiration of such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in offer exceeds the case of revolving borrowings): (x) Indebtedness aggregate amount of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to Net Proceeds Offer, the Company shall select the Securities to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Securities in denominations of $1,000 or an Affiliate of the Companymultiples thereof shall be purchased);
(2) if the purchase price (including the amount of accrued interest) and the purchase date (which shall be no earlier than 30 days nor later than 45 days from the date such Net Cash notice is mailed, other than as may be required by law) (the “Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor SubsidiaryPurchase Date”);
(3) that any Security not tendered will continue to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid accrue interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment inthat, purchase or otherwise acquire unless the Company defaults in making payment therefor, any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral Security accepted for payment pursuant to the Security Documents reasonably promptly Net Proceeds Offer shall cease to accrue interest after receipt by the Company or a Restricted Subsidiary thereofProceeds Purchase Date;
(5) that Holders electing to make an investment inhave a Security purchased pursuant to a Net Proceeds Offer will be required to surrender the Security, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds form entitled “Option of a disposition shall not be Excluded Assets and are required Holder to be pledged as Collateral pursuant Elect Purchase” on the reverse of the Security completed, to the Security Documents reasonably promptly after receipt by Paying Agent at the Company or a Restricted Subsidiary thereof; oraddress specified in the notice prior to the close of business on the Business Day prior to the Proceeds Purchase Date;
(6) any combination that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than two Business Days prior to the Proceeds Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the foregoingHolder, provided, the principal amount of the Securities the Holder delivered for purchase and a statement that the Company and its Restricted Subsidiaries such Hxxxxx is withdrawing his election to have such Security purchased; and
(7) that Holders whose Securities are purchased only in part will be deemed to have complied with the provisions described issued new Securities in clause (4) or (5) of this Section 4.10(b) if and a principal amount equal to the extent that, within 365 days after unpurchased portion of the Company’s Securities surrendered. On or any Restricted Subsidiary’s receipt of such Net Cash Proceedsbefore the Proceeds Purchase Date, the Company shall (i) accept for payment Securities or a Restricted Subsidiaryportions thereof tendered pursuant to the Net Proceeds Offer which are to be purchased in accordance with item (b)(1) above, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance (ii) deposit with the provision described in clause Paying Agent U.S. Legal Tender sufficient to pay the purchase price of all Securities to be purchased and (4iii) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, deliver to the extent that repatriation Trustee Securities so accepted, together with an Officers’ Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash Securities so accepted payment in an amount equal to 100.0% the purchase price. For purposes of this Section 4.15, the principal amount Trustee shall act as the Paying Agent. Any amounts remaining after the purchase of Securities pursuant to a Net Proceeds Offer shall be returned by the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect Trustee to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance Company. The Company will comply with the procedures set forth requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in this Indenture or connection with the agreements governing the Pari Passu Indebtedness, as applicable.
(e) purchase of Securities pursuant to a Net Proceeds Offer. To the extent that the aggregate amount provisions of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant any such rule conflict with the provisions of this Indenture relating to an Asset Sale Offer is less than the Excess Proceedsa Net Proceeds Offer, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If shall comply with the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion provisions of such Asset Sale Offer, the amount of Excess rule and be deemed not to have breached its obligations relating to such Net Proceeds shall be reset at zeroOffer by virtue thereof.
Appears in 1 contract
Samples: Indenture (Wickes Inc)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company (or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from such Asset Sale received by the Company or such a Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;
(2) the fair market value is determined by (a) an executive officer of the General Partner if the value is less than $20.0 million and evidenced by an Officers’ Certificate delivered to the Trustee, or (b) the Company’s Board of Directors if the value is $20.0 million or more and evidenced by a resolution of the Board of Directors set forth in an Officers’ Certificate delivered to the Trustee; and
(3) at least 75% of the aggregate consideration received by the Company and its Restricted Subsidiaries in the Asset Sale and all other Asset Sales since the date of this Indenture is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereofcash. For purposes of this clause (2) provision, each of the amount offollowing will be deemed to be cash:
(Aa) any liabilities (liabilities, as shown on the Company’s or such any Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted such Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the NotesNotes or any Subsidiary Guarantee) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, assets pursuant to an a customary novation agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, Subsidiary from further liability therefor;liability; and
(Bb) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are are, within 90 days after the Asset Sale, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalentscash, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), received in each case within 180 that conversion. Within 360 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of after the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any from an Asset Sale, the Company or a any Restricted Subsidiary, Subsidiary may apply those Net Proceeds at its option, may apply an amount equal option to any combination of the Net Cash Proceeds from such Asset Sale (or any portion thereof) as followsfollowing:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3I) to repay, prepay, defease, redeem, reduce, purchase repurchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility)Senior Debt, first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and including the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4II) to acquire all or substantially all of the properties or assets of a Person primarily engaged in a Permitted Business;
(III) to acquire a majority of the Voting Stock of a Person primarily engaged a Permitted Business;
(IV) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case ; or
(V) to acquire other long-term assets that are used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantPermitted Business. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its or any Restricted Subsidiaries Subsidiary may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such the Net Cash Proceeds in any manner that is not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale Sales that is are not applied or invested as provided and within in the time period set forth in Section 4.10(b) preceding paragraph will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time .” On the 361st day after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to (or, at the extent to which such offer is accepted by the Holders. When Company’s option, any earlier date), if the aggregate amount of Excess Proceeds then exceeds $50.0 20.0 million, the Company will be required to make an offer (“Asset Sale Offer”) Offer to all Holders of Notes andNotes, to the extent required by the terms of other Pari Passu Indebtedness, and to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Salethen outstanding, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an . The offer price in cash in an amount any Asset Sale Offer will be equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessinterest, if any, as may to the Settlement Date, subject to the right of Holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the Settlement Date, and will be provided by the terms payable in cash. If any Excess Proceeds remain after consummation of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess ProceedsOffer, the Company may use any remaining those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, selection the Trustee will select the Notes and the agent of Notes the trustee for purchase will such other Pari Passu Indebtedness shall select such Pari Passu Indebtedness to be made by the Company purchased on a pro rata basis as set forth in accordance with Section 3.04(f)3.09(h) of this Indenture. Upon completion of such each Asset Sale Offer, the amount of Excess Proceeds shall will be reset at zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.10, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under such provisions by virtue of such conflict.
Appears in 1 contract
Samples: Indenture (Calumet Specialty Products Partners, L.P.)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company’s Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
such Asset Sale shall be in the form of cash or Cash Equivalents and shall be received at the time of such disposition; provided that, for purposes of this clause (B2) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case ) within 180 30 days following the after receipt thereofwill be considered “cash” or “Cash Equivalents”; and
(C3) any Designated Noncash Consideration received by upon the Company or any consummation of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale (or any portion thereof) as followswithin 365 days of receipt thereof either:
(1a) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly permanently reduce commitments with respect thereto in the case of revolving borrowings): Indebtedness (x) Indebtedness of the Company (other than under any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of CollateralCredit Facility and, in the case of an Asset Sale by any such Indebtedness under any revolving credit facility, effect a Restricted permanent reduction in the availability under such revolving credit facility or (y) of a Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in does not guarantee the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor SubsidiaryNotes;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4b) to make an investment in, purchase or otherwise acquire any one or more businesses, in properties and assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, properties and assets and/or properties that are were the subject to of such Asset Sale; provided, Sale or in properties and assets (including Capital Stock) that will be used in the assets acquired with the Net Cash Proceeds business of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with as existing on the provisions described Issue Date or in clause businesses reasonably related thereto (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b“Replacement Assets”), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.; or
(c) Notwithstanding a combination of prepayment and investment permitted by the foregoingforegoing clauses (3)(a) and (3)(b).
(b) On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to the extent that repatriation to the United States of any or all of apply the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply relating to such amounts so long, but only so long, Asset Sale as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until clauses (3)(a), (3)(b) and (3)(c) of Section 4.10(a) (each, a “Net Proceeds Offer Trigger Date”), such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (3)(a), (3)(b) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (33)(c) of Section 4.10(b4.10(a) or pursuant to an Asset Sale the last proviso of this paragraph (each, a “Net Proceeds Offer made at any time after the Asset Sale Amount”) shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required or such Restricted Subsidiary to make an offer to purchase (the “Asset Sale Net Proceeds Offer”) to all Holders of Notes and, to the extent required by the terms of other any Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with Indebtedness, on a date (the proceeds “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders (and holders of any Asset Salesuch Pari Passu Indebtedness) on a pro rata basis, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of with the Excess Proceeds, Net Proceeds Offer Amount at an offer a price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; provided, however, that if at any time any non-cash consideration received by the terms Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.10. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $25.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $25.0 million, shall be applied as required pursuant to this Section 4.10(b)). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor entity shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.10 and shall comply with the provisions of this Section 4.10 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such Indebtednessproperties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.10.
(c) Notwithstanding Sections 4.10(a) and (b), the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such Sections to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Replacement Assets; and
(2) such Asset Sale is for fair market value; provided that any consideration not constituting Replacement Assets received by the Company or any of its Restricted Subsidiaries in accordance connection with any Asset Sale permitted to be consummated under this Section 4.10(c) shall constitute Net Cash Proceeds subject to the provisions of Sections 4.10(a) and (b). Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 25 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture Supplemental Indenture. The notice to the Holders shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer. Such notice shall state:
(1) that the Net Proceeds Offer is being made pursuant to this Section 4.10 and that (subject to the provisions hereof) all Notes tendered will be accepted for payment;
(2) the purchase price (including the amount of accrued interest) and the purchase date (which shall be the Net Proceeds Offer Payment Date);
(3) that any Note not tendered will continue to accrue interest if interest is then accruing;
(4) that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a Net Proceeds Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third business day prior to the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the second Business Day preceding the Net Proceeds Offer Date, a facsimile transmission or letter setting forth the agreements governing name of the Holder, the principal amount of the Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and
(7) the circumstances and relevant facts regarding such Net Proceeds Offer. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 in exchange for cash. To the extent Holders properly tender Notes and holders of Pari Passu IndebtednessIndebtedness properly tender such Pari Passu Indebtedness in an amount exceeding the Net Proceeds Offer Amount, the tendered Notes and Pari Passu Indebtedness will be purchased on a pro rata basis (based on amounts tendered) in an aggregate amount equal to the Net Proceeds Offer Amount (if any). A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as applicable.
(e) may be required by law. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the aggregate amount provisions of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsany securities laws or regulations conflict with this Section 4.10, the Company may use any remaining Excess Proceeds for any purpose shall comply with the applicable securities laws and regulations and shall not prohibited be deemed to have breached its obligations under this Section 4.10 by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerovirtue thereof.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any Asset Sale unless:
unless (1i) the Company or any its Subsidiaries receive consideration at the time of its Restricted Subsidiaries, as the case may be, receives consideration such Asset Sale at least equal to the Fair Market Value (as determined of the assets included in such Asset Sale, provided the aggregate Fair Market Value of the consideration received from an Asset Sale that is not in the form of cash or Cash Equivalents shall not, when aggregated with the Fair Market Value of all other non-cash or consideration received by the Company and its Subsidiaries from all previous Asset Sales since the Issue Date that has not, prior to such date, been converted into cash or Cash Equivalents, exceed 5% of the Consolidated Tangible Assets of the Company at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from such Asset Sale received by under consideration; and provided, further, that with respect to any Asset Sale to Affiliates the Company shall receive consideration consisting of not less than 75% cash or Cash Equivalents and (ii) the Company delivers to the Trustee an Officers’ Certificate certifying that such Asset Sale complies with clause (i). The amount (without duplication) of any Indebtedness (other than Subordinated Indebtedness) of the Company or such Restricted Subsidiary that is expressly assumed by the transferee in such Asset Sale and with respect to which the Company or such Subsidiary, as the case may be, is in unconditionally released by the form holder of such Indebtedness, shall be deemed to be cash or Cash Equivalents; providedEquivalents for purposes of clause (ii) and shall also be deemed to constitute a repayment of and a permanent reduction in, however, to the extent that the assets sold in amount of such Asset Sale were part Indebtedness for purposes of the Collateral, the assets received as following paragraph (b). If at any time any non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt received by the Company or a Restricted any Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (B) other than interest received with respect to any securitiessuch non-cash consideration), notes then the date of such conversion or other obligations or other disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be applied in accordance with this Section 4.16. A transfer of assets or property received by the Company to a Subsidiary or any Restricted by a Subsidiary from such transferee that are converted by to the Company or such Restricted to a Subsidiary into cash or Cash Equivalents, or by their terms are required will not be deemed to be satisfied for cash or Cash Equivalents (an Asset Sale and a transfer of assets that constitutes a Restricted Investment and that is permitted under Section 4.03 will not be deemed to be an Asset Sale. In the extent event of the cash or Cash Equivalents received), in each case within 180 days following transfer of substantially all (but not all) of the receipt thereof; and
(C) any Designated Noncash Consideration received by property and assets of the Company or any of and its Restricted Subsidiaries as an entirety to a Person in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant a transaction permitted under Section 5.01 the successor corporation shall be deemed to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at have sold the time properties and assets of the receipt Company and its Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such Designated Noncash Consideration (with deemed sale as if it were an Asset Sale. In addition, the Fair Market Value of each item such properties and assets of Designated Noncash Consideration being measured at the time received without giving effect Company or its Subsidiaries deemed to subsequent changes in value); be sold shall each be deemed to be Cash Equivalents.
(b) Within 365 days after Net Available Proceeds for purposes of this covenant. If the Company’s Company or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Subsidiary engages in an Asset Sale, the Company or a Restricted Subsidiarysuch Subsidiary may either, at its optionno later than 360 days after such Asset Sale, may (i) apply an amount equal to all or any of the Net Cash Available Proceeds from therefrom to repay amounts outstanding under the Revolving Credit Facility or any other Indebtedness (other than Subordinated Indebtedness) of the Company or any Subsidiary; provided, in each case, that the related loan commitment (if any) is thereby permanently reduced by the amount of such Indebtedness so repaid or (ii) invest all or any part of the Net Available Proceeds thereof in properties and assets that replace the properties or assets that were the subject of such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale in other properties or assets that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto will be used in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate business of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes Subsidiaries as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, it existed on the Issue Date. The amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Available Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) this paragraph will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. .” When the aggregate amount of Excess Proceeds equals or exceeds $50.0 10.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to purchase, from all Holders of the Senior Notes, an aggregate principal amount of Senior Notes and, equal to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the such Excess Proceeds as follows: The Company (or the Subsidiary Guarantor, as applicable) to will make an offer to purchase such Pari Passu Indebtedness with (a “Net Proceeds Offer”) from all Holders of the proceeds from any Asset Sale, to purchase Securities the maximum principal amount (expressed as a multiple of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies $1,000) of Securities that may be purchased out of the amount (the “Payment Amount”) of such Excess Proceeds, at an . The offer price prices for the Securities will be payable in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness Securities tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessand Liquidated Damages, if any, as may be provided by to the terms of date such IndebtednessNet Proceeds Offer is consummated (the “Offered Price”), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) . To the extent that the aggregate amount aggregated Offered Price of Notes and Pari Passu Indebtedness so properly Securities tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsPayment Amount relating thereto (such shortfall constituting a “Net Proceeds Deficiency”), the Company may use any remaining Excess such Net Proceeds Deficiency, or a portion thereof, for any purpose not prohibited by this Indenturegeneral corporate purposes, subject to the limitations of Section 4.03. If the aggregate principal amount Offered Price of Notes surrendered Securities validly tendered and not withdrawn by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess ProceedsPayment Amount, selection of Notes for purchase Securities to be purchased will be made by the Company in accordance with Section 3.04(f)selected on a pro rata basis. Upon completion of such Asset Sale Net Proceeds Offer, the amount of Excess Proceeds remaining shall be reset at zero. The Company will not permit any Subsidiary to enter into or suffer to exist any agreement that would place any restriction of any kind (other than pursuant to law or regulation) on the ability of the Company to make a Net Proceeds Offer following any Asset Sale. The Company will comply with Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder, if applicable, in the event that an Asset Sale occurs and the Company is required to purchase Senior Notes as described above.
Appears in 1 contract
Samples: Indenture (Independent Gasoline & Oil Co of Rochester)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; andof;
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such the applicable Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or and/or Cash Equivalents; providedEquivalents and shall be received at the time of such disposition, however, to the extent provided that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration following shall not be Excluded Assets and are required deemed to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For cash solely for purposes of this clause (2) the amount of:):
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and for which the Company or and its Restricted Subsidiaries receive a written release from the creditors with respect to such Restricted Subsidiary, as the case may be, from further liability thereforliabilities;
(B) any securities, promissory notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 180 days of the receipt thereof (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Valuefair market value, when taken together with all other Designated Noncash Consideration received pursuant to this subclause clause (C) that is at that time outstanding, not to exceed 2.015% of Total Assets, calculated Assets at the time of the receipt of such Designated Noncash Consideration (A) with the Fair Market Value fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value); shall each be deemed value and (B) with respect to be Cash Equivalents.
(b) Within 365 days after any Designated Noncash Consideration in excess of $15.0 million, the Board of Directors of the Company’s or any Restricted Subsidiary’s receipt determination of the Net Cash Proceeds fair market value of any such Designated Noncash Consideration must be based upon an opinion or appraisal issued by an Independent Qualified Party; and
(3) upon the consummation of an Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale (or any portion within 365 days of receipt thereof) as follows:
(1A) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateralto prepay, to repay, prepay, defease, redeem, reduce, redeem or purchase Senior Debt of any Issuer or otherwise retire any Guarantor (and to correspondingly reduce commitments with respect thereto in the each case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateraland, in the case of an Asset Sale any such prepayment, repayment, redemption or purchase of Senior Debt under any revolving credit facility, cause a corresponding permanent reduction in the availability and commitments under such revolving credit facility in the amount of the principal prepaid, repaid, redeemed or purchased,
(B) to reinvest in Productive Assets, or
(C) a combination of prepayment and investment permitted by a Restricted Subsidiary the foregoing clauses (A) and (B); provided that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowingsclause (3)(B) Indebtedness above a binding commitment to reinvest in Productive Assets shall be treated as a permitted application of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds from the date of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant such commitment to the Security Documents reasonably promptly 545th day after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any the applicable Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), Sale so long as determined by the Company in its sole discretion, or such Restricted Subsidiary enters into such commitment with the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided good faith expectation that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net to satisfy such commitment on or prior to the 545th day after receipt of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds of the applicable Asset Sale (an “Acceptable Commitment”) and, in the event such Acceptable Commitment is later canceled or terminated for any reason before such Net Cash Proceeds are so applied, the Company or such Restricted Subsidiary enters into another Acceptable Commitment within six months of such cancellation or termination of the prior binding commitment; provided further, however, that the Company or such Restricted Subsidiary may only rely on the six-month extension provided for entering into an Acceptable Commitment on one occasion with respect to any Asset Sale (and the failure to reinvest in Productive Assets prior to the end of such six-month period shall mean the Net Cash Proceeds shall not be repatriated treated as having been applied pursuant to clause (whether or not such repatriation actually occurs3)(B) above).
(d) . Pending the final application of any such Net Cash Proceeds, the Company and its or such Restricted Subsidiaries Subsidiary may temporarily reduce Indebtedness (including under a revolving Debt Facility) credit facility, if any, or otherwise invest or utilize such Net Cash Proceeds in any manner Cash Equivalents. On the 366th day (as may be extended pursuant to the proviso in the preceding paragraph) after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not prohibited by this Indenture. Any to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clause (3)(A), (3)(B) or (3)(C) of the preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been so applied on or invested as provided and within the time period set forth in Section 4.10(bbefore such Net Proceeds Offer Trigger Date (each, a “Net Proceeds Offer Amount”) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) Issuers to make an offer to purchase such Pari Passu Indebtedness with (the proceeds “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from any Asset Saleall Holders on a pro rata basis, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of with the Excess Proceeds, Net Proceeds Offer Amount at an offer a price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, to the date of purchase; provided, however, that if at any time any noncash consideration (including any Designated Noncash Consideration) received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such noncash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.10; provided further that the Issuers may, if required by the terms of any Indebtedness that ranks pari passu with the Notes, contemporaneously make such Indebtedness)Net Proceeds Offer to all holders of such pari passu Indebtedness containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem such Indebtedness with the proceeds of sales of assets, in accordance which case the Net Proceeds Offer Amount will be paid on a pro rata basis to all Holders of Notes together with holders of such other pari passu Indebtedness. Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $15.0 million, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by the Company and its Restricted Subsidiaries aggregate at least $15.0 million, at which time the Issuers shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $15.0 million or more shall be deemed to be a Net Proceeds Offer Trigger Date). Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 30 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture Section 3.09. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 in exchange for cash. To the agreements governing extent Holders properly tender Notes in an amount exceeding the Pari Passu IndebtednessNet Proceeds Offer Amount, Notes of tendering Holders will be purchased on a pro rata basis (based on amounts tendered) together with the Holders of any other pari passu Indebtedness subject to such Net Proceeds Offer. A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as applicable.
(e) may be required by law. To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company Issuers may use any remaining Excess Net Proceeds Offer Amount for general corporate purposes or for any other purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero. The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that compliance by the Issuers with the provisions of any securities laws or regulations conflicts with the provisions of this Section 4.10, such compliance shall be deemed not to be a breach of the Issuers’ obligations under this Section 4.10.
Appears in 1 contract
Samples: Indenture (Neff Finance Corp.)
Limitation on Asset Sales. (a) The Prior to the Effective Date, the Company shall not consummate an Asset Sale except to the extent necessary to consummate the Recapitalization and the transactions contemplated by the Escrow Agreement including the Assumption and related release to Unilab of the Escrowed Property. From and after the Effective Date, the Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company's Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on -------- the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesNotes and other than liabilities consisting of Disqualified Capital Stock)
(i) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and from which the Company and its Restricted Subsidiaries are unconditionally released or (ii) in respect of which neither the Company nor any Restricted Subsidiary following such Restricted Subsidiary, as the case may be, from further liability therefor;
sale has any obligation and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are promptly, but in no event more than 60 days after receipt, converted by the Company or such Restricted Subsidiary Subsid iary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents Equiva xxxxx received), in each case within 180 days following the receipt thereofshall be deemed to be cash for purposes of this provision; and
(C3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 365 days of receipt thereof either:
(a) to prepay any Designated Noncash Consideration Senior Debt or Guarantor Senior Debt and, in the case of any Senior Debt or Guarantor Senior Debt under any revolving credit facility, effect a permanent reduction in the avail ability under such revolving credit facility;
(b) to reinvest in Productive Assets; or
(c) a combination of prepayment and investment permitted by the foregoing clauses (3)(a) and (3)(b). On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence (each, a "Net Pro ceeds Offer Trigger Date"), such aggregate amount of Net Cash -------------------------------- Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence (each a "Net Proceeds Offer Amount") shall be ------------------------- applied by the Company or such Restricted Subsidiary to make an offer to purchase for cash (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer ------------------ ------------------ Payment Date") not less than 30 nor more than 45 days following the applicable ------------ Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that --- ---- amount of Notes equal to the Net Proceeds Offer Amount at a price in cash equal to 100% of the principal amount of the Securities to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, -------- ------- that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest, dividends or other earnings received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accor dance with this covenant. Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $10.0 million, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by the Company and its Restricted Subsidiaries aggregates at least $10.0 million, at which time the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $10.0 million or more shall be deemed to be a Net Proceeds Offer Trigger Date). Notwithstanding the immediately preceding paragraphs of this Section 4.16, the Company and its Restricted Subsidiaries shall be permitted to consummate an Asset Sale without complying with such paragraphs to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Productive Assets; and
(2) such Asset Sale is for at least fair market value (as determined in good faith by the Company's Board of Directors); provided that any -------- consider ation not constituting Productive Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Valuepermitted to be consummated under this paragraph shall constitute Net Cash Proceeds and shall be subject to the provisions of the two preceding paragraphs; provided, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt entering into such transaction or -------- immediately after giving effect thereto, no Default or Event of such Designated Noncash Consideration (with the Fair Market Value Default shall have occurred or be continuing or would occur as a consequence thereof. Notice of each item of Designated Noncash Consideration being measured at the time received without giving effect Net Proceeds Offer pursuant to subsequent changes in value); this Section 4.16 shall each be deemed mailed or caused to be Cash Equivalents.mailed, by first class mail, by the Company within 30 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(b1) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of that the Net Cash Proceeds Offer is being made pursuant to this Section 4.16 and that all Securities tendered will be accepted for payment; provided, however, that if the principal amount of any Asset SaleSecurities tendered in -------- ------- the Net Proceeds Offer exceeds the aggregate amount of Net Proceeds Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis;
(2) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by applicable law);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a Restricted Subsidiarystatement that such Holder is withdrawing his election to have such Security purchased; and
(7) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpur chased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, at its optionthe Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, may apply (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be pur chased and (iii) deliver to the Trustee Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereofprice, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is thereon set forth in the form notice of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition Offer. Any Security not so accepted shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt mailed by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary Holder thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) . For purposes of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds4.16, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph Trustee shall apply to such amounts so long, but only so long, act as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantPaying Agent. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess Net Proceeds Offer Amount for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f)general corporate purposes. Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.16, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.16 by virtue thereof.
Appears in 1 contract
Samples: Indenture (Unilab Corp /De/)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiariesthe applicable Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2as determined in good faith by the Company's Board of Directors), (ii) at least 75.075% of the consideration from such Asset Sale received for the assets sold by the Company or such Restricted the Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to that (A) notes received by the extent Company as -------- ------- consideration for an Asset Sale that are converted into cash or Cash Equivalents immediately following the assets sold in consummation of such Asset Sale were part or (B) the assumption by the purchaser of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes an Asset Sale of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated subordinate to the NotesSecurities) shall, in each case of the immediately preceding clauses (A) and (B), be deemed to be cash or Cash Equivalents at the time of such Asset Sale in an amount equal to, in the case of clause (A), the amount of cash or Cash Equivalents realized on such conversion and, in the case of clause (B), the amount of the liabilities so assumed, as reflected on the balance sheet of the Company, and (iii) following the consummation of an Asset Sale, the Company shall, or shall cause such Subsidiary, within 365 days of receipt thereof either (A) to apply the Net Cash Proceeds related to such Asset Sale to prepay any Indebtedness that are extinguished by its terms is not subordinate to the Securities, (B) to make a Permitted Investment or an investment in connection with properties and assets that replace the transactions properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in a Related Business (collectively, "Replacement Assets") or (C) a combination of prepayment and investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 365th day after an Asset Sale, or such earlier date, if any, as the Board of Directors of the Company or of such Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset SaleSale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have not been applied on or that are assumed by before the transferee applicable Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of any such assets, property or Capital Stockthe next preceding sentence (or, in the case of a Net Proceeds Offer Trigger Date occurring prior to such 365th day, the aggregate amount of Net Cash Proceeds that the Board of Directors has determined not to so apply) (each case, pursuant to an agreement that releases or indemnifies a "Net Proceeds Offer Amount") shall be applied by the Company or such Restricted SubsidiarySubsidiary to make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis (and on a pro rata basis with the holders of Indebtedness of the Company that is not by its terms subordinate to the Securities), that amount of Securities equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Securities to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that if at any time any non-cash consideration -------- ------- received by the Company or any Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.17. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $5.0 million resulting from further liability therefor;
one or more Asset Sales (Bat which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $5.0 million, shall be applied as required pursuant to this paragraph). In the event of the transfer of substantially all (but not all) any securitiesof the property and assets of the Company and its Subsidiaries as an entirety to a Person in a transaction per- mitted under Section 5.01, notes or other obligations or other the successor corporation shall be deemed to have sold the properties and assets or property received by of the Company and its Subsidiaries not so transferred for purposes of this Section 4.17, and shall comply with the provisions of this Section 4.17 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or any Restricted Subsidiary from such transferee that are converted by its Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.17. Notwithstanding the two immediately preceding paragraphs, the Company or and its Subsidiaries will be permitted to consummate an Asset Sale without complying with such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (paragraphs to the extent (i) at least 75% of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofconsideration for such Asset Sale constitutes Replacement Assets and (ii) such Asset Sale is for fair market value; and
(C) provided that any Designated Noncash Consideration consideration not -------- constituting Replacement Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the two preceding paragraphs. Notice of each Net Proceeds Offer pursuant to this subclause Section 4.17 shall be mailed or caused to be mailed, by first class mail, by the Company within 25 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(C1) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds Offer is being made pursuant to this Section 4.17 and that all Securities tendered will be accepted for payment; provided, however, that if the principal amount of any Asset SaleSecurities tendered in -------- ------- the Net Proceeds Offer exceeds the Net Proceeds Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis;
(2) the Net Proceeds Offer price (including the amount of accrued interest, if any) and the Net Proceeds Offer Payment Date;
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a Restricted Subsidiarystatement that such Holder is withdrawing his election to have such Security purchased; and
(7) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, at its optionthe Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, may apply (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereofprice, plus the amount of accrued but unpaid interest, if any, on thereon and the Trustee shall promptly authenticate and mail to such Holders new Securities equal in principal amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form unpurchased portion of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition Securities surrendered. Any Securities not so accepted shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt mailed by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary Holder thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) . For purposes of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds4.17, the Trustee shall act as the Paying Agent. Any Net Proceeds Offer shall remain open for at least 20 Business Days (or such longer period as may be required by law) and until the close of business on the Net Proceeds Offer Payment Date. The Company or a Restricted Subsidiaryshall comply with all tender offer rules under state and federal securities laws, as applicableincluding, has entered into but not limited to, Section 14(e) under the Exchange Act and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoingRule l4e-1 thereunder, to the extent applicable to such offer. To the extent that repatriation to the United States provisions of any securities laws or all of regulations conflict with the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) foregoing provisions of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash ProceedsIndenture, the Company shall comply with the applicable securities laws and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required regulations and shall not be deemed to be Excess have breached its obligations under the foregoing provisions of this Indenture by virtue thereof. Upon completion of a Net Proceeds without regard to Offer, the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Net Cash Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes andreset at zero. Accordingly, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly Securities tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess Net Cash Proceeds, any remaining Net Cash Proceeds held by the Trustee shall be returned by the Trustee to the Company and the Company may use any remaining Excess Net Cash Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerogeneral corporate purposes.
Appears in 1 contract
Samples: Indenture (Leslies Poolmart Inc)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2as determined in good faith by the Company's Board of Directors), (ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted SubsidiarySubsidiary (exclusive of indemnities), as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and shall be received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Aa) any liabilities (as shown on the Company’s 's or such Restricted Re- stricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(Bb) any securities, notes or other obligations or other assets or property Obligations received by the Company or any such Restricted Subsidiary from such transferee that are immediately converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
) and (Cc) any Designated Noncash Non-cash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Valuefair market value, taken together with all other Designated Noncash Non-cash Consideration received pursuant to this subclause clause (C) that is at that time outstandingc), not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration $5 million (with the Fair Market Value fair market value of each item of Designated Noncash Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value); , shall each be deemed to be Cash Equivalents.
cash for the purposes of this clause (bii); and provided, further, that the TEK Transaction shall not be subject to this clause (ii), and (iii) Within 365 days after upon the Company’s or any Restricted Subsidiary’s receipt consummation of the Net Cash Proceeds of any an Asset Sale, the Company shall apply directly or through a Restricted Subsidiary, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 270 days of receipt thereof either (A) to repay any Indebtedness ranking at its optionleast pari passu with the Securities and the Guarantees (and in the case of any Indebtedness outstanding under a revolving credit facility, to permanently reduce the amounts that may be reborrowed thereunder by an equivalent amount), with the Net Cash Proceeds received in respect thereof, (B) to reinvest in Productive Assets, or (C) a combination of prepayment, reduction and investment permitted by the foregoing clauses (iii)(A) and (iii)(B); provided that the 75% limitation referred to above shall not apply to any sale, transfer or other disposition of assets in which the cash portion of the consideration received therefor is equal to or greater than what the after-tax net proceeds would have been had such transaction complied with the aforementioned 75% limitation. On the 271st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Amount") shall be applied by the Company to make an offer to repurchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis that amount of Securities equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not Offer Amount at a disposition of Collateral, price equal to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0100% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereofSecurities to be repurchased, plus the amount of accrued but and unpaid interest, if any, on to the amount date of Notes that would otherwise be prepaid;
(4) to make an investment inrepurchase. Notwithstanding the foregoing, purchase or otherwise acquire any one or more businessesif a Net Proceeds Offer Amount is less than $10 million, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form application of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant all Net Proceeds Offer Amounts arising subsequent to the Security Documents reasonably promptly after receipt Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by the Company or a and its Restricted Subsidiary thereof;
(5) to make an investment inSubsidiaries aggregates at least $10 million, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace at which time the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Company shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of a disposition all such deferred Net Proceeds Offer Amounts is equal to $10 million or more shall not be Excluded Assets and are required deemed to be pledged as Collateral a Net Proceeds Offer Trigger Date). To the extent that the aggregate purchase price of Securities tendered pursuant to any Net Proceeds Offer is less than the Security Documents reasonably promptly after receipt by Net Proceeds Offer Amount, the Company or a Restricted Subsidiary thereof; or
(6) any combination Guarantor may use such amount for general corporate purposes. Upon completion of any Net Proceeds Offer, the foregoingNet Proceeds Offer Amount shall be reset to zero. Notwithstanding the two immediately preceding paragraphs, provided, that the Company and its Restricted Subsidiaries will be deemed permitted to have complied consummate an Asset Sale without complying with the provisions described in clause (4) or (5) of this Section 4.10(b) if and such paragraphs to the extent that, within 365 days after (i) at least 75% of the consideration for such Asset Sale constitutes Productive Assets and (ii) such Asset Sale is for fair market value (as determined in good faith by the Company’s or 's Board of Directors); provided that any Restricted Subsidiary’s receipt of such Net Cash Proceeds, consideration not constituting Productive Assets received by the Company or a any of its Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement Subsidiaries in connection with any Asset Sale permitted to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of be consummated under this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the paragraph shall constitute Net Cash Proceeds subject to the provisions of any Asset Sales by a foreign Subsidiary the two preceding paragraphs. In the event of the transfer of substantially all (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would but not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (xall) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), property and if such repatriation assets of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including as an entirety to a Person in a transaction permitted under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within Section 5.01, the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale successor corporation shall be deemed to have been applied sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant. Notice of a Net Proceeds Offer shall be mailed, by first-class mail, by the Company to Holders of Securities at their last registered address not less than 30 days nor more than 60 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section 4.16, that all Securities tendered will be accepted for payment; provided, however, that if the aggregate principal amount of Securities tendered in a Net Proceeds Offer plus accrued interest at the expiration of such offer exceeds the aggregate amount of the Net Proceeds Offer, the Company shall select the Securities to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Securities in denominations of $1,000 or multiples thereof shall be purchased) and that the Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law;
(2) the purchase price (including the amount of accrued interest) and the Net Proceeds Offer Payment Date (which shall be not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date and which shall be at least five Business Days after the Trustee receives notice thereof from the Company);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to a Net Proceeds Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Secu- rity completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day prior to the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Securities such Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Securities purchased; and
(7) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount equal to the unpurchased portion of the Securities surrendered; provided, however, that each Security purchased and each new Security issued shall be in an original principal amount of $1,000 or integral multiples thereof. On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer which are to be purchased in accordance with item (1) above, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the purchase price plus accrued interest, if any. For purposes of this Section 4.16, the Trustee shall act as the Paying Agent. Any amounts remaining after the purchase of Securities pursuant to a Net Proceeds Offer shall be returned by the Trustee to the Company. If an offer is made to repurchase the Securities pursuant to a Net Proceeds Offer, the Company will and will cause its Restricted Subsidiaries to comply with all tender offer rules under state and federal securities laws, including, but not limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to the extent applicable to such offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.16, the Company shall comply with the applicable securities laws and obligations and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted have breached its obligations hereunder by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicablevirtue thereof.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Samples: Indenture (Autotote Corp)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale Sale, unless:
(1) the Company or any of its such Restricted SubsidiariesSubsidiary, as the case may be, receives consideration from such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of or Capital Interests issued or sold (as in each case, such Fair Market Value to be determined at by the time Company on the date of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale); and
(2) except in the case of a Permitted Asset Swap, at least 75.075% of the consideration from such Asset Sale therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Eligible Cash Equivalents; provided, however, to the extent provided that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration following shall not be Excluded Assets and are required deemed to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For cash for purposes of this clause (2Section 4.10(a)(2) the amount ofand for no other purpose:
(A) any liabilities (as shown on reflected in the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orfootnotes thereto, or if incurred Incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected shown on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes footnotes thereto if such incurrence Incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of sheet, as determined by the Company) of the Company or any such Restricted Subsidiary (Subsidiary, other than liabilities that are by their terms subordinated to the Notes, (i) that are extinguished for which the Company and all of its Restricted Subsidiaries have been validly released by all creditors in connection with writing or (ii) in respect of which neither the transactions relating to Company nor any Restricted Subsidiary following such Asset Sale, or that are assumed by the transferee of Sale has any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;obligation,
(B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case ) within 180 365 days following the receipt thereof; closing of such Asset Sale, and
(C) any Designated Noncash Non-cash Consideration received by the Company or any of its such Restricted Subsidiaries Subsidiary in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Non-cash Consideration received pursuant to this subclause clause (C) that is at that time outstanding, not to exceed 2.0no greater than 5.0% of Total Assets, calculated Assets of the Company and its Subsidiaries at the time of the receipt of such Designated Noncash Consideration (Non-cash Consideration, with the Fair Market Value of each item of Designated Noncash Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds of any Asset Sale, the Company or a such Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (Sale, or any portion thereof) as follows:other funds,
(1) if such Net Cash Proceeds are from an Asset Sale to permanently reduce:
(A) obligations under Credit Facilities, or under any senior Debt that is not a disposition of CollateralSecured Debt (and, to repaythe extent the obligations being reduced constitute revolving credit obligations, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): thereto); or
(xB) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness Debt of a Restricted Subsidiary (that is not a Guarantor, other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness Debt owed to the Company or an Affiliate of the Company)another Restricted Subsidiary;
(2) if such Net Cash Proceeds are from to make an Asset Sale Offer; or
(3) to make any combination of (A) an Investment in all or substantially all of the assets of one or more businesses, (B) an Investment in the Capital Interests of one or more businesses, provided that such business is not a disposition Restricted Subsidiary or such Investment results in such business becoming a Restricted Subsidiary, (C) capital expenditures or (D) acquisitions of Collateralother assets, in each of (A) through (D), that are used or useful in a Permitted Business or replace the businesses, properties and/or assets that are the subject of such Asset Sale; provided that, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
this clause (3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and a binding commitment (which may be subject to customary conditions) shall be treated as a permitted application of funds from the date of such commitment so long as the Company or such other Restricted Subsidiary enters into such commitment with the good faith expectation that investment, purchase or other acquisition is thereafter completed such funds will be applied to satisfy such commitment within 180 days after the end of such the 365-day periodperiod described above (an “Acceptable Commitment”); provided, further, that if any Acceptable Commitment is later cancelled or terminated for any reason before such funds are so applied, then, to the extent the 365-day period referred to in the first sentence of this paragraph has lapsed, such unapplied amount shall constitute Excess Proceeds.
(c) Notwithstanding If the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not Sales exceeds the amount invested, expended or applied or invested as provided and within the time period periods set forth in clause (b) of this Section 4.10(b) 4.10, such excess amount will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. .” When the aggregate amount of Excess Proceeds exceeds $50.0 150.0 million, the Company will be required to shall make an offer to all Holders of the Notes, and, if required (or at the Company’s election, if permitted) by the terms of any other senior Debt, to the holders of any such senior Debt (an “Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale), to purchase the maximum aggregate principal amount of the Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies other senior Debt that is a minimum of $2,000 or an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds, Proceeds at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof, plus accrued and unpaid interest to (to, but not including) , the date of purchase (or such lesser price with respect to fixed for the Pari Passu Indebtedness, if any, as may be provided by the terms closing of such Indebtedness)offer, in accordance with the procedures set forth in this Indenture or Indenture. The Company will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the agreements governing date that Excess Proceeds exceed $150.0 million by sending the Pari Passu Indebtednessnotice required pursuant to the terms of this Indenture, as applicablewith a copy to the Trustee.
(ed) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly other senior Debt tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by general corporate purposes, subject to other covenants contained in this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered senior Debt tendered by Holders or lenders, collectively, such holders thereof exceeds the amount of Excess Proceeds, selection the Trustee shall select the Notes and the agent for such other senior Debt, as applicable, shall select such other senior Debt to be purchased by lot, pro rata or by any other method customarily authorized by clearing systems (so long as an authorized denomination results therefrom) based on the accreted value or principal amount of the Notes for purchase will be made by or such other senior Debt tendered. Additionally, the Company may, at its option, make an Asset Sale Offer using funds in accordance with Section 3.04(f)an amount equal to the amount of Net Proceeds from any Asset Sale at any time after consummation of such Asset Sale; provided that such Asset Sale Offer shall be in an aggregate amount of not less than $10.0 million. Upon completion of such any Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(e) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Debt outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.
(f) Notwithstanding anything to the contrary in this Section 4.10, all references herein to “Net Proceeds” and “Excess Proceeds” shall be deemed to mean cash in an amount equal to the amount of Net Proceeds or Excess Proceeds, as applicable, but not necessarily the actual cash received from the relevant Asset Sale. The Company and its Subsidiaries shall have no obligation to segregate, trace or otherwise identify Net Proceeds or Excess Proceeds (other than the amounts thereof), it being agreed that cash is fungible and that the Company’s obligations under this Section 4.10 may be satisfied by the application of funds from other sources.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case may be) receives consideration (including by way of relief from, or any Person assuming responsibilities for, any liabilities, contingent or otherwise) at the time of the Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of; and
(2) at least 75% of the aggregate consideration received by the Company and its Restricted Subsidiaries in the Asset Sale is in the form of cash or Cash Equivalents. For purposes of this provision, each of the following will be deemed to be cash:
(a) any liabilities, as shown on the Company’s or any Restricted Subsidiary’s most recent balance sheet, of the Company or such Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated in right of payment to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Subsidiary from further liability;
(b) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are, within 180 days after the Asset Sale, converted by the Company or such Subsidiary into cash, to the extent of the cash received in that conversion; and
(c) accounts receivable of a business retained by the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to following the Fair Market Value sale of such business, provided that such accounts receivable (as determined at i) are not past due more than 90 days and (ii) do not have a payment date greater than 120 days from the time date of contractually agreeing to the invoices creating such accounts receivable. Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Company (or any Restricted Subsidiary) may apply those Net Proceeds at its option to any combination of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount offollowing:
(AI) any liabilities to prepay, repay, redeem or repurchase Senior Debt;
(as shown on II) to invest in or acquire Additional Assets; or
(III) to make capital expenditures in respect of the Company’s or such its Restricted Subsidiary’s most recent balance sheet Subsidiaries’ Oil and Gas Business. The requirement of clause (II) or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company(III) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required preceding paragraph shall be deemed to be satisfied for cash if a bona fide binding contract committing to make the investment, acquisition or Cash Equivalents (expenditure referred to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received therein is entered into by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (Person other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company within the time period specified in the preceding paragraph and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases Net Proceeds are at or above 100.0% of the principal amount thereof), or (iii) making an offer (subsequently applied in accordance with such contract within six months following the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with date such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition agreement is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantinto. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its or any Restricted Subsidiaries Subsidiary of the Company may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such the Net Cash Proceeds in any manner that is not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale Sales that is are not applied or invested as provided and within in the time period set forth in Section 4.10(b) preceding paragraph will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to .” On the 366th day after an Asset Sale Offer made (or, at the Company’s option, any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When earlier date), if the aggregate amount of Excess Proceeds then exceeds $50.0 20.0 million, the Company will be required to make an offer (“Asset Sale Offer”) Offer to all Holders of Notes andNotes, to the extent required by the terms of other Pari Passu Indebtedness, and to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Salethen outstanding, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an . The offer price in cash in an amount any Asset Sale Offer will be equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessand Additional Interest, if any, as may thereon to the Settlement Date, subject to the right of Holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the Settlement Date, and will be provided by the terms payable in cash. If any Excess Proceeds remain after consummation of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess ProceedsOffer, the Company or any Restricted Subsidiary may use any remaining those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, selection of the Trustee will select the Notes for purchase will and such Pari Passu Indebtedness to be made purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company Trustee so that only Notes in accordance with Section 3.04(fdenominations of $2,000, or integral multiples of $1,000 in excess of $2,000, shall be purchased). Upon surrender of a Note that is repurchased in part, the Issuers shall issue in the name of the applicable Holder and the Trustee shall authenticate for such Holder at the expense of the Issuers a new Note equal in principal amount to the non-repurchased portion of the Note surrendered. Upon completion of such each Asset Sale Offer, the amount of Excess Proceeds shall will be reset at zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.10, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under such provisions by virtue of such compliance.
Appears in 1 contract
Samples: Indenture (EV Energy Partners, LP)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, consummate make any Asset Sale unless:
unless (1i) the Company or any of its the Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such sale or other disposition at least equal to the Fair Market Value of the assets sold or disposed of as determined by the good faith judgment of the Board of Directors evidenced by a Board Resolution and (as ii) at least 80% of the consideration received for such sale or other disposition consists of cash or cash equivalents or the assumption of unsubordinated Indebtedness; provided that any securities, notes or other obligations issued by an Investment Grade Company with a Total Equity Market Capitalization in excess of $25 billion determined at the time of contractually agreeing any commitment to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from effect any such Asset Sale is entered into which are received by the Company or such the Restricted Subsidiary, as the case may be, is in and are converted within 180 days thereof into cash or cash equivalents shall be deemed to be cash or cash equivalents; provided further that the form amount of cash or Cash Equivalents; provided, however, to cash equivalents realized upon the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee sale of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations must be included within the amount of Net Cash Proceeds for purposes of clause (i)(B) of the next paragraph. The Company shall, or other assets or property received by shall cause the relevant Restricted Subsidiary to, within 270 days after the date of receipt of the Net Cash Proceeds from an Asset Sale, (i) (A) apply an amount equal to such Net Cash Proceeds to permanently repay unsubordinated Indebtedness of the Company or Indebtedness of any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received)Subsidiary, in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by owing to a Person other than the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market ValueSubsidiaries, taken together with all other Designated Noncash Consideration received pursuant to this subclause or (CB) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to if the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateralexceed $15 million, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied to make an offer to purchase (net an "Offer to Purchase") from the Holders on a pro rata basis an aggregate principal amount of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any Notes equal to such Net Cash Proceeds, at a purchase price equal to 100% of the principal amount of the Notes, plus, in each case, accrued and unpaid interest to the date of purchase and less the product of (a) the Market Value per share of the Common Stock of the Company and (b) the number of shares (including any portion of a share) of such Common Stock determined by dividing $50 by the Market Price of the Common Stock for each $1,000 in principal amount of Notes accepted for purchase by the Company (the "Offer to Purchase 72 Payment"), provided that the Company shall not be obligated to make any Offer to Purchase after it has made one or more Offers to Purchase, which Offer or Offers to Purchase, in the aggregate, were for an aggregate principal amount of Notes equal to the aggregate principal amount of Notes issued on the Exchange Date (regardless of the actual aggregate principal amount of Notes actually tendered in such Offer or Offers to Purchase), or (C) if the Company has made sufficient Offers to Purchase such that it has satisfied its obligation as described in the final proviso to clause (B), invest an equal amount, or the amount not so applied pursuant to clause (A), in property or assets of a nature or type or that are used in a business (or in a company having property and assets of a nature or type, or engaged in a business) similar or related to the nature or type of the property and assets of, or the business of, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness existing on the date of such investment (including under as determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a revolving Debt FacilityBoard Resolution) or otherwise invest or utilize and (ii) apply (no later than the end of the 270-day period referred to above) such excess Net Cash Proceeds (to the extent not applied pursuant to clause (i)) as provided in the following paragraphs of this Section 1017. The amount of such Net Cash Proceeds required to be applied (or to be committed to be applied) during such 270-day period referred to above in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is the preceding sentence and not applied or invested as provided and within so required by the time end of such period set forth in Section 4.10(b) will be deemed to shall constitute “"Excess Proceeds”; provided". If, that as of the first day of any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When calendar month, the aggregate amount of Excess Proceeds exceeds not theretofore subject to an Excess Proceeds Offer (as defined below) totals at least $50.0 10 million, the Company will be required to must, not later than the 30th Business Day thereafter, make an offer (“Asset Sale an "Excess Proceeds Offer”") to all purchase from the Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make on a pro rata basis an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum aggregate principal amount of Notes and any such Pari Passu Indebtedness equal to which the Asset Sale Offer applies that may be purchased out of the Excess ProceedsProceeds on such date, at an offer a purchase price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness plus Notes, plus, in each case, accrued and unpaid interest to the date of purchase less the product of (but not includinga) the Market Value per share of the Common Stock of the Company and (b) the number of shares (including any portion of a share) of such Common Stock determined by dividing $50 by the Market Price of the Common Stock for each $1,000 in principal amount of Notes accepted for purchase by the Company (the "Excess Proceeds Payment"). The Company shall commence an Offer to Purchase or an Excess Proceeds Offer by mailing a notice to the Trustee and each Holder stating: (i) that the Offer to Purchase or Excess Proceeds Offer, as applicable, is being made pursuant to this Section 1017 and that all Notes validly tendered will be accepted for payment on a pro rata basis; (ii) the purchase price and the date of purchase (or which shall be a Business Day no earlier than 30 days nor later than 60 days from the date such lesser price with respect notice is mailed) (the "Offer Payment Date"); (iii) that any Note not tendered will continue to accrue interest pursuant to its terms; (iv) that, unless the Pari Passu Indebtedness, if any, as may be provided by Company defaults in the terms payment of such Indebtedness), in accordance with the procedures set forth in this Indenture Offer to Purchase Payment or the agreements governing the Pari Passu IndebtednessExcess Proceeds Payment, as applicable.
, any Note accepted for payment pursuant to the Offer to Purchase or the Excess Proceeds Offer, as applicable, shall cease to accrue interest on and after the applicable Offer Payment Date; (ev) To that Holders electing to have a Note purchased pursuant to the Offer to Purchase or the Excess Proceeds Offer, as applicable, will be required to surrender the Note, together with the form entitled "Option of the Holder to Elect Purchase" on the reverse side of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day immediately preceding the applicable Offer Payment Date; (vi) that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the third Business Day immediately preceding the applicable Offer Payment Date, a telegram, facsimile transmission or letter setting forth the name of such Holder, 73 the principal amount of Notes delivered for purchase and a statement that such Holder is withdrawing his election to have such Notes purchased; and (vii) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; provided that each Note purchased and each new Note issued shall be in a principal amount of $1,000 or integral multiples thereof. On the applicable Offer Payment Date, the Company shall (i) accept for payment on a pro rata basis Notes or portions thereof tendered pursuant to the Offer to Purchase or the Excess Proceeds Offer, as applicable; (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so accepted; and (iii) deliver, or cause to be delivered, to the Trustee all Notes or portions thereof so accepted together with an Officer's Certificate specifying the Notes or portions thereof accepted for payment by the Company. The Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall upon Company Order promptly authenticate and mail to such Holders a new Note equal in principal amount to any unpurchased portion of the Note surrendered; provided that each Note purchased and each new Note issued shall be in a principal amount of $1,000 or integral multiples thereof. With respect to any Excess Proceeds Offer, to the extent that the aggregate principal amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes. The Company shall publicly announce the results of the Excess Proceeds Offer as soon as practicable after the Offer Payment Date. For purposes of this Section 1017, the Trustee shall act as the Paying Agent. The Company shall comply with Rule 14e-1 under the Exchange Act and any purpose not prohibited by this Indenture. If other securities laws and regulations thereunder to the aggregate principal amount of Notes surrendered by Holders thereof extent such laws and other Pari Passu Indebtedness surrendered by Holders or lendersregulations are applicable, collectively, exceeds in the amount of Excess Proceeds, selection of Notes for purchase will be made by event that the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of undertakes an Offer to Purchase or Excess Proceeds shall be reset at zeroOffer under this Section 1017.
Appears in 1 contract
Samples: Indenture (World Access Inc /New/)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company’s Board of Directors);
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or cash, Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received Equivalents and/or Replacement Assets (as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company defined below) (or a Restricted Subsidiary combination thereof. For purposes ) and is received at the time of this clause (2) the amount of:such disposition; provided that
(A) the amount of any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) the fair market value of any securities, notes or other obligations securities or other assets or property received by the Company or any such Restricted Subsidiary from in exchange for any such transferee assets that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofafter such Asset Sale; and
(C) any Designated Noncash Consideration received by of the Company or any of its Restricted Subsidiaries assets described in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause clauses (iii)(B) and (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.cash for purposes of this provision; and
(biii) Within 365 days after upon the Company’s or any Restricted Subsidiary’s receipt consummation of the Net Cash Proceeds of any an Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale (or any portion thereof) as followswithin 365 days of receipt thereof either:
(1A) if such Net Cash Proceeds are from an Asset Sale that is not to repay (i) any Obligations under the Credit Agreement and effect a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto permanent reduction in the case of revolving borrowings): availability under such Credit Agreement and (xii) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness Obligations of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3B) to repay, prepay, defease, redeem, reduce, purchase invest or otherwise retire (commit to invest in properties and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, properties and assets and/or properties that are were the subject to of such Asset Sale; provided, Sale or in properties and assets (including Capital Stock) that will be used in the assets acquired with the Net Cash Proceeds business of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed as existing on the Issue Date or in businesses reasonably related thereto (“Replacement Assets”);
(C) to have complied with acquire or commit to acquire all or substantially all of the provisions described assets of, or a majority of the voting Capital Stock of a Permitted Business; and/or
(D) a combination of prepayment and investment permitted by the foregoing clauses (iii)(A) through (iii)(C); provided that in clause the case of a commitment under clauses (4B) or and (5C) of this Section 4.10(b) if and above made prior to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end expiration of such 365-day period, such investment or acquisition shall be deemed to comply with this covenant if consummated within six months after such commitment.
(cb) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of When the Net Cash Proceeds of any from Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within in the time period set forth in Section 4.10(b) will be deemed to constitute preceding paragraph total $5.0 million or more (each, a “Excess ProceedsNet Proceeds Offer Trigger Date”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million), the Company will be required to will, within 30 days, make an offer to purchase (the “Asset Sale Net Proceeds Offer”) to all Holders of Notes and, to the extent required by the terms of other any Pari Passu IndebtednessDebt, an offer to purchase to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with Debt, on a date (the proceeds “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from all Holders (and holders of any Asset SalePari Passu Debt) on a pro rata basis, to purchase the maximum principal that amount of Notes Securities (and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount Debt) equal to 100.0the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes Securities (and Pari Passu Indebtedness Debt) to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; provided, however, that if at any time any non-cash consideration received by the terms Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than as contemplated by clause 2(b) above and other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this covenant.
(c) In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Article V hereof, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such Indebtedness)properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant.
(d) Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 30 days following the Net Proceeds Offer Trigger Date, in accordance with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Securities in whole or in part in a principal amount of $25 and integral multiples of $25 in excess thereof in exchange for cash. To the agreements governing extent Holders properly tender Securities in an amount exceeding the Pari Passu IndebtednessNet Proceeds Offer Amount, Securities of tendering Holders will be purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as applicablemay be required by law. If any Net Cash Proceeds remain after the consummation of any Net Proceeds Offer, the Company may use those Net Cash Proceeds for any purpose not otherwise prohibited by this Indenture. Upon completion of each Net Proceeds Offer, the amount of Net Cash Proceeds will be reset at zero.
(e) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that the aggregate amount provisions of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsany securities laws or regulations conflict with this Section 4.05 or Section 3.03, the Company may use any remaining Excess Proceeds for any purpose shall comply with the applicable securities laws and regulations and shall not prohibited be deemed to have breached its obligations under this Section 4.05 or Section 3.03 by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerovirtue thereof.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, consummate make any Asset Sale unless:
unless (1i) the Company or any of its such Restricted Subsidiaries, as the case may be, Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value fair market value (as determined at in good faith by the time Board of contractually agreeing Directors as evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee) of the assets subject to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2ii) at least 75.075% of the consideration from for such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash cash, Cash Equivalents or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes or any Guarantee of the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assetsassets (provided, property or Capital Stockthat following such Asset Sale there is no further recourse to the Company and its Restricted Subsidiaries with respect to such liabilities), and (iii) within 12 months of such Asset Sale, the Net Proceeds thereof are (a) invested in each case, pursuant assets related to an agreement that releases or indemnifies the business of the Company or its Restricted Subsidiaries, or (b) used to repay, purchase or otherwise acquire Indebtedness under the New Credit Facility or (c) to the extent not used as provided in clause (a) or (b), applied to make an offer to purchase Notes as described below (an "Excess Proceeds Offer"); provided, that if the amount of Net Proceeds from any Asset Sale not invested or used pursuant to clause (a) or (b) above is less than $5.0 million, the Company shall not be required to make an offer pursuant to clause (c) until the aggregate amount of Excess Proceeds from all Asset Sales exceeds $5.0 million. Pending the final application of any such Net Proceeds, the Company or any Restricted SubsidiarySubsidiary may temporarily reduce Indebtedness under the New Credit Facility or temporarily invest such Net Proceeds in Cash Equivalents. For the purposes of this covenant, as the case may be, from further liability therefor;
following are deemed to be cash: (By) any securities, notes or other obligations or other assets or property securities received by the Company or any Restricted Subsidiary from such the transferee that are promptly converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents and (z) assets related to the extent business of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries received in an exchange of assets transaction; provided that (i) in the event such Asset Sale exchange of assets transaction or series of related exchange of assets transactions (each an "Exchange Transaction") involves an aggregate value in excess of $2.5 million, the terms of such Exchange Transaction shall have been approved by a majority of the disinterested members of the Board of Directors, (ii) in the event such Exchange Transaction involves an aggregate value in excess of $5.0 million, the Company shall have received a written opinion from a nationally recognized independent investment banking firm that the Company has received consideration equal to the fair market value of the assets disposed of and (iii) any assets to be received shall be comparable to those being exchanged as determined in good faith by the Board of Directors. The amount of Net Proceeds not invested, used or applied as set forth in the preceding clauses (a) and (b) constitutes "Excess Proceeds." If the Company elects, or becomes obligated to make an Excess Proceeds Offer, the Company shall offer to purchase Notes having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an principal amount equal to the Net Cash Excess Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility"Purchase Amount"), first, at a purchase price equal to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0100% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the aggregate principal amount thereof, plus the amount of accrued but and unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the purchase date. The Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other must commence such Excess Proceeds Offer not later than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 30 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all expiration of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by 12-month period following the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “produced Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.price for
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at fair market value of 66 -60- the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property Capital Stock sold or issued or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company's Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;such Asset Sale shall be in the form of cash or Cash Equivalents and is received at the time of such disposition; provided that, for purposes of this clause (2) the following will be considered "cash" or "Cash Equivalents":
(Ba) any Senior Debt or Guarantor Senior Debt that is assumed by the transferee of any such assets, to the extent the Company or such Restricted Subsidiary is released from any further liability; and
(b) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case ) within 180 30 days following the receipt thereof; andafter receipt;
(C3) any Designated Noncash Consideration received by upon the Company or any consummation of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from (excluding amounts received and considered as "cash" or "Cash Equivalents" pursuant to clause (2)(a) above) relating to such Asset Sale (or any portion thereof) as followswithin 365 days of receipt thereof either:
(1a) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than repay any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock Senior Debt or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of CollateralSenior Debt and, in the case of an Asset Sale by any Senior Debt or Guarantor Senior Debt under any revolving credit facility, effect a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto permanent reduction in the case of availability under such revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiarycredit facility;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4b) to make an investment in, purchase or otherwise acquire any one or more businesses, in properties and assets (other than working capital assets), that replace the properties or capital expendituresand assets that were the subject of such Asset Sale, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or becomes a Restricted Subsidiary thereof;
(5) to make an as a result of such investment in, purchase and that is engaged primarily in a Permitted Line of Business or otherwise acquire any one or more businesses, in properties and assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not will be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt used by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause a Permitted Business (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b"Replacement Assets"), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.and/or
Appears in 1 contract
Samples: Indenture (Ameristar Casinos Inc)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company's Board of Directors);
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orsheet), if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than (I) contingent liabilities (except to the extent reflected (or reserved for) on a balance sheet of the Company or any Restricted Subsidiary as of the date prior to the date of consummation of such transaction) and (II) liabilities that are by their terms subordinated to the NotesNotes or the Guarantees) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
assets and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted within 90 days by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the so received), shall be deemed to be cash or Cash Equivalents received), in each case within 180 days following the receipt thereoffor purposes of this provision; and
(Ciii) any Designated Noncash Consideration received by upon the Company or any consummation of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale within 180 days of receipt thereof either (or A) to prepay any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Senior Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateraland, in the case of an Asset Sale by any Senior Indebtedness under any Credit Facility, effect a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto permanent reduction in the case of revolving borrowings) Indebtedness of availability under such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Credit Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4B) to make an investment in, purchase or otherwise acquire any one or more businesses, in properties and assets (other than working capital assets)cash, properties Cash Equivalents or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress paymentsinventory) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, properties and assets and/or properties that are were the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offeror in properties and assets that will be used in a Permitted Business ("Replacement Assets"), the amount of Excess Proceeds shall be reset at zero.or ------------------
Appears in 1 contract
Samples: Indenture (Everest One Ipa Inc)
Limitation on Asset Sales. (a) The Prior to the occurrence of the Fall-Away Event, the Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiaries, as the case may be, such Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale, (as determined at the time of contractually agreeing ii) immediately before and immediately after giving effect to such Asset Sale) , no Default or Event of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
Default shall have occurred and be continuing and (2iii) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary therefor is in the form of cash paid at the closing thereof, provided, however, that this clause (iii) shall not apply if, after giving effect to such Asset Sale, the aggregate principal amount of all notes or similar debt obligations and Fair Market Value of all equity securities received by the Company from all Asset Sales since September 25, 2000 (other than such notes or similar debt obligations and such equity securities converted into or otherwise disposed of for cash and applied in accordance with the second succeeding sentence) would not exceed 2.5% of Consolidated Tangible Assets at such time. The amount (without duplication) of any (x) Indebtedness (other than Subordinated Indebtedness) of the Company or such Subsidiary that is expressly assumed by the transferee in such Asset Sale and with respect to which the Company or such Subsidiary, as the case may be, is in unconditionally released by the form holder of such Indebtedness and (y) any notes, securities or similar obligations or items of property received from such transferee that are immediately converted, sold or exchanged by the Company or such Subsidiary for cash or Cash Equivalents; provided, however, (to the extent that the assets sold in such Asset Sale were part of the Collateralcash actually so received), the assets received as shall be deemed to be cash for purposes of this Section 4.12. If at any time any non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt received by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then the date of such conversion or disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net Proceeds thereof shall be applied in accordance with this Section 4.12. A transfer of assets by the Company to a Wholly Owned Subsidiary or by a Wholly Owned Subsidiary to the Company or to another Wholly Owned Subsidiary will not be deemed to be an Asset Sale, and a transfer of assets that constitutes a Restricted Payment and that is permitted under Section 4.10 hereof will not be deemed to be an Asset Sale.
(Bb) any securitiesPrior to the occurrence of the Fall-Away Event, notes or other obligations or other assets or property received by if the Company or any Restricted Subsidiary from such transferee that are converted by engages in an Asset Sale, the Company or such Restricted Subsidiary into cash shall, no later than 360 days after such Asset Sale, (i) apply all or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent any of the cash Net Proceeds therefrom to repay Indebtedness that ranks pari passu with the Notes and is secured by the assets disposed of in the Asset Sale or Cash Equivalents received)to repay Bank Debt in accordance with the applicable provisions thereof, (ii) invest all or any part of the Net Proceeds therefrom in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by lines of business of the Company or any of its Restricted Subsidiaries in immediately prior to such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause investment or (Ciii) that is at that time outstanding, not to exceed 2.0% any combination of Total Assets, calculated at the time of the receipt clauses (i) and (ii) above. The amount of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes Net Proceeds not applied or invested as provided in value); shall each be deemed to be Cash Equivalents.
this paragraph (b) Within 365 days after will constitute “Excess Proceeds.”
(c) Prior to the Company’s or any Restricted Subsidiary’s receipt occurrence of the Net Cash Fall-Away Event, when the aggregate amount of Excess Proceeds of any Asset Saleequals or exceeds $5,000,000, the Company or a Restricted Subsidiaryshall be required to make an offer to purchase (an “Asset Sale Offer”) from all Holders, at its option, may apply an aggregate principal amount of Notes equal to the Net Cash amount of such Excess Proceeds from such Asset Sale (or any portion thereof) as follows:
(1i) if such Net Cash Proceeds are from The Company shall make an Asset Sale that is not a disposition of Collateral, Offer to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (all Holders in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, 4.12 to purchase the maximum principal amount (expressed as a multiple of $1,000) of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the amount (the “Asset Sale Payment Amount”) of such Excess Proceeds, at an .
(ii) The offer price for the Notes shall be payable in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness tendered pursuant to such Asset Sale Offer, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessand Additional Interest, if any, as may be provided by to the terms of date such IndebtednessAsset Sale Offer is consummated (the “Asset Sale Purchase Price”), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) Section 4.12. To the extent that the aggregate amount Asset Sale Purchase Price of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Asset Sale Payment Amount relating thereto (such shortfall constituting a “Net Proceeds Deficiency”), the Company may use such Net Proceeds Deficiency, or a portion thereof, for general corporate purposes.
(iii) If the aggregate Asset Sale Purchase Price of Notes validly tendered and not withdrawn by holders thereof exceeds the Asset Sale Payment Amount, Notes to be purchased shall be selected on a pro rata basis.
(iv) Upon completion of such Asset Sale Offer in accordance with the foregoing provisions, the amount of Excess Proceeds with respect to which such Asset Sale Offer was made shall be deemed to be zero. In the event that any other Indebtedness of the Company which ranks pari passu with the Notes (“Other Debt”) requires an offer to purchase to be made to repurchase such Other Debt upon the consummation of an Asset Sale, the Company may apply the Excess Proceeds to both purchase such Other Debt and to make an Asset Sale Offer, provided, that the purchase price of such Other Debt does not exceed 100% of the aggregate principal amount or accreted value thereof plus interest thereon. With respect to any Excess Proceeds, the Company may use shall make the Asset Sale Offer in respect thereof at the same time as the analogous offer to purchase is made pursuant to any remaining Other Debt and the purchase date in respect thereof shall be the same as the purchase date in respect thereof pursuant to any Other Debt. With respect to any Asset Sale Offer effected pursuant to this Section 4.12, to the extent the aggregate principal amount of Notes and Other Debt, if any, tendered pursuant to such Asset Sale Offer and the concurrent offer to purchase with respect to such Other Debt exceeds the Excess Proceeds, such Notes and Other Debt, if any, shall be purchased pro rata based on the aggregate principal amount of such Notes and such Other Debt tendered by each holder thereof.
(d) If the Company is required to make an Asset Sale Offer, the Company shall, within 30 days following the date specified in clause (c) above, notify the Trustee thereof and give written notice of such Asset Sale Offer to each Holder by first-class mail, postage prepaid, at the address of such Holder appearing in the register maintained by the Registrar, stating:
(1) that an Asset Sale Offer is being made pursuant to this Section 4.12;
(2) that such Holders have the right to require the Company to apply the Excess Proceeds to repurchase the Notes at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the purchase date which shall be no earlier than 30 days and not later than 60 days from the date such notice is mailed (the “Excess Proceeds Payment Date”);
(3) that any Note not tendered or accepted for payment will continue to accrue interest;
(4) that any purpose Notes accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Excess Proceeds Payment Date;
(5) that Holders accepting the offer to have their Notes purchased pursuant to the Asset Sale Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day preceding the Excess Proceeds Payment Date;
(6) that Holders will be entitled to withdraw their acceptance of the Asset Sale Offer if the Paying Agent receives, not prohibited by this Indenture. If later than the close of business on the third Business Day preceding the Excess Proceeds Payment Date, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes delivered for purchase and a statement that such Holder is withdrawing his or her election to have such Notes purchased;
(7) that if the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection the Company shall select the Notes to be purchased on a pro rata basis so that the aggregate amount of Notes for purchase so purchased equals the amount of Excess Proceeds (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000 or integral multiples thereof shall be purchased);
(8) that Holders whose Notes are being purchased only in part will be made issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; provided that each Note purchased and each such new Note issued shall be in an original principal amount of $1,000 or an integral multiple thereof;
(9) the calculations used in determining the amount of Excess Proceeds to be applied to the purchase of such Notes;
(10) any other procedures that a Holder must follow to accept an Asset Sale Offer or effect withdrawal of such acceptance; and
(11) the name and address of the Paying Agent. On the Excess Proceeds Payment Date, the Company shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, Notes or portions thereof tendered pursuant to the Asset Sale Offer, (2) deposit with the Paying Agent US legal tender sufficient to pay the purchase price plus accrued and unpaid interest, if any, on the Notes to be purchased or portions thereof, (3) deliver or cause to be delivered to the Trustee Notes so accepted together with an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.04(f)4.12. Upon completion The Paying Agent shall promptly mail to each Holder of Notes so accepted payment in an amount equal to the purchase price for such Notes, and the Company shall execute and issue, and the Trustee shall promptly authenticate and make available for delivery to such Holder, a new Note equal in principal amount to any unpurchased portion of the Notes surrendered; provided that each Note purchased and each such new Note issued shall be in an original principal amount of $1,000 or an integral multiple thereof.
(e) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.12, the amount of Excess Proceeds Company shall comply with the applicable securities laws and regulations and shall not be reset at zerodeemed to have breached its obligations under this Section 4.12 by virtue thereof.
Appears in 1 contract
Samples: Indenture (Healthsouth Corp)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, consummate make any Asset Sale unless:
unless (1i) the Company or any of its such Restricted Subsidiaries, as the case may be, Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value fair market value (as determined at in good faith by the time Board of contractually agreeing Directors as evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee) of the assets subject to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2ii) at least 75.075% of the consideration from for such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash cash, Cash Equivalents or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the New Notes or any Guarantee of the New Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assetsassets (provided, property or Capital Stockthat following such Asset Sale there is no further recourse to the Company and its Restricted Subsidiaries with respect to such liabilities), and (iii) within 12 months of such Asset Sale, the Net Proceeds thereof are (a) invested in each case, pursuant assets related to an agreement that releases or indemnifies the business of the Company or its Restricted Subsidiaries, or (b) used to repay, purchase or otherwise acquire Indebtedness under the Senior Credit Facility or (c) to the extent not used as provided in clause (a) or (b), applied to make an offer to purchase New Notes as described below (an "Excess Proceeds Offer"); provided, that if the amount of Net Proceeds from any Asset Sale not invested or used pursuant to clause (a) or (b) above is less than $5.0 million, the Company shall not be required to make an offer pursuant to clause (c) until the aggregate amount of Excess Proceeds from all Asset Sales exceeds $5.0 million. Pending the final application of any such Net Proceeds, the Company or any Restricted SubsidiarySubsidiary may temporarily reduce Indebtedness under the Senior Credit Facility or temporarily invest such Net Proceeds in Cash Equivalents. For the purposes of this covenant, as the case may be, from further liability therefor;
following are deemed to be cash: (By) any securities, notes or other obligations or other assets or property securities received by the Company or any Restricted Subsidiary from such the transferee that are promptly converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents and (z) assets related to the extent business of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries received in an exchange of assets transaction; provided that (i) in the event such Asset Sale exchange of assets transaction or series of related exchange of assets transactions (each an "Exchange Transaction") involves an aggregate value in excess of $2.5 million, the terms of such Exchange Transaction shall have been approved by a majority of the disinterested members of the Board of Directors, (ii) in the event such Exchange Transaction involves an aggregate value in excess of $5.0 million, the Company shall have received a written opinion from a nationally recognized independent investment banking firm that the Company has received consideration equal to the fair market value of the assets disposed of and (iii) any assets to be received shall be comparable to those being exchanged as determined in good faith by the Board of Directors. The amount of Net Proceeds not invested, used or applied as set forth in the preceding clauses (a) and (b) constitutes "Excess Proceeds." If the Company elects, or becomes obligated to make an Excess Proceeds Offer, the Company shall offer to purchase New Notes having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an principal amount equal to the Net Cash Excess Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility"Purchase Amount"), first, at a purchase price equal to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0100% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the aggregate principal amount thereof, plus the amount of accrued but and unpaid interest, if any, on and Liquidated Damages, if any, to the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other date. The Company must commence such Excess Proceeds Offer not later than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in 30 days after the form expiration of the acquisition of Capital Stock of a Person, such investment, 12-month period following the Asset Sale that produced Excess Proceeds. If the aggregate purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that price for the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral New Notes tendered pursuant to the Security Documents reasonably promptly after receipt by Excess Proceeds Offer is less than the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Excess Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness use the portion of the Excess Proceeds remaining after payment of such purchase price for general corporate purposes, including Preferred Stock Purchases. Each Excess Proceeds Offer shall remain open for a period of 20 Business Days and no longer, unless a longer period is required by law (including under a revolving Debt Facility) the "Excess Proceeds Offer Period"). Promptly after the termination of the Excess Proceeds Offer Period (the "Excess Proceeds Payment Date"), the Company shall purchase and mail or otherwise invest deliver payment for the Purchase Amount for the New Notes or utilize portions thereof tendered, pro rata or by such Net Cash other method as may be required by law, or, if less than the Purchase Amount has been tendered, all New Notes tendered pursuant to the Excess Proceeds in any manner not prohibited by this IndentureOffer. Any The principal amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will New Notes to be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or purchased pursuant to an Asset Sale Excess Proceeds Offer made at any time after may be reduced by the principal amount of New Notes acquired by the Company through purchase or redemption (other than pursuant to a Change of Control Offer) subsequent to the date of the Asset Sale and surrendered to the Trustee for cancellation. Each Excess Proceeds Offer shall be deemed to have been applied as required conducted in compliance with all applicable laws, including without limitation, Regulation 14E of the Exchange Act and the rules thereunder and all other applicable Federal and state securities laws. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.10, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to be have breached its obligations under this Section 4.10 by virtue thereof. The Company shall, no later than 30 days following the expiration of the 12-month period following the Asset Sale that produced Excess Proceeds, commence the Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Offer, if an Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent Offer is required by the terms of other Pari Passu Indebtednessthis Indenture, by mailing to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or Trustee and each Holder, at such Holder's last registered address, a notice, which shall govern the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out terms of the Excess ProceedsProceeds Offer, at an offer price in cash in an amount equal and shall state: that the Excess Proceeds Offer is being made pursuant to 100.0% of this Section 4.10, the principal amount of New Notes which shall be accepted for payment and that all New Notes validly tendered shall be accepted for payment on a pro rata basis; the Notes purchase price and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase; that any New Notes not tendered or accepted for payment pursuant to the Excess Proceeds Offer shall continue to accrue interest and Liquidated Damages, if any; that, unless the Company defaults in the payment of the purchase (or such lesser price with respect to any New Notes tendered, New Notes accepted for payment pursuant to the Pari Passu IndebtednessExcess Proceeds Offer shall cease to accrue interest and Liquidated Damages, if any, as may be provided by after the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent Excess Proceeds Payment Date; that the aggregate amount of Holders electing to have New Notes and Pari Passu Indebtedness so properly tendered and not withdrawn purchased pursuant to an Asset Sale Excess Proceeds Offer shall be required to surrender their New Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the New Note completed, to the Company prior to the close of business on the third Business Day immediately preceding the Excess Proceeds Payment Date; that Holders shall be entitled to withdraw their election if the Company receives, not later than the close of business on the second Business Day preceding the Excess Proceeds Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of New Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such New Notes purchased; that if the aggregate purchase price of the New Notes tendered pursuant to the Excess Proceeds Offer is less than the Excess Proceeds, the Company may use any remaining the portion of the Excess Proceeds remaining after payment of such purchase price for any purpose not prohibited by this Indenturegeneral corporate purposes, including Preferred Stock Repurchases. If that Holders whose New Notes are purchased only in part shall be issued New Notes representing the aggregate unpurchased portion of the Notes surrendered; provided that each New Note purchased and each new New Note issued shall be in principal amount of Notes surrendered by $1,000 or whole multiples thereof; and the instructions that Holders thereof and other Pari Passu Indebtedness surrendered by Holders must follow in order to tender their New Notes. On or lendersbefore the Excess Proceeds Payment Date, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company shall (i) accept for payment on a pro rata basis the New Notes or portions thereof tendered pursuant to the Excess Proceeds Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all New Notes or portions thereof so accepted and (iii) deliver to the Trustee the New Notes so accepted, together with an Officers' Certificate stating that the New Notes or portions thereof tendered to the Company are accepted for payment. The Paying Agent shall promptly mail to each Holder of New Notes so accepted payment in accordance with Section 3.04(f). Upon completion an amount equal to the purchase price of such Asset Sale OfferNew Notes, and the Trustee shall promptly authenticate and mail to such Holders new New Notes equal in principal amount to any unpurchased portion of the New Note surrendered. The Company shall make a public announcement of the results of the Excess Proceeds Offer as soon as practicable after the Excess Proceeds Payment Date. For the purposes of this Section 4.10, the amount of Excess Proceeds Trustee shall be reset at zeroact as the Paying Agent."
Appears in 1 contract
Samples: Second Supplemental Indenture (Arg Property Management Corp)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company’s Board of Directors);
(2) at least 75.090% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or cash, Cash EquivalentsEquivalents and/or Replacement Assets (as defined below) and is received at the time of such disposition; provided, however, to the extent that the assets sold in such Asset Sale were part amount of the Collateral, the assets any notes or other obligations received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a such Restricted Subsidiary thereof. For from such transferee that are within 30 days converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received) shall be deemed, to the extent of cash so received, to be cash for purposes of this clause (2) the amount of:
(A) provision; provided further that any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the NotesNotes or any Guarantee, and excluding Indebtedness other than Indebtedness under clause (3) that are extinguished in connection with of the transactions relating to such Asset Sale, definition of “Indebtedness” or Purchase Money Indebtedness) that are assumed by the transferee and are not otherwise thereafter required to be reflected on the Company’s consolidated balance sheet shall be deemed to be cash for purposes of this provision;
(3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds in excess of $5.0 million for any one Asset Sale (or series of related Asset Sales) relating to such Asset Sale (in the case of the WB Disposition (or the first sale of a WB Station) only, the $5.0 million amount referred to above shall be $6.0 million for purposes of this Asset Sale in the event that $1.0 million has been previously deposited by the Company pursuant to Section 12.9 of this Indenture) (i) if any Tranche A Term Loans are outstanding at the time the WB Disposition (or the sale of any WB Station) occurs, to repay the full amount of such assetsoutstanding Tranche A Term Loans, such repayment to be made concurrently with such WB Disposition (or the sale of any WB Station) and prior to any other use permitted by this paragraph (a)(3) and (ii) within 180 days of receipt thereof to make an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties and assets (excluding Capital Stock other than Capital Stock of an entity that is (or will immediately become) a Guarantor) that will be used in the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto (“Replacement Assets”) or to finance, directly or indirectly, a Permitted Business Acquisition or enter into a definitive agreement to effectuate such acquisition, subject only to customary conditions, including FCC approval, within 90 days of receipt of the Net Cash Proceeds of such Asset Sale and consummate such acquisition within 270 days of receipt thereof; provided that (A) the primary purpose of such acquisition of Replacement Assets or Permitted Business Acquisition is to acquire, and there is acquired, a television station with a Big-4 (ABC, CBS, NBC or Fox) network affiliation agreement in place or the creation (through ownership by the Company and its Restricted Subsidiaries) of a “duopoly” in a market and (B) that the Company shall use all reasonable best efforts to promptly dispose of any other assets acquired in such acquisition or Permitted Business Acquisition; provided further that to the extent such Net Cash Proceeds were received from an Asset Sale of assets or property that constituted Collateral, such Replacement Assets so acquired shall be owned by the Company or a Guarantor, shall not be subject to any Liens other than Permitted Collateral Liens and the Company shall execute and deliver to the Trustee such Security Documents or other instruments as shall be reasonably necessary to cause such property or Capital Stockassets to become Collateral subject to the Lien of the applicable Security Documents (subject to the release provisions contained in Article X); and
(4) if such Asset Sale consists, in each casewhole or in part, of the sale of any Capital Stock of any Restricted Subsidiary, Capital Stock of such Restricted Subsidiary shall be sold or otherwise disposed of in the same transaction or series of related transactions such that such Person is no longer a Subsidiary.
(b) Pending the final application of such Net Cash Proceeds, the Company shall deposit such proceeds in a separate Collateral Account. Any such Net Cash Proceeds so deposited shall be promptly disbursed by the Trustee in accordance with the provisions of this Indenture upon notice from the Company such that the Company may apply such Net Cash Proceeds in accordance with the provisions of this Section 4.10. On the 181st day after an Asset Sale, or the 30th day after the termination of the acquisition agreement referred to in clause (3) of Section 4.10(a), as applicable, or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clause (3) of Section 4.10(a) (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clause (3) of Section 4.10(a) (each, a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase (the “Net Proceeds Offer”) to all Holders and the holders of any Senior Secured Indebtedness and, to the extent that such Net Proceeds Offer Amount relates to an Asset Sale of assets or property that did not constitute Collateral at the time of such Asset Sale and the terms of any pari passu Indebtedness require that an offer to purchase be made to all holders of such pari passu Indebtedness, to all holders of such Senior Secured Indebtedness and pari passu Indebtedness on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders (and holders of such Senior Secured Indebtedness and pari passu Indebtedness) on a pro rata basis, that amount of Notes (and Senior Secured Indebtedness and pari passu Indebtedness) equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes (and 100% of the principal amount of the Senior Secured Indebtedness and pari passu Indebtedness) to be purchased, plus accrued and unpaid interest (and Additional Interest, if any) thereon, if any, to the date of purchase; provided, however, that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this covenant.
(c) The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to this paragraph).
(d) In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an agreement entirety to a Person in a transaction permitted under Article V hereof which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant.
(e) Each Net Proceeds Offer shall comply with the procedures set forth in Section 3.10. If any Net Cash Proceeds remain after the consummation of any Net Proceeds Offer, the Company may use those Net Cash Proceeds for any purpose not otherwise prohibited by this Indenture. Upon completion of each Net Proceeds Offer, the amount of Net Cash Proceeds will be reset at zero.
(f) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, engage in any Asset Swaps, unless:
(1) at the time of entering into such Asset Swap and immediately after giving effect to such Asset Swap, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;
(2) in the event such Asset Swap involves the transfer by the Company or any Restricted Subsidiary of assets having an aggregate fair market value in excess of $5 million, either (i) the terms of such Asset Swap shall be approved by the Board of Directors of the Company which shall have determined that releases the Company or indemnifies the applicable Restricted Subsidiary is receiving consideration in the Asset Swap at least equal to the fair market value of the assets swapped or (ii) the Company shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness of such Asset Swap to the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securitiesa financial point of view, notes or other obligations or other assets or property received by from an Independent Financial Advisor and file the Company or any Restricted Subsidiary from such transferee that are converted by same with the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofTrustee; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at Asset Swap consists of assets or above 100.0% of property that constituted Collateral, the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results received in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition Asset Swap shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt owned by the Company or a Restricted Subsidiary thereof;that is a Guarantor, shall not (subject to the release provisions contained in Article X) be subject to any Liens other than Permitted Collateral Liens and the Company shall execute and deliver to the Trustee such Security Documents or other instruments as shall be reasonably necessary to cause such property or assets to become Collateral subject to the Lien of the applicable Security Documents.
(5g) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that extent such laws and regulations are applicable in connection with the subject repurchase of Notes pursuant to such Asset Sale; provided, a Net Proceeds Offer. To the extent that the assets acquired with the Net Cash Proceeds provisions of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company any securities laws or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied regulations conflict with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash ProceedsIndenture, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance shall comply with the provision described in clause (4) or (5) of this Section 4.10(b), applicable securities laws and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required regulations and shall not be deemed to be Excess Proceeds without regard to have breached its obligations under this Section 4.10 by virtue thereof.”
(f) Section 4.19 of the extent to which such offer Indenture is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness hereby deleted in its entirety and replaced with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.following:
Appears in 1 contract
Samples: Second Supplemental Indenture (Granite Broadcasting Corp)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company’s Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesNotes and other than liabilities consisting of Disqualified Capital Stock) that are extinguished in connection with the transactions relating to such Asset Sale, or (i) that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and from which the Company and its Restricted Subsidiaries are unconditionally released or (ii) in respect of which neither the Company nor any Restricted Subsidiary following such Restricted Subsidiary, as the case may be, from further liability therefor;
sale has any obligation and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are promptly, but in no event more than 60 days after receipt, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofshall be deemed to be cash for purposes of this provision; and
(3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 450 days of receipt thereof either:
(A) to repay any secured Indebtedness (other than (1) Subordinated Obligations and (2) in the event the Notes become secured by a Lien on any property or assets, Indebtedness secured equally and ratably in such property or assets or secured by Liens junior in priority to the Liens securing the Notes) and, in the case of any such Indebtedness under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;
(B) to reinvest in Productive Assets (and to the extent such reinvestment constitutes an Investment, such reinvestment complies with Section 4.8); or
(C) a combination of repayment and investment permitted by the foregoing clauses (3)(A) and (3)(B). On the 451st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(A), (3)(B) and (3)(C) of the immediately preceding sentence (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(A), (3)(B) and (3)(C) of the immediately preceding sentence (each a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase for cash (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from all Holders and holders of pari passu Indebtedness that is subject to a similar repurchase offer requirement on a pro rata basis, that amount of Notes and such pari passu Indebtedness equal to the Net Proceeds Offer Amount at a price in cash equal to 100% of the principal amount of the Notes and such pari passu Indebtedness to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that if at any Designated Noncash Consideration time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest, dividends or other earnings received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder as of the date of such conversion or disposition and the Net Cash Proceeds thereof shall be applied in accordance with this covenant.
(b) Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $30.0 million, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by the Company and its Restricted Subsidiaries aggregates at least $30.0 million, at which time the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $30.0 million or more shall be deemed to be a Net Proceeds Offer Trigger Date).
(c) Notwithstanding paragraphs (a) and (b) of this Section 4.12, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Productive Assets (and to the extent any of such Productive Assets constitutes an Investment, such Investment complies with Section 4.8); and
(2) such Asset Sale is for at least fair market value (as determined in good faith by the Company’s Board of Directors); provided that any consideration not constituting Productive Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together permitted to be consummated under this paragraph shall constitute Net Cash Proceeds and shall be subject to the provisions of this covenant with all other Designated Noncash Consideration received pursuant respect to this subclause (C) the application of Net Cash Proceeds; provided that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of entering into such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without transaction or immediately after giving effect to subsequent changes in value); thereto, no Default or Event of Default shall each have occurred or be deemed to be Cash Equivalentscontinuing or would occur as a consequence thereof.
(bd) Within 365 25 days after following the Net Proceeds Offer Trigger Date, the Company shall mail or cause the Trustee to mail (in the Company’s name and at its expense) notice of a Net Proceeds Offer to the Holders of the Notes at their last registered addresses with a copy to the Trustee and the Paying Agent. The Net Proceeds Offer shall remain open from the time of mailing for at least 20 Business Days and until the close of business on the third Business Day prior to the Net Proceeds Offer Payment Date or any Restricted Subsidiary’s receipt such longer period as may be required by Law. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer. The notice, which shall govern the terms of the Net Cash Proceeds Offer, shall state:
(i) that the Net Proceeds Offer is being made pursuant to this Section 4.12;
(ii) the purchase price (including the amount of accrued and unpaid interest, if any) for each Note and the Net Proceeds Offer Payment Date;
(iii) that any Asset SaleNote not tendered or accepted for payment will continue to accrue interest in accordance with the terms thereof;
(iv) that any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date unless the Company shall fail to make payment therefor;
(v) that Holders electing to have Notes purchased pursuant to a Net Proceeds Offer will be required to surrender their Notes to the Paying Agent at the address specified in the notice prior to 5:00 p.m., New York City time, on the third Business Day immediately preceding the Net Proceeds Offer Payment Date and must complete any form letter of transmittal proposed by the Company and acceptable to the Trustee and the Paying Agent;
(vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the third Business Day immediately preceding the Net Proceeds Offer Payment Date, a telex or facsimile transmission (confirmed by overnight delivery of the original thereof) or letter setting forth the name of the Holder, the principal amount of Notes the Holder delivered for purchase, the Note certificate number (if any) and a statement that such Holder is withdrawing his election to have such Notes purchased;
(vii) that if Notes and, if applicable, other pari passu Indebtedness in a principal amount in excess of the Holders’ pro rata share of the Net Proceeds are tendered pursuant to a Net Proceeds Offer, the Company shall purchase Notes and, if applicable, such other Indebtedness on a pro rata basis among the Notes and other Indebtedness tendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1.00 or integral multiples thereof shall be acquired);
(viii) that Holders whose Notes are purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; and
(ix) the instructions that Holders must follow in order to tender their Notes. On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment, on a Restricted Subsidiarypro rata basis among the Notes, at its optionNotes or portions thereof tendered pursuant to the Net Proceeds Offer, may apply (ii) deposit with the Paying Agent money, in immediately available funds, in an amount sufficient to pay the purchase price of all Notes or portions thereof so tendered and accepted and (iii) deliver to the Paying Agent the Notes so accepted together with an Officers’ Certificate setting forth the Notes or portions thereof tendered to and accepted for payment by the Company. The Paying Agent shall promptly mail or deliver to Holders of Notes so accepted payment in an amount equal to the Net Cash Proceeds from purchase price, and the Trustee shall promptly authenticate and mail or deliver to such Asset Sale (or Holders a new Note equal in principal amount to any unpurchased portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Note surrendered. Any Notes not so accepted shall be promptly mailed or delivered by the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of to the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed Holder thereof. The Paying Agent shall promptly deliver to the Company or an Affiliate the balance of any moneys held by the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed Paying Agent after payment to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicableaforesaid.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess Net Proceeds Offer Amount for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f)general corporate purposes. Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero.
(f) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations (including Rule 14e-1 under the Exchange Act) in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.12, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.12 by virtue thereof.
Appears in 1 contract
Samples: Indenture (Webcraft LLC)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any consummate, directly or indirectly, an Asset Sale Sale, unless:
(1) the Company or any of its such Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Saleof; and
(2) except in the case of a Permitted Asset Swap, at least 75.075% of the consideration from such Asset Sale therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Eligible Cash Equivalents; provided, however, to the extent provided that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on reflected in the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orfootnotes thereto, or if incurred Incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected shown on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes footnotes thereto if such incurrence Incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of sheet, as determined by the Company) of the Company or any such Restricted Subsidiary (Subsidiary, other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and for which the Company or such and all of its Restricted Subsidiary, as the case may be, from further liability therefor;Subsidiaries have been validly released by all creditors in writing,
(B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case ) within 180 days following the receipt thereof; closing of such Asset Sale, and
(C) any Designated Noncash Non-cash Consideration received by the Company or any of its such Restricted Subsidiaries Subsidiary in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Non-cash Consideration received pursuant to this subclause clause (C) that is at that time outstanding, not to exceed 2.0no greater than the greater of (i) 3% of Total Assets, calculated Assets at the time of the receipt of such Designated Noncash Non-cash Consideration and (ii) $60 million, with the Fair Market Value of each item of Designated Noncash Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value); , shall each be deemed to be Cash Equivalentscash for purposes of this provision and for no other purpose.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds of any Asset Sale, the Company or a such Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as followsSale:
(1) if such Net Cash Proceeds are from an Asset Sale that to permanently reduce:
(A) obligations under the Credit Facility, or under any other senior Debt which is not a disposition of Collateralsecured Debt permitted by this Indenture (and, to repaythe extent the obligations being reduced constitute revolving credit obligations, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in thereto);
(B) obligations under the case of revolving borrowings): Senior Subordinated Convertible Notes or the 2016 Notes; or
(xC) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness Debt of a Restricted Subsidiary (that is not a Guarantor, other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness Debt owed to the Company or an Affiliate of the Companyanother Restricted Subsidiary (or any affiliate thereof);; or
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make any combination of (A) an investment in, purchase or otherwise acquire Investment in any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, provided that if such investment, purchase or acquisition business is not a Restricted Subsidiary such Investment is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition Interests and results in the Company or any of its Restricted Subsidiaries, as the case may be, owning an amount of the Capital Interests of such Person becoming business such that it constitutes a Restricted Subsidiary; provided, further(B) an Investment in properties, (C) capital expenditures or (D) acquisitions of other assets, in each of (A) through (D), that the assets acquired with the Net Cash Proceeds of are used or useful in a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company Similar Business or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, properties and/or assets and/or properties that are the subject to of such Asset Sale; providedprovided that, that in the assets acquired with case of this clause (b) of Section 4.10, a binding commitment shall be treated as a permitted application of the Net Cash Proceeds from the date of a disposition shall not be Excluded Assets and are required to be pledged such commitment so long as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a such other Restricted Subsidiary thereofenters into such commitment with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); or
(6) any combination of the foregoing, providedprovided further, that if any Acceptable Commitment is later cancelled or terminated for any reason before such Net Proceeds are applied, then, to the Company and its Restricted Subsidiaries will be deemed extent the 365-day period referred to have complied with in the provisions described first sentence of this paragraph has lapsed, such Net Proceeds shall constitute Excess Proceeds (as defined in clause (4) or (5c) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b4.10), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Any Net Cash Proceeds of any from Asset Sales by a foreign Subsidiary (x) is prohibited that are not invested or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth described in clause (b) of this Section 4.10(b) 4.10 will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. .” When the aggregate amount of Excess Proceeds exceeds $50.0 25 million, the Company will be required to shall make an offer to all Holders of the Notes, and, if required or permitted by the terms of senior Debt, to the holders of such senior Debt (an “Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale), to purchase the maximum aggregate principal amount of the Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies senior Debt that is a minimum of $2,000 or an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds, Proceeds at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessand Additional Interest, if any, as may be provided by to the terms date fixed for the closing of such Indebtedness)offer, in accordance with the procedures set forth in this Indenture or Indenture. The Company will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the agreements governing date that Excess Proceeds exceed $25 million by mailing the Pari Passu Indebtednessnotice required pursuant to the terms of this Indenture, as applicablewith a copy to the Trustee.
(ed) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly any other senior Debt tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by general corporate purposes, subject to other covenants contained in this Indenture. If the aggregate principal amount of Notes or the senior Debt surrendered by Holders such holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection the Trustee shall select the Notes and the agent for such other senior Debt, as applicable, shall select such other senior Debt to be purchased by lot, pro rata or by any other method customarily authorized by clearing systems (so long as authorized denomination results therefrom) based on the accreted value or principal amount of the Notes for purchase will be made by the Company in accordance with Section 3.04(f)or such other senior Debt tendered. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Additionally, the Company may, at its option, make an Asset Sale Offer using proceeds from any Asset Sale at any time after consummation of such Asset Sale; provided that such Asset Sale Offer shall be in an aggregate amount of not less than $10 million. Upon consummation of such Asset Sale Offer, any Net Proceeds not required to be used to purchase Notes or such other senior Debt shall not be deemed Excess Proceeds.
(e) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Debt outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.
(f) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.
Appears in 1 contract
Samples: Indenture (Fti Consulting Inc)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate make any Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (determined by the Company in good faith, as of the date the Company enters into a definitive agreement relating to such Asset Sale) of the assets or other property sold or disposed of in the Asset Sale and (ii) except (x) in the case of a Permitted Asset Swap or (y) if such Asset Sale has a purchase price of less than $50.0 million, at least 75% of such consideration is in the form of cash or Cash EquivalentsEquivalents or assets used or useful in the business of the Company; provided, however, provided that for purposes of this covenant “cash” shall include (A) the amount of any liabilities (other than liabilities that are by their terms subordinated to the extent that the assets sold in such Asset Sale were part Notes or any Subsidiary Guarantee) of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a such Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any in connection with such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes assets or other obligations or other assets or property received by the Company or in such Asset Sale (and excluding any Restricted Subsidiary from such transferee liabilities that are converted by the Company incurred in connection with or in anticipation of such Restricted Subsidiary into cash or Cash EquivalentsAsset Sale), or by their terms are required to be satisfied for cash or Cash Equivalents (but only to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by that there is no further recourse to the Company or any of its Restricted Subsidiaries in with respect to such Asset Sale liabilities and (B) any Designated Noncash Consideration having an aggregate Fair Market Valuefair market value that, when taken together with all other Designated Noncash Consideration previously received pursuant to this subclause (C) that is at that time and then outstanding, does not to exceed 2.0% of Total Assets, calculated $50.0 million at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value). Notwithstanding clause (ii) above, (a) all or a portion of the consideration in connection with any such Asset Sale may consist of all or substantially all of the assets or a majority of the Voting Stock of an existing television business, franchise or station (whether existing as a separate entity, subsidiary, division, unit or otherwise) or any related business used or useful in the Company’s business and (b) the Company may, and may permit its Subsidiaries to, issue shares of Capital Stock in a Qualified Joint Venture to a Qualified Joint Venture Partner without regard to clause (ii) above; provided that, in the case of any of (a) or (b) of this sentence after giving effect to any such Asset Sale and related acquisition of assets or Voting Stock, (x) no Default or Event of Default shall each have occurred or be deemed to be Cash Equivalentscontinuing; and (y) the Net Proceeds of any such Asset Sale, if any, are applied in accordance with this Section 4.14.
(b) Within 365 days after any Asset Sale (or such shorter period as the Company’s Company in its sole election may determine), the Company may elect to apply or any Restricted Subsidiary’s receipt cause to be applied the Net Proceeds from such Asset Sale to (i) repay Secured Indebtedness, (ii) make an investment in, or acquire assets related to or otherwise useful in the business of the Company and its Subsidiaries existing on the Issue Date and/or (iii) to make capital expenditures in or that is used or useful in the business or to make capital expenditures for maintenance, repair or improvement of existing assets in accordance with the terms of this Indenture. Any Net Proceeds from an Asset Sale not applied or invested as provided in the first sentence of this paragraph within 365 days (or such shorter period as the Company in its sole election may determine) of such Asset Sale will be deemed to constitute “Excess Proceeds” on the 366th day after such Asset Sale; provided that in the case of clauses (ii) and (iii) above, a binding commitment shall be treated as a permitted application of the Net Cash Proceeds from the date of any Asset Sale, such commitment so long as the Company or a Restricted SubsidiarySubsidiary enters into such commitment with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment within 180 days of such commitment; provided, at its optionfurther, may apply an amount equal that if such commitment is later terminated or cancelled prior to the application of such Net Cash Proceeds from or such Net Proceeds are not so applied within such 180-day period, then such Net Proceeds shall constitute Excess Proceeds.
(c) In no event later than 20 Business Days after any date (an “Asset Sale (or any portion thereofOffer Trigger Date”) as follows:
(1) if such Net Cash that the aggregate amount of Excess Proceeds are from an Asset Sale that is not a disposition of Collateralexceeds $25.0 million, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making shall commence an offer to purchase to all holders of Notes and outstanding 2026 Notes (in accordance with the procedures set forth below for an “Asset Sale Offer”) at a price in cash equal to all Holders to purchase their Notes at 100.0100% of the principal amount thereof, plus the amount of accrued but and unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant interest to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, date of purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness ranking pari passu with the proceeds from any Asset Sale, Notes containing provisions similar to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures those set forth in this Indenture or the agreements governing the Pari Passu Indebtednesswith respect to asset sales, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant in each case, equal to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, pari passu debt tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, selection of the Trustee will select the Notes for purchase will be made by and the Company or its agent shall select the other pari passu debt to be purchased on a pro rata basis, by lot or such method as the Trustee shall deem fair and appropriate or, in accordance with Section 3.04(f)the event the Notes are in global form, as prescribed by DTC. Upon completion of such each Asset Sale Offer, the amount of Excess Proceeds shall will be reset at zero. To the extent that any Excess Proceeds remain after completion of an Asset Sale Offer, the Company may use the remaining amount for general corporate purposes and such amount shall no longer constitute “Excess Proceeds.”
(d) In connection with an Asset Sale Offer, the Company shall mail to each holder of Notes at such holder’s registered address a notice stating: (i) that an Asset Sale Offer Trigger Date has occurred and that the Company is offering to purchase the maximum principal amount of Notes that may be purchased out of the Excess Proceeds (and identifying other Indebtedness, if any, that is entitled to participate pro rata in the Asset Sale Offer), at an offer price in cash equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase (the “Asset Sale Offer Purchase Date”), which shall be a Business Day, specified in such notice, that is not earlier than 30 days or later than 60 days from the date such notice is mailed, (ii) the amount of accrued and unpaid interest as of the Asset Sale Offer Purchase Date, (iii) that any Note not tendered will continue to accrue interest, (iv) that, unless the Company defaults in the payment of the purchase price for the Notes payable pursuant to the Asset Sale Offer, any Notes accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Asset Sale Offer Purchase Date, (v) the procedures, consistent with the Indenture, to be followed by a holder of Notes in order to accept an Asset Sale Offer or to withdraw such acceptance and (vi) such other information as may be required by the Indenture and applicable laws and regulations.
(e) On the Asset Sale Offer Purchase Date, the Company will (i) accept for payment the maximum principal amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer that can be purchased out of Excess Proceeds from such Asset Sale, (ii) deposit with the Paying Agent the aggregate purchase price of all Notes or portions thereof accepted for payment and any accrued and unpaid interest on such Notes as of the Asset Sale Offer Purchase Date, and (iii) deliver or cause to be delivered to the Trustee all Notes tendered pursuant to the Asset Sale Offer. If less than all Notes tendered pursuant to the Asset Sale Offer are accepted for payment by the Company for any reason consistent with the Indenture, selection of the Notes to be purchased by the Company shall be in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate or, in the event the Notes are in global form, as otherwise prescribed by DTC; provided that Notes accepted for payment in part shall only be purchased in integral multiples of $1,000. The Paying Agent shall promptly mail to each holder of Notes or portions thereof accepted for payment an amount equal to the purchase price for such Notes plus any accrued and unpaid interest thereon, and the Trustee shall promptly authenticate and mail to such holder of Notes accepted for payment in part a new Note equal in principal amount to any unpurchased portion of the Notes, and any Note not accepted for payment in whole or in part shall be promptly returned to the holder of such Note. On and after an Asset Sale Offer Purchase Date, interest will cease to accrue on the Notes or portions thereof accepted for payment, unless the Company defaults in the payment of the purchase price therefor. The Company will announce the results of the Asset Sale Offer to holders of the Notes on or as soon as practicable after the Asset Sale Offer Purchase Date.
(f) The Company will comply with the applicable tender offer rules, including the requirements of Rule 14e-1 under the Exchange Act, and all other applicable securities laws and regulations in connection with any Asset Sale Offer. To the extent that the provisions of any applicable securities laws or regulations conflict with the Asset Sale Offer provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations under the Asset Sale Offer provisions of this Indenture by virtue of such compliance.
Appears in 1 contract
Samples: Indenture (Gray Television Inc)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its such Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such sale or other disposition at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Board of Directors of the Company, and evidenced by a board resolution, which determination shall be conclusive);
(2) at least 75.0not less than 75% of the consideration from such (excluding, in the case of an Asset Sale (or series of related Asset Sales) of assets, by way of relief from, or by another Person assuming responsibilities for, any liabilities, contingent or otherwise, that are not Indebtedness) received by the Company or such applicable Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; providedprovided that this clause (2) shall not apply to any Asset Sale (or series of related Asset Sales), however, involving assets that accounted for less than one percent of Consolidated EBITDA during the period of the most recent four consecutive fiscal quarters ending prior to the extent that the assets sold in date of such Asset Sale were part for which consolidated financial statements of the CollateralCompany are available; provided, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For further, that only for purposes of this clause (2) the amount offollowing shall be deemed to constitute cash:
(Aa) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date outstanding principal amount of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) Indebtedness of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated (x) Capital Stock which constitutes Indebtedness and (y) Indebtedness to the NotesCompany or any Restricted Subsidiary) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property (which shall not constitute the Company or Capital Stock, in each case, a Restricted Subsidiary) pursuant to an agreement that releases or indemnifies the respective Asset Sale, so long as the Company or such Restricted Subsidiary, as the case may be, Subsidiary is irrevocably and unconditionally released from further all liability therefor;under such Indebtedness; and
(Bb) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are are, within 180 days after the date of the respective Asset Sale, converted by the Company into cash (to the extent of the cash received in that conversion); and
(3) the Asset Sale Proceeds received by the Company or such Restricted Subsidiary into cash are applied:
(a) to the extent the Company or Cash Equivalentsany such Restricted Subsidiary, as the case may be, elects, or by their terms are required is required, to be satisfied for cash prepay, repay or Cash Equivalents purchase indebtedness under any then existing Senior Indebtedness of the Company or any such Restricted Subsidiary within 365 days following the receipt of the Asset Sale Proceeds from any Asset Sale;
(b) to the extent the Company elects, to an investment in assets (including Capital Stock or other securities purchased in connection with the acquisition of Capital Stock or property of another Person) used or useful in businesses similar, reasonably related, ancillary or complementary to the business of the Company (including extensions or developments thereof) or any such Restricted Subsidiary as conducted on the Issue Date; provided that such investment occurs (or a definitive agreement committing so to invest is entered) within 365 days following receipt of such Asset Sale Proceeds;
(c) to the extent of the cash balance of Available Asset Sale Proceeds after the application in accordance with clause (a) or Cash Equivalents received(b), if on such 365th day in each the case within 180 days following of clauses (3)(a) and (3)(b), the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Available Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to Proceeds exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale$10.0 million, the Company or a Restricted Subsidiary, at its option, may shall apply an amount equal to the Net Cash Proceeds from such Available Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed offer to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and repurchase the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (a purchase price in cash equal to the extent such purchases are at or above 100.0100% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, thereof plus the amount of accrued but and unpaid interest, if any, to the purchase date (an "Excess Proceeds Offer"). Notwithstanding the foregoing, in the event that a Restricted Subsidiary that is not a Wholly Owned Restricted Subsidiary dividends or distributes to all of its stockholders on a pro rata basis any proceeds of an Asset Sale to the Company or another Restricted Subsidiary, the Company or such Restricted Subsidiary need only apply its share of such proceeds in accordance with the preceding clauses (a), (b) and (c). If an Excess Proceeds Offer is not fully subscribed, the Company may retain the portion of the Available Asset Sale Proceeds not required to repurchase Notes. If the Company is required to make an Excess Proceeds Offer, the Company shall mail, within 30 days following the date specified in clause (3)(c) above, a notice to the Holders stating, among other things:
(1) that such Holders have the right to require the Company to apply the Available Asset Sale Proceeds to repurchase such Notes at a purchase price in cash equal to 100% of the principal amount of thereof plus accrued and unpaid interest, if any, to the purchase date;
(2) the purchase date, which shall be no earlier than 30 days and not later than 45 days from the date such notice is mailed;
(3) the instructions that each Holder must follow in order to have such Notes that would otherwise be prepaid;purchased; and
(4) the calculations used in determining the amount of Available Asset Sale Proceeds to make an investment inbe applied to the purchase of such Notes. In the event of the transfer of substantially all of the property and assets of the Company and its Restricted Subsidiaries, purchase or otherwise acquire any one or more businessestaken as a whole, assets (other than working capital assets), properties or capital expenditures, in each case used or useful to a Person in a Similar Business or transaction permitted under Section 5.01 below, the successor Person shall be deemed to make payments (including without limitation prepayments have sold the properties and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form assets of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied not so transferred for purposes of this Section 4.09, and shall comply with the provisions described in clause (4) or (5) of this Section 4.10(b) 4.09 with respect to such deemed sale as if it were an Asset Sale. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and other securities laws and regulations thereunder to the extent that, within 365 days after such laws and regulations are applicable in connection with the Company’s repurchase of Notes pursuant to an Excess Proceeds Offer. To the extent that the provisions of any securities laws or any Restricted Subsidiary’s receipt regulations conflict with the "Asset Sale" provisions of such Net Cash Proceedsthis Indenture, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance shall comply with the provision described in clause (4) or (5) of this Section 4.10(b), applicable securities laws and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required regulations and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted have breached its obligations under this Section 4.09 by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicablevirtue thereof.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate make any Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiariessuch Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value fair market value (as determined at by the time Board of contractually agreeing to such Asset SaleDirectors in good faith, which determination shall be evidenced by a board resolution) of the Capital Stock, assets or other property sold or otherwise disposed of pursuant to such in the Asset Sale; and
, and (2ii) at least 75.075% of the such consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent provided that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For for purposes of this clause (2) covenant "cash" shall include the amount of:
(A) of any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesNotes or any Subsidiary Guarantee) that are extinguished of the Company or such Subsidiary (as shown on the Company's or such Subsidiary's most recent balance sheet or in connection with the transactions relating to such Asset Sale, or notes thereto) that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes assets or other obligations or other assets or property received by the Company or in such Asset Sale (and excluding any Restricted Subsidiary from such transferee liabilities that are converted by the Company incurred in connection with or in anticipation of such Restricted Subsidiary into cash or Cash EquivalentsAsset Sale), or by their terms are required to be satisfied for cash or Cash Equivalents (but only to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by that such assumption is effected on a basis under which there is no further recourse to the Company or any of its Restricted Subsidiaries in with respect to such liabilities. Notwithstanding clause (ii) above, (a) all or a portion of the consideration for any such Asset Sale may consist of all or substantially all of the assets or a majority of the Voting Stock of an existing television business, franchise or station (whether existing as a separate entity, subsidiary, division, unit or otherwise) or any business directly related thereto, (b) Asset Sales involving assets which are not television or publishing businesses, franchises or stations and having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause value (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at as measured by the time value of the receipt consideration being paid for such assets) not in excess of such Designated Noncash Consideration $40,000,000 may be made without regard to clause (with ii) above, and (c) the Fair Market Value Company may, and may permit its Subsidiaries to, issue shares of each item Capital Stock in a Qualified Joint Venture to a Qualified Joint Venture Partner without regard to clause (ii) above; provided, that, in the case of Designated Noncash Consideration being measured at the time received without any of (a), (b) or (c) of this sentence, after giving effect to subsequent changes any such Asset Sale and related acquisition of assets or Voting Stock, (x) no Default or Event of Default shall have occurred or be continuing; and (y) the Net Proceeds of any such Asset Sale, if any, are applied in value); shall each be deemed to be Cash Equivalentsaccordance with this covenant.
(b) Within 365 360 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company may elect to apply or a Restricted Subsidiary, at its option, may apply an amount equal cause to be applied the Net Cash Proceeds from such Asset Sale to (i) permanently reduce any Senior Debt of the Company or any portion thereofGuarantor Senior Debt, and/or (ii) as follows:
(1) if make an investment in, or acquire assets directly related to the business of the Company and its Subsidiaries existing on the Issue Date. Pending the final application of any such Net Cash Proceeds, the Company may temporarily reduce Senior Debt of the Company or any Guarantor Senior Debt or temporarily invest such Net Proceeds are in any manner permitted by this Indenture. Any Net Proceeds from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase applied or otherwise retire (and to correspondingly reduce commitments with respect thereto invested as provided in the case first sentence of revolving borrowings): this paragraph within 360 days of such Asset Sale will be deemed to constitute "Excess Proceeds" on the 361st day after such Asset Sale.
(xc) Indebtedness As soon as practical, but in no event later than 10 Business Days after any date (an "Asset Sale Offer Trigger Date") that the aggregate amount of Excess Proceeds exceeds $5,000,000, the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of shall commence an offer to purchase the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the maximum principal amount thereof), or of Notes that may be purchased out of all such Excess Proceeds (iii) making an offer (in accordance with the procedures set forth below for an "Asset Sale Offer") at a price in cash equal to all Holders to purchase their Notes at 100.0100% of the principal amount thereof, plus the amount of accrued but and unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant interest to the Security Documents reasonably promptly after receipt by date of purchase (the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such "Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to Sale Offer Purchase Date"). To the extent that, within 365 days that any Excess Proceeds remain after the Company’s or any Restricted Subsidiary’s receipt completion of such Net Cash Proceedsan Asset Sale Offer, the Company or a Restricted Subsidiary, as applicable, has entered into may use the remaining amount for general corporate purposes and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day periodamount shall no longer constitute "Excess Proceeds.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs)."
(d) Pending the final application of Within 30 days following any such Net Cash ProceedsAsset Sale Offer Trigger Date, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness shall mail to each holder of Notes at such holder's registered address a notice stating: (including under a revolving Debt Facilityi) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required Trigger Date has occurred and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, that the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, is offering to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, Proceeds at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof, plus accrued and unpaid interest to the Asset Sale Offer Purchase Date, which shall be a Business Day, specified in such notice, that is not earlier than 30 days or later than 60 days from the date such notice is mailed, (but not includingii) the date amount of accrued and unpaid interest as of the Asset Sale Offer Purchase Date, (iii) that any Note not tendered will continue to accrue interest, (iv) that, unless the Company defaults in the payment of the purchase (or such lesser price with respect for the Notes payable pursuant to the Pari Passu IndebtednessAsset Sale Offer, any Notes accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Asset Sale Offer Purchase Date, (v) that Holders electing to tender any Note or portion thereof will be required to surrender their Note, with a form entitled "Option of Holder to Elect Purchase" completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day preceding the Asset Sale Offer Purchase Date; provided that Holders electing to tender only a portion of any Note must tender a principal amount of $1,000 or integral multiples thereof; (vi) that Holders will be entitled to withdraw their election to tender Notes if anythe Paying Agent receives, as may not later than the close of business on the third Business Day preceding the Asset Sale Offer Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have such Notes purchased; and (vii) that Holders whose Notes are accepted for payment in part will be issued new Notes equal in principal amount to the unpurchased portion of Notes surrendered; provided by the terms that only Notes in a principal amount of such Indebtedness), $1,000 or integral multiples thereof will be accepted for payment in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicablepart.
(e) To On the extent that Asset Sale Offer Purchase Date, the aggregate Company will (i) accept for payment the maximum principal amount of Notes and Pari Passu Indebtedness so properly or portions thereof tendered and not withdrawn pursuant to the Asset Sale Offer that can be purchased out of Excess Proceeds from such Asset Sale, (ii) deposit with the Paying Agent the aggregate purchase price of all Notes or portions thereof accepted for payment and any accrued and unpaid interest on such Notes as of the Asset Sale Offer Purchase Date, and (iii) deliver or cause to be delivered to the Trustee all Notes tendered pursuant to the Asset Sale Offer. If less than all Notes tendered pursuant to the Asset Sale Offer are to be purchased by the Company, the Trustee, on behalf of the Company, shall select the outstanding Notes to be purchased by the Company in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not listed on such an exchange, the Trustee on behalf of the Company, shall select the outstanding Notes to be purchased, on a pro rata basis, by lot or by such method as the Trustee deems fair and appropriate; provided that Notes purchased in part shall only be purchased in integral multiples of $1,000. The Company shall notify the Trustee of its acceptance for payment of Notes selected for purchase. The Paying Agent shall promptly mail to each holder of Notes or portions thereof accepted for payment an amount equal to the purchase price for such Notes plus any accrued and unpaid interest thereon, and the Trustee shall promptly authenticate and mail to such Holder of Notes accepted for payment in part a new Note equal in principal amount to any unpurchased portion of the Notes, and any Note not accepted for payment in whole or in part shall be promptly returned to the Holder of such Note. On and after an Asset Sale Offer is less than Purchase Date, interest will cease to accrue on the Excess ProceedsNotes or portions thereof accepted for payment, unless the Company may use defaults in the payment of the purchase price therefor. The Company will announce the results of the Asset Sale Offer to Holders on or as soon as practicable after the Asset Sale Offer Purchase Date.
(f) The Company will comply with the applicable tender offer rules, including the requirements of Rule 14e-1 under the Exchange Act, and all other applicable securities laws and regulations in connection with any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale Sale, unless:
(1) the Company or any of its such Restricted SubsidiariesSubsidiary, as the case may be, receives consideration from such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of or Capital Interests issued or sold (as in each case, such Fair Market Value to be determined at by the time Company on the date of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale); and
(2) except in the case of a Permitted Asset Swap, at least 75.075% of the consideration from such Asset Sale therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Eligible Cash Equivalents; provided, however, to the extent provided that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration following shall not be Excluded Assets and are required deemed to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For cash for purposes of this clause (2Section 4.10(a)(2) the amount ofand for no other purpose:
(A) any liabilities (as shown on reflected in the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orfootnotes thereto, or if incurred Incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected shown on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes footnotes thereto if such incurrence Incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of sheet, as determined by the Company) of the Company or any such Restricted Subsidiary (Subsidiary, other than liabilities that are by their terms subordinated to the Notes, (i) that are extinguished for which the Company and all of its Restricted Subsidiaries have been validly released by all creditors in connection with writing or (ii) in respect of which neither the transactions relating to Company nor any Restricted Subsidiary following such Asset Sale, or that are assumed by the transferee of Sale has any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;obligation,
(B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case ) within 180 365 days following the receipt thereof; closing of such Asset Sale, and
(C) any Designated Noncash Non-cash Consideration received by the Company or any of its such Restricted Subsidiaries Subsidiary in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Non-cash Consideration received pursuant to this subclause clause (C) that is at that time outstanding, not to exceed 2.0no greater than 10% of Total Assets, calculated Assets of the Company and its Subsidiaries at the time of the receipt of such Designated Noncash Consideration (Non-cash Consideration, with the Fair Market Value of each item of Designated Noncash Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds of any Asset Sale, the Company or a such Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (Sale, or any portion thereof) as followsother funds:
(1) if such Net Cash Proceeds are from an Asset Sale to permanently reduce:
(A) obligations under Credit Facilities, or under any senior Debt that is not a disposition of CollateralSecured Debt (and, to repaythe extent the obligations being reduced constitute revolving credit obligations, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): thereto); or
(xB) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness Debt of a Restricted Subsidiary (that is not a Guarantor, other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness Debt owed to the Company or an Affiliate of the Company)another Restricted Subsidiary;
(2) if such Net Cash Proceeds are from to make an Asset Sale Offer, or
(3) to make any combination of (A) an Investment in all or substantially all of the assets of one or more businesses, (B) an Investment in at least a majority of the Capital Interests of one or more businesses, provided that is not such Investment results in such business becoming a disposition Restricted Subsidiary, (C) capital expenditures or (D) acquisitions of Collateralother assets, in each of (A) through (D), that are used or useful in a Permitted Business or replace the businesses, properties and/or assets that are the subject of such Asset Sale; provided that, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
this clause (3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and a binding commitment (which may be subject to customary conditions) shall be treated as a permitted application of the funds from the date of such commitment so long as the Company or such other Restricted Subsidiary enters into such commitment with the good faith expectation that investment, purchase or other acquisition is thereafter completed such funds will be applied to satisfy such commitment within 180 days after the end of such the 365-day periodperiod described above (an “Acceptable Commitment”); provided further, that if any Acceptable Commitment is later cancelled or terminated for any reason before such funds are so applied, then, to the extent the 365-day period referred to in the first sentence of this paragraph has lapsed, such unapplied amount shall constitute Excess Proceeds (as defined in clause (c) of this Section 4.10).
(c) Notwithstanding If the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not Sales exceeds the amount invested, expended or applied or invested as provided and within the time period set forth periods described in clause (b) of this Section 4.10(b) 4.10, such excess amount will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. .” When the aggregate amount of Excess Proceeds exceeds $50.0 50 million, the Company will be required to shall make an offer to all Holders of the Notes, and, if required (or at the Company’s election, if permitted) by the terms of any other senior Debt, to the holders of any such senior Debt (an “Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale), to purchase the maximum aggregate principal amount of the Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies other senior Debt that is a minimum of $2,000 or an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds, Proceeds at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to fixed for the Pari Passu Indebtedness, if any, as may be provided by the terms closing of such Indebtedness)offer, in accordance with the procedures set forth in this Indenture or Indenture. The Company will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the agreements governing date that Excess Proceeds exceed $50 million by mailing the Pari Passu Indebtednessnotice required pursuant to the terms of this Indenture, as applicablewith a copy to the Trustee.
(ed) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly other senior Debt tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by general corporate purposes, subject to other covenants contained in this Indenture. If the aggregate principal amount of Notes and other senior Debt surrendered by Holders such holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection the Trustee shall select the Notes and the agent for such other senior Debt, as applicable, shall select such other senior Debt to be purchased by lot, pro rata or by any other method customarily authorized by clearing systems (so long as authorized denomination results therefrom) based on the accreted value or principal amount of the Notes for purchase will be made by or such other senior Debt tendered. Additionally, the Company may, at its option, make an Asset Sale Offer using funds in accordance with Section 3.04(f)an amount equal to the amount of Net Proceeds from any Asset Sale at any time after consummation of such Asset Sale; provided that such Asset Sale Offer shall be in an aggregate amount of not less than $10 million. Upon completion of such any Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(e) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Debt outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.
(f) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall Borrower will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company Borrower (or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from such Asset Sale received by the Company or such a Restricted Subsidiary, as the case may be, ) receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;
(ii) at least 75% of the aggregate consideration received by the Borrower or such Restricted Subsidiary in the Asset Sale is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company Equivalents or a Restricted Subsidiary any combination thereof. For purposes of this clause (2) provision, each of the amount offollowing will be deemed to be cash:
(A) any liabilities (of the Borrower or any Restricted Subsidiary, as shown on the Company’s or such Restricted SubsidiaryParent’s most recent consolidated and consolidating balance sheet or in the notes thereto for which internal financial and statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) Parent, indicating such items in respect of the Company or any Borrower and its Restricted Subsidiary Subsidiaries (other than contingent liabilities and liabilities that are by their terms subordinated to the NotesSecured Obligations and liabilities owed to the Borrower or any Subsidiary) that are extinguished in connection with the transactions relating to such Asset Sale, or that are expressly assumed by the transferee of any such assets, property or Capital Stock, in each case, assets pursuant to an a customary written novation agreement that releases or indemnifies the Company Borrower or such Restricted Subsidiary, as the case may be, Subsidiary from further liability thereforliability;
(B) any securities, notes or other obligations or other assets or property non-cash consideration received by the Company Borrower or any such Restricted Subsidiary from such transferee that are converted by the Company Borrower or such Restricted Subsidiary into cash or Cash EquivalentsEquivalents within 180 days following the closing of such Asset Sale, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents receivedreceived in that conversion;
(C) the fair market value of (i) any assets (other than securities) used or useful in a Permitted Business, (ii) Equity Interests acquired from a Person other than the Borrower or any Restricted Subsidiary in a Person engaged in a Permitted Business and that shall become a Restricted Subsidiary immediately upon the acquisition of such Person by the Borrower or (iii) a combination of (i) and (ii), in each case within 180 days following the receipt thereof; and
(CD) any Designated Noncash Non-cash Consideration received by the Company Borrower or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Valuefair market value, taken together with all other Designated Noncash Non-cash Consideration received pursuant to this subclause clause (CD) that is at that time outstandinghas not, prior to such time, been converted into cash or Cash Equivalents, not to exceed the greater of (i) $25.0 million or (ii) 2.0% of Total Assets, calculated the Borrower’s Consolidated Tangible Assets at the time of the receipt of such Designated Noncash Consideration (Non-cash Consideration, with the Fair Market Value fair market value of each item of Designated Noncash Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value); Any Asset Sale pursuant to a condemnation, seizure, appropriation or similar taking, including by deed in lieu of condemnation, casualty, actual or constructive total loss or an agreed or compromised total loss shall each not be deemed required to be Cash Equivalentssatisfy the conditions set forth in clauses (i) and (ii) of the first paragraph of this covenant.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds from an Asset Sale of any Asset Saleassets constituting Collateral, the Company Borrower or a Restricted Subsidiaryother Loan Party, as the case may be, may apply such Net Cash Proceeds, at its option:
(i) to prepay or repay the Secured Obligations in accordance with Section 2.03(b)(ii);
(ii) to acquire Equity Interests in a Person that constitutes a controlling interest, may apply an amount equal or all or substantially all of the assets or operating line of another business, in each case engaged in a Permitted Business;
(iii) to make capital expenditures in a Permitted Business; or
(iv) to acquire other non-current assets (other than securities) to be used in a Permitted Business; in the case of each of clauses (ii), (iii) and (iv), if the assets being acquired would constitute Collateral or if any Person the Equity Interests of which are being acquired would become a Loan Party and the Equity Interests of such Person would constitute Collateral;
(c) Within 365 days after the receipt of any Net Cash Proceeds from such an Asset Sale (of assets not constituting Collateral, the Borrower or any portion thereof) other Loan Party, as followsthe case may be, may apply such Net Cash Proceeds, at its option:
(1i) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateralto prepay, to repay, prepaypurchase, defease, redeem, reduce, purchase repurchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) redeem any Senior Indebtedness of the Company (other than Parent or any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part Subsidiary of the Collateral Parent (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company Parent or an Affiliate of the CompanyParent);
(2ii) if such Net Cash Proceeds are from an Asset Sale to acquire Equity Interests in a Person that is not constitutes a disposition controlling interest, or substantially all of Collateralthe assets or operating line of another business, in the each case of an Asset Sale by engaged in a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor SubsidiaryPermitted Business;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise capital expenditures in a Permitted Business; or
(iv) to acquire any one or more businesses, other non-current assets (other than working capital assets), properties or capital expenditures, in each case securities) to be used or useful in a Similar Business or to make payments Permitted Business.
(including without limitation prepayments and progress paymentsd) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant Notwithstanding anything to the Security Documents reasonably promptly after receipt by contrary contained herein if the Company Borrower or a the applicable Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause clauses (4b) or and (5c) of this Section 4.10(b) if and to the extent thatabove if, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash ProceedsAsset Sale, the Company Borrower or a such Restricted SubsidiarySubsidiary shall have commenced and not completed or abandoned an expenditure or Investment, as applicable, has or entered into and not abandoned or rejected a binding agreement with respect to make an investmentexpenditure or Investment, purchase or other acquisition in compliance with the provision described in clause clauses (4b) or and (5c) of this Section 4.10(b)above, and that investment, purchase expenditure or other acquisition Investment is thereafter substantially completed within 180 days a date one year and six months after the end date of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantSale. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries Borrower may temporarily reduce Indebtedness (including under a revolving Debt Facility) expend or otherwise invest or utilize such Net Cash Proceeds in any manner that is not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicableAgreement.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Samples: Term Loan Credit Agreement (Chesapeake Oilfield Operating LLC)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its such Restricted Subsidiaries, as the case may be, Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; andof;
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
such Asset Sale shall be in the form of cash, Cash Equivalents and/or Replacement Assets (Bas defined in clause 3(b) below) and/or any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash received) within 60 days after receipt and is received at the time of such disposition; provided that the amount of any liabilities of the Company or Cash Equivalents received), in each case within 180 days following any such Restricted Subsidiary as shown on the receipt thereofCompany’s or such Restricted Subsidiary’s most recent balance sheet (other than liabilities that are by their terms subordinated to the Notes or any Guarantee of a Guarantor) that are assumed by the transferee of any such assets shall be deemed to be cash for purposes of this provision; and
(C3) any Designated Noncash Consideration received by except as provided in the Company or any next paragraph upon the consummation of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale (or any portion within 360 days of receipt thereof) as follows:
(14) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire permanently reduce Indebtedness under any Non-Funding Credit Facility (and to correspondingly reduce commitments with respect thereto in the case of including revolving borrowings): (xand/or term Indebtedness) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateraland, in the case of an Asset Sale by any such Indebtedness under any revolving credit facility, effect a Restricted Subsidiary that is a Nondollar-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto for-dollar reduction in the case of commitments under such revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiarycredit facility;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4a) to make an investment in, purchase in properties and assets that replace the properties and assets that were the subject of such Asset Sale or otherwise acquire any one or more businesses, in properties and assets (other than working capital assetsincluding Capital Stock) that will be used in any Related Business (“Replacement Assets”); and/or
(b) a combination of prepayment and investment permitted by the foregoing clauses(3)(a) and (b). On the 361st day after an Asset Sale or such earlier date, properties or capital expendituresif any, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in as the form Board of Directors of the acquisition Company or of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with Subsidiary determines not to apply the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject relating to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged Sale as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until clauses (3)(a), (3)(b) and/or (3)(c) of the preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided and within the time period set forth permitted in Section 4.10(bclauses (3)(a), (3)(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause and/or (33)(c) of Section 4.10(bthe preceding paragraph (each a “Net Proceeds Offer Amount”) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase to all Holders (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, and to all holders of Pari Passu Indebtedness in accordance with provisions governing any Pari Passu Indebtedness requiring the Company or such Restricted Subsidiary to prepay, purchase or redeem such Pari Passu Indebtedness with the proceeds from any Asset SaleSales (or offer to do so), to purchase the maximum principal amount from all Holders (and holders of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies Indebtedness) on a pro rata basis, that may be purchased out amount of the Excess Proceeds, at an offer price in cash in an amount Notes (and Pari Passu Indebtedness) equal to 100.0the Net Proceeds Offer Amount at a price (the “Net Proceeds Offer Price”) equal to 100% of the principal amount of the Notes (and Pari Passu Indebtedness Indebtedness) to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that (but not includingi) if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.11 and (ii) the Net Proceeds Offer Price for any such Pari Passu Indebtedness may exceed 100% of principal amount plus accrued and unpaid interest thereon to the date of purchase (or such lesser price with respect to if so provided under the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness)relevant documentation, in accordance with which case the procedures set forth Company shall use other funds to pay such excess, including any Net Cash Proceeds that would otherwise remain after consummation of the Net Proceeds Offer. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $15.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $15.0 million, shall be applied as required pursuant to this Indenture paragraph). Pending the final application of any Net Cash Proceeds, the Company or the agreements governing the Pari Passu Indebtednessany Restricted Subsidiary may temporarily reduce borrowings under any revolving credit facility, as applicable.
(e) including any Warehouse Facility, or otherwise temporarily invest such Net Cash Proceeds in any manner that is not prohibited by this Indenture. To the extent that Holders properly tender Notes and holders of Pari Passu Indebtedness properly tender such Pari Passu Indebtedness in an aggregate principal amount exceeding the Net Proceeds Offer Amount, the tendered Notes and Pari Passu Indebtedness will be purchased, repaid or redeemed out of Net Cash Proceeds on a pro rata basis based on the aggregate amount principal amounts of Notes and Pari Passu Indebtedness so properly tendered (and not withdrawn pursuant the Trustee shall select the tendered Notes of tendering Holders on a pro rata basis based on the amount of Notes tendered), provided that the Net Proceeds Offer Price of any Pari Passu Indebtedness for this purpose shall be deemed equal to an Asset Sale 100% of principal amount plus accrued and unpaid interest thereon to the date of purchase. A Net Proceeds Offer is less than shall remain open for a period of 20 business days or such longer period as may be required by law. If any Net Cash Proceeds remain after the Excess Proceedsconsummation of any Net Proceeds Offer, the Company may use any remaining Excess those Net Cash Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale each Net Proceeds Offer, the amount of Excess Net Cash Proceeds shall will be reset at zero. In the event that the Company shall be required to commence an offer to Holders to purchase Notes pursuant to this Section 4.11, it shall follow the procedures specified in Section 3.09.
Appears in 1 contract
Samples: Indenture (Saxon Capital Inc)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company’s Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesNotes and other than liabilities consisting of Disqualified Capital Stock) that are extinguished in connection with the transactions relating to such Asset Sale, or (i) that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and from which the Company and its Restricted Subsidiaries are unconditionally released or (ii) in respect of which neither the Company nor any Restricted Subsidiary following such Restricted Subsidiary, as the case may be, from further liability therefor;
sale has any obligation and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are promptly, but in no event more than 60 days after receipt, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofshall be deemed to be cash for purposes of this provision; and
(C3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 360 days of receipt thereof either:
(a) to prepay any Designated Noncash Consideration Senior Debt or Guarantor Senior Debt and, in the case of any Senior Debt or Guarantor Senior Debt under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;
(b) to reinvest in Productive Assets (and to the extent such reinvestment constitutes an Investment, such reinvestment complies with Section 4.8); or
(c) a combination of prepayment and investment permitted by the foregoing clauses (3)(a) and (3)(b). On the 361st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence (each a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase for cash (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount at a price in cash equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest, dividends or other earnings received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder as of the date of such conversion or disposition and the Net Cash Proceeds thereof shall be applied in accordance with this covenant.
(b) Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $20 million, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by the Company and its Restricted Subsidiaries aggregates at least $10 million, at which time the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $20 million or more shall be deemed to be a Net Proceeds Offer Trigger Date).
(c) Notwithstanding paragraphs (a) and (b) of this Section 4.12, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Productive Assets (and to the extent any of such Productive Assets constitutes an Investment, such Investment complies with Section 4.8); and
(2) such Asset Sale is for at least fair market value (as determined in good faith by the Company’s Board of Directors); provided that any consideration not constituting Productive Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together permitted to be consummated under this paragraph shall constitute Net Cash Proceeds and shall be subject to the provisions of this covenant with all other Designated Noncash Consideration received pursuant respect to this subclause (C) the application of Net Cash Proceeds; provided that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of entering into such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without transaction or immediately after giving effect to subsequent changes in value); thereto, no Default or Event of Default shall each have occurred or be deemed to be Cash Equivalentscontinuing or would occur as a consequence thereof.
(bd) Within 365 25 days after following the Net Proceeds Offer Trigger Date, the Company shall mail or cause the Trustee to mail (in the Company’s or any Restricted Subsidiary’s receipt name and at its expense) notice of a Net Proceeds Offer to the Holders of the Notes at their last registered addresses with a copy to the Trustee and the Paying Agent. The Net Proceeds Offer shall remain open from the time of mailing for at least 20 Business Days and until the close of business on the third Business Day prior to the Net Proceeds Offer Payment Date. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer. The notice, which shall govern the terms of the Net Cash Proceeds Offer, shall state:
(i) that the Net Proceeds Offer is being made pursuant to this Section 4.12;
(ii) the purchase price (including the amount of accrued and unpaid interest, if any) for each Note and the Net Proceeds Offer Payment Date;
(iii) that any Asset SaleNote not tendered or accepted for payment will continue to accrue interest in accordance with the terms thereof;
(iv) that any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date unless the Company shall fail to make payment therefor;
(v) that Holders electing to have Notes purchased pursuant to a Net Proceeds Offer will be required to surrender their Notes to the Paying Agent at the address specified in the notice prior to 5:00 p.m., New York City time, on the third Business Day immediately preceding the Net Proceeds Offer Payment Date and must complete any form letter of transmittal proposed by the Company and acceptable to the Trustee and the Paying Agent;
(vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the third Business Day immediately preceding the Net Proceeds Offer Payment Date, a telex or facsimile transmission (confirmed by overnight delivery of the original thereof) or letter setting forth the name of the Holder, the principal amount of Notes the Holder delivered for purchase, the Note certificate number (if any) and a statement that such Holder is withdrawing his election to have such Notes purchased;
(vii) that if Notes in a principal amount in excess of the Holders’ pro rata share of the Net Proceeds are tendered pursuant to a Net Proceeds Offer, the Company shall purchase Notes on a pro rata basis among the Notes tendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000 or integral multiples of $1,000 shall be acquired);
(viii) that Holders whose Notes are purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; and
(ix) the instructions that Holders must follow in order to tender their Notes. On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment, on a Restricted Subsidiarypro rata basis among the Notes, at its optionNotes or portions thereof tendered pursuant to the Net Proceeds Offer, may apply (ii) deposit with the Paying Agent money, in immediately available funds, in an amount sufficient to pay the purchase price of all Notes or portions thereof so tendered and accepted and (iii) deliver to the Paying Agent the Notes so accepted together with an Officers’ Certificate setting forth the Notes or portions thereof tendered to and accepted for payment by the Company. The Paying Agent shall promptly mail or deliver to Holders of Notes so accepted payment in an amount equal to the Net Cash Proceeds from purchase price, and the Trustee shall promptly authenticate and mail or deliver to such Asset Sale (or Holders a new Note equal in principal amount to any unpurchased portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Note surrendered. Any Notes not so accepted shall be promptly mailed or delivered by the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part to the Holder thereof. The Company will publicly announce the results of the Collateral (other than Indebtedness owed to an Affiliate of Net Proceeds Offer on the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of first Business Day following the Collateral (other than Indebtedness owed Net Proceeds Offer Payment Date. The Paying Agent shall promptly deliver to the Company or an Affiliate the balance of any moneys held by the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed Paying Agent after payment to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicableaforesaid.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess Net Proceeds Offer Amount for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f)general corporate purposes. Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero.
(f) In the event of the transfer of substantially all of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Article V, which transaction does not constitute a Change of Control, the successor Person shall be deemed to have sold the properties and assets of the Company and its Subsidiaries not so transferred for purposes of this Section 4.12, and shall comply with the provisions of clause (a)(3) of this Section 4.12 respect to such deemed sale as if it were an Asset Sale.
(g) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations (including Rule 14e-l under the Exchange Act) in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.12, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.12 by virtue thereof.
Appears in 1 contract
Samples: Indenture (Vertis Inc)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company’s Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities and other than liabilities consisting of Disqualified Capital Stock) that are extinguished in connection with the transactions relating to such Asset Sale, or (i) that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and from which the Company and its Restricted Subsidiaries are unconditionally released or indemnified against by such transferee or (ii) in respect of which neither the Company nor any Restricted Subsidiary, as the case may be, from further liability therefor;
Subsidiary following such sale has any obligation and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are promptly, but in no event more than 60 days after receipt, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofshall be deemed to be cash for purposes of this provision; and
(C3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, an amount equal to the Net Cash Proceeds relating to such Asset Sale within 365 days of receipt thereof either:
(a) to prepay any Designated Noncash Consideration Senior Debt, Guarantor Senior Debt or Indebtedness of a Restricted Subsidiary that is not a Guarantor and, in the case of any Senior Debt, Guarantor Senior Debt or Indebtedness of a Restricted Subsidiary that is not a Guarantor under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;
(b) to reinvest in Productive Assets; or
(c) a combination of prepayment and investment permitted by the foregoing clauses (3)(a) and (3)(b). On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply an amount equal to the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount equal to the Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence (each, a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase for cash (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Securities equal to the Net Proceeds Offer Amount at a price in cash equal to 100% of the principal amount of the Securities to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest, dividends or other earnings received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this covenant. Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $10.0 million, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by the Company and its Restricted Subsidiaries aggregates at least $10.0 million, at which time the Company or such Restricted Subsidiary shall apply an amount equal to all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $10.0 million or more shall be deemed to be a “Net Proceeds Offer Trigger Date”). Notwithstanding the immediately preceding paragraphs of this Section 4.13, the Company and its Restricted Subsidiaries shall be permitted to consummate an Asset Sale without complying with such paragraphs to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Productive Assets; and
(2) such Asset Sale is for at least fair market value (as determined in good faith by the Company’s Board of Directors); provided that any consideration not constituting Productive Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Valuepermitted to be consummated under this paragraph shall constitute consideration for purposes of the definition of “Net Cash Proceeds” and shall be subject to the provisions of the two preceding paragraphs; provided, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt entering into such transaction or immediately after giving effect thereto, no Default or Event of such Designated Noncash Consideration (with the Fair Market Value Default shall have occurred or be continuing or would occur as a consequence thereof. Notice of each item of Designated Noncash Consideration being measured at the time received without giving effect Net Proceeds Offer pursuant to subsequent changes in value); this Section 4.13 shall each be deemed mailed or caused to be Cash Equivalents.
(b) Within 365 mailed, by first class mail, by the Company within 25 days after following the Company’s applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or any Restricted Subsidiary’s receipt such longer period as may be required by law. Upon receiving notice of the Net Cash Proceeds Offer, Holders may elect to tender their Securities in whole or in part in integral multiples of any Asset Sale$1,000 in exchange for cash. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to this Section 4.13 and that all Securities tendered will be accepted for payment; provided, however, that if the principal amount of Securities tendered in the Net Proceeds Offer exceeds the aggregate amount of Net Proceeds Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis;
(2) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by applicable law);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a Restricted Subsidiarystatement that such Holder is withdrawing his election to have such Security purchased; and
(7) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, at its optionthe Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, may apply (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers’ Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereofprice, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is thereon set forth in the form notice of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition Offer. Any Security not so accepted shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt mailed by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary Holder thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) . For purposes of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds4.13, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph Trustee shall apply to such amounts so long, but only so long, act as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantPaying Agent. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly Securities tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess Net Proceeds Offer Amount for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f)general corporate purposes. Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.13, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.13 by virtue thereof.
Appears in 1 contract
Samples: Indenture (BWAY Holding CO)
Limitation on Asset Sales. (a) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any Asset Sale unless:
unless (1i) the Company Borrower or any of its Restricted Subsidiaries, as the case may be, such Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale, (as determined at the time of contractually agreeing ii) immediately before and immediately after giving effect to such Asset Sale, no Default or Event of Default shall have occurred and be continuing and (iii) at least 75% of the Capital Stockconsideration received by the Borrower or such Subsidiary therefor is in the form of cash paid at the closing thereof, assets provided, however, that this clause (iii) shall not apply (A) if, after giving effect to such Asset Sale, the aggregate principal amount of all notes or property sold similar debt obligations and Fair Market Value of all equity securities received by the Borrower from all Asset Sales since the Closing Date (other than such notes or similar debt obligations and such equity securities converted into or otherwise disposed of pursuant to such Asset Sale; and
(2for cash and applied in accordance with the second succeeding sentence) at least 75.0would not exceed 2.5% of Consolidated Tangible Assets (B) to Asset Sales for which the non-cash consideration from exceeds 25%, the Net Proceeds of which do not exceed $25,000,000 in the aggregate. The amount (without duplication) of any (x) Indebtedness (other than Subordinated Indebtedness) of the Borrower or such Subsidiary that is expressly assumed by the transferee in such Asset Sale received by and with respect to which the Company Borrower or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt unconditionally released by the Company or a Restricted Subsidiary thereof. For purposes holder of this clause such Indebtedness and (2) the amount of:
(Ay) any liabilities (as shown on the Company’s notes, securities or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other similar obligations or other assets or items of property received by the Company or any Restricted Subsidiary from such transferee that are converted immediately converted, sold or exchanged by the Company Borrower or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents actually so received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below cash for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) purposes of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period6.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Samples: Senior Subordinated Credit Agreement (Healthsouth Corp)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed (and if such Fair Market Value exceeds £3.0 million pounds sterling, a Board Resolution evidencing the determination of pursuant such Fair Market Value by the Board of Directors shall be delivered to such Asset Sale; andthe Trustee);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, from such Asset Sale is in the form of cash or Cash EquivalentsEquivalents (other than Cash Equivalents denominated in Singapore dollars or United Arab Emirate dirhams) and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such applicable balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets shall be deemed to be cash for purposes of this provision so long as the documents governing such liabilities provide that there is no further recourse to the Company or any of its Subsidiaries with respect to such liabilities; and
(3) within 360 days of receipt thereof by the Company or any of its Restricted Subsidiaries, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale either:
(A) to repay Indebtedness under the Working Capital Facility and permanently reduce the commitments thereunder;
(B) to make an investment in property, plant, equipment or other non-current assets that replace the properties and assets that were the subject of such Asset Sale or that will be used or useful in a Permitted Business (including expenditures for maintenance, repair or improvement of existing properties and assets) or the acquisition of all of the Capital Stock of a Person engaged in a Permitted Business; or
(C) a combination of repayment and investment permitted by the foregoing clauses (3)(A) and (3)(B). Pending the final application of Net Cash Proceeds, property the Company may temporarily reduce borrowings under the Working Capital Facility or Capital Stockinvest such Net Cash Proceeds in Cash Equivalents (other than Cash Equivalents denominated in Singapore dollars or United Arab Emirates dirhams). On the 361st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in each caseclauses (3)(A), pursuant to an agreement that releases (3)(B) or indemnifies (3)(C) of the preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(A), (3)(B) and (3)(C) of the preceding paragraph (each, a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted Subsidiary, as Subsidiary to make an offer to purchase (the case may be“Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from further liability therefor;
all Holders and all holders of other Applicable Indebtedness containing provisions similar to those set forth in Section 4.11, on a pro rata basis, the maximum principal amount of Notes and such other Applicable Indebtedness that may be purchased with the Net Proceeds Offer Amount at a price equal to 100% of the principal amount thereof (B) or if such Indebtedness was issued with original issue discount, 100% of the accreted value), plus accrued and unpaid interest and Additional Interest thereon, if any, to the date of purchase and Additional Amounts, if any; provided, however, that if at any securities, notes or other obligations or other assets or property time any non-cash consideration received by the Company or any Restricted Subsidiary from such transferee that are of the Company, as the case may be, in connection with any Asset Sale is converted by the Company into or such Restricted Subsidiary into cash sold or Cash Equivalents, or by their terms are required to be satisfied otherwise disposed of for cash or Cash Equivalents (other than interest received with respect to the extent of the any such non-cash or Cash Equivalents receivedconsideration), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company then such conversion or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); disposition shall each be deemed to be Cash Equivalents.
(b) Within 365 days after constitute an Asset Sale hereunder on the Company’s date of such conversion or any Restricted Subsidiary’s receipt of disposition, as the case may be, and the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (thereof shall be applied in accordance with the procedures set forth below for Section 4.11. The Company may defer any Net Proceeds Offer until there is an Asset Sale Offer) aggregate unutilized Net Proceeds Offer Amount equal to all Holders to purchase their Notes at 100.0% or in excess of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any £3.0 million pounds sterling resulting from one or more businessesAsset Sales in which case the accumulation of such amount shall constitute a Net Proceeds Offer Trigger Date (at which time, assets (other than working capital assets)the entire unutilized Net Proceeds Offer Amount, properties or capital expendituresand not just the amount in excess of £3.0 million pounds sterling, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are applied as required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by immediately preceding paragraph). Upon the Company or a Restricted Subsidiary thereof;
(5) to make an investment incompletion of each Net Proceeds Offer, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not Offer Amount will be Excluded Assets and are required to be pledged as Collateral pursuant to reset at zero. In the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination event of the foregoing, provided, that transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries will as an entirety to a Person in a transaction permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor entity shall be deemed to have complied with sold the provisions described in clause (4) or (5) properties and assets of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) not so transferred for purposes of Section 4.11, and shall comply with the provisions of Section 4.11 with respect to such deemed sale as if it constituted an Asset Sale. In addition, the Fair Market Value of such properties and assets of the Company or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be its Restricted Subsidiaries deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale be sold shall be deemed to have been applied as required and be Net Cash Proceeds for purposes of Section 4.11. Each notice of a Net Proceeds Offer shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 millionmailed first class, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes andpostage prepaid, to the extent required by record Holders as shown on the terms register of other Pari Passu IndebtednessHolders within 20 days following the Net Proceeds Offer Trigger Date, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect a copy to the Pari Passu IndebtednessTrustee, if any, as may be provided by the terms of such Indebtedness), in accordance and shall comply with the procedures set forth in this Indenture Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 in exchange for cash. To the agreements governing extent Holders properly tender Notes in an amount exceeding the Pari Passu IndebtednessNet Proceeds Offer Amount, Notes of tendering Holders will be purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as applicable.
(e) may be required, or such shorter period as may be permitted, by law. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the aggregate amount provisions of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsany securities laws or regulations conflict with Section 4.11 of this Indenture, the Company may use any remaining Excess Proceeds for any purpose shall comply with the applicable securities laws and regulations and shall not prohibited be deemed to have breached its obligations under Section 4.11 of this Indenture by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion virtue of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerocompliance.
Appears in 1 contract
Samples: Indenture (Edgen Murray PLC)
Limitation on Asset Sales. (a) The Company shall Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company Issuer or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; anddisposed;
(2) at least 75.075% of the consideration from such Asset Sale received by the Company Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further such Asset Sale is in the form of cash, Cash Equivalents or a combination thereof and is received at the time of such disposition; provided that, for purposes of this covenant, the following are deemed to be cash:
(a) the assumption of Indebtedness of the Issuer or any Restricted Subsidiary (other than Obligations in respect of Disqualified Capital Stock or Preferred Stock of the Issuer or any Restricted Subsidiary) and the release of the Issuer or such Restricted Subsidiary from all liability thereforon such Indebtedness in connection with such Asset Sale;
(Bb) any securities, notes securities or other obligations or other assets or property received by the Company Issuer or any Restricted Subsidiary from such the transferee that are promptly converted by the Company Issuer or such Restricted Subsidiary into cash or Cash Equivalentscash, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of cash received in that conversion;
(c) cash held in escrow as security for any purchase price settlement, for damages in respect of a breach of representations and warranties or covenants or for payment of other contingent obligations in connection with the Asset Sale to the extent such cash is actually disbursed to the Issuer or Cash Equivalents received), such Restricted Subsidiary in each case within 180 days following accordance with the receipt thereofterms of such escrow; and
(Cd) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Replacement Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) the Issuer shall apply, or cause such Restricted Subsidiary to repayapply, prepay, defease, redeem, reduce, purchase or otherwise retire the Net Cash Proceeds relating to such Asset Sale within 360 days of receipt thereof either:
(and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitmentsa) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided to repay or prepay Indebtedness under Section 3.01the Credit Agreement and permanently reduce the corresponding commitments thereunder, (ii) purchasing Notes through open market purchases (to retire Purchase Money Indebtedness secured by the extent such purchases are at or above 100.0% asset that was the subject of the principal amount thereof), or Asset Sale and/or (iii) making an offer (in accordance with the procedures set forth below for an case where the property or asset that was the subject of such Asset Sale Offer) is the property or asset of a Foreign Restricted Subsidiary, to all Holders to purchase their Notes at 100.0% repay Indebtedness of the principal amount thereof, plus the amount of accrued but unpaid interestsuch Foreign Restricted Subsidiary and, if anysuch debt is revolving credit Indebtedness, on permanently reduce the amount of Notes that would otherwise be prepaidcorresponding commitments thereunder;
(4b) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereofReplacement Assets; or
(6c) any a combination of repayment and investment permitted by the foregoing, provided, that foregoing clauses (3)(a) and (3)(b). Pending the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) final application of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company Issuer may temporarily reduce revolving credit borrowings or invest such Net Cash Proceeds in Cash Equivalents. On the 361st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Issuer or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a), 3(b) or 3(c) of the preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of the preceding paragraph (each a “Net Proceeds Offer Amount”) shall be applied by the Issuer or such Restricted Subsidiary to make an offer to purchase (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders the maximum principal amount at maturity of Notes that may be purchased with the Net Proceeds Offer Amount at a price equal to 100% of the Accreted Value thereof, plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase. If at any time any non-cash consideration received by the Issuer or any Restricted Subsidiary, as applicablethe case may be, has entered in connection with any Asset Sale is converted into and not abandoned or rejected a binding agreement sold or otherwise disposed of for cash (other than interest received with respect to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(bany such non-cash consideration), and that investment, purchase then such conversion or other acquisition is thereafter completed within 180 days after disposition shall be deemed to be an Asset Sale on the end date of such 365-day period.
(c) Notwithstanding conversion or disposition, as the foregoingcase may be, to the extent that repatriation to the United States of any or all of and the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to thereof shall be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance accordance with this covenant. The time periods set forth Issuer may defer any Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $5.0 million resulting from one or more Asset Sales in which case the accumulation of such amount shall constitute a Net Proceeds Offer Trigger Date (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $5.0 million, shall be applied as required pursuant to this covenant shall not start until covenant). To the extent that the aggregate Accreted Value of Notes tendered pursuant to such time as Net Proceeds Offer is less than the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash ProceedsOffer Amount, the Company Issuer and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such use the remaining portion of the Net Cash Proceeds in any manner not prohibited by this IndentureOffer Amount for general corporate purposes. Any amount Upon the completion of each Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within Offer, the time period set forth in Section 4.10(b) Net Proceeds Offer Amount will be deemed to constitute “Excess Proceeds”; provided, that any amount reset at zero. In the event of proceeds offered to Holders pursuant to clause the transfer of substantially all (3but not all) of the property and assets of the Issuer and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after 5.01 that does not constitute a Change of Control, the Asset Sale successor entity shall be deemed to have been applied sold the properties and assets of the Issuer and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it constituted an Asset Sale. The Fair Market Value of such properties and assets of the Issuer or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant. Each notice of a Net Proceeds Offer shall be mailed first class, postage prepaid, to the record Holders as shown on the register of Holders within thirty (30) days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 at maturity in exchange for cash. To the extent Holders properly tender Notes in an amount exceeding the Net Proceeds Offer Amount, Notes of tendering Holders will be purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain open for a period of twenty (20) business days or such longer period as may be required by law. The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.10, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted have breached its obligations under this Section 4.10 by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms virtue of such Indebtedness), in accordance compliance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicablesuch securities laws and regulations.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Samples: Indenture (Verrazano,inc.)
Limitation on Asset Sales. (a) The Company Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company Borrower or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; andof;
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company Borrower or such the applicable Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of Productive Assets, cash or and/or Cash EquivalentsEquivalents and shall be received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the CompanyBorrower’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company Borrower or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSenior Unsecured Obligations) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and for which the Company or such Borrower and its Restricted Subsidiary, as the case may be, Subsidiaries receive a written release from further liability thereforall creditors;
(B) any securities, notes or other obligations or other assets or property received by the Company Borrower or any such Restricted Subsidiary from such transferee that are converted by the Company Borrower or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 180 days of the receipt thereof (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company Borrower or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Valuefair market value, when taken together with all other Designated Noncash Consideration received pursuant to this subclause clause (C) that is at that time outstanding, not to exceed 2.015% of Total Assets, calculated Assets at the time of the receipt of such Designated Noncash Consideration (A) with the Fair Market Value fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value); value and (B) with respect to any Designated Noncash Consideration in excess of $50,000,000, the Board of Directors’ determination of the fair market value of such Designated Noncash Consideration must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing, shall each be deemed to be Cash Equivalents.cash solely for the purposes of this provision or for purposes of the second paragraph of this Section 5.01(i); and
(biii) Within 365 days after upon the Company’s consummation of an Asset Sale, the Borrower shall apply, or any cause such Restricted Subsidiary’s receipt of Subsidiary to apply, the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal relating to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as followswithin 365 days of receipt thereof either:
(1A) if such Net Cash Proceeds are from an Asset Sale to prepay any Credit Facility or any Debt of a Restricted Subsidiary of the Borrower that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateraland, in the case of an Asset Sale by any such Debt under any revolving credit facility, effect a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto corresponding reduction in the case availability under such revolving credit facility (or effect a permanent reduction in the availability under such revolving credit facility regardless of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary the fact that no prepayment is a Non-Guarantor Subsidiary;required in order to do so),
(3B) to repayreinvest in Productive Assets, prepay, defease, redeem, reduce, purchase or otherwise retire or
(C) a combination of prepayment and to correspondingly reduce commitments with respect thereto in investment permitted by the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility foregoing clauses (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the NotesA) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereofB), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Borrower or such Restricted Subsidiaries Subsidiary may temporarily reduce Indebtedness (including Debt under a revolving Debt Facility) credit facility, if any, or otherwise invest or utilize such Net Cash Proceeds in any manner Cash Equivalents. On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Borrower or of such Restricted Subsidiary determines not prohibited by this Indenture. Any to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) or (iii)(C) of the preceding paragraph and prior to the occurrence of the Prepayment Trigger Date (each, a “Prepayment Trigger Date”), such aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been so applied on or invested as provided and within the time period set forth in Section 4.10(bbefore such Prepayment Trigger Date (each, a “Prepayment Offer Amount”) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted offered by the Holders. When Borrower or such Restricted Subsidiary to prepay (the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Prepayment Offer”) to all Holders of Notes and, to on a date (the extent required by “Prepayment Offer Payment Date”) not less than 30 nor more than 60 days following the terms of other Pari Passu Indebtednessapplicable Prepayment Trigger Date, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary GuarantorSenior Unsecured Obligations on a pro rata basis, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the a maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess ProceedsSenior Unsecured Obligations, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as to the date of prepayment that may be provided prepaid with such Prepayment Offer Amount; provided, however, that if at any time any non-cash consideration (including any Designated Noncash Consideration) received by the terms Borrower or any Restricted Subsidiary of the Borrower, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such Indebtednessnon-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 5.01(i). Notwithstanding the procedures set forth in this Indenture or foregoing, if a Prepayment Offer Amount is less than $15,000,000, the agreements governing application of the Pari Passu Indebtedness, Net Cash Proceeds constituting such Prepayment Offer Amount may be deferred until such time as applicable.
(e) To the extent that such Prepayment Offer Amount plus the aggregate amount of Notes all Prepayment Offer Amounts arising subsequent to the Prepayment Trigger Date relating to such initial Prepayment Offer Amount from all Asset Sales by the Borrower and Pari Passu Indebtedness its Restricted Subsidiaries aggregate at least $15,000,000, at which time the Borrower or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all Prepayment Offer Amounts that have been so properly tendered and not withdrawn pursuant deferred to an Asset Sale make a Prepayment Offer is less than (the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If first date the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders all such deferred Prepayment Offer Amounts is equal to $15,000,000 or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will more shall be made by the Company in accordance with Section 3.04(fdeemed to be a Prepayment Trigger Date). Upon completion of any such Asset Sale Prepayment Offer, the amount of Excess Proceeds Prepayment Offer Amount shall be reset at zero. All prepayments under this Section 5.01(i) shall be made together with accrued interest to the date of such prepayment on the principal amount prepaid.
Appears in 1 contract
Limitation on Asset Sales. (a) The Prior to the occurrence of the Fall-Away Event, the Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiaries, as the case may be, such Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale, (as determined at the time of contractually agreeing ii) immediately before and immediately after giving effect to such Asset Sale) , no Default or Event of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
Default shall have occurred and be continuing and (2iii) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary therefor is in the form of cash paid at the closing thereof, provided, however, that this clause (iii) shall not apply if, after giving effect to such Asset Sale, the aggregate principal amount of all notes or similar debt obligations and Fair Market Value of all equity securities received by the Company from all Asset Sales since September 25, 2000 (other than such notes or similar debt obligations and such equity securities converted into or otherwise disposed of for cash and applied in accordance with the second succeeding sentence) would not exceed 2.5% of Consolidated Tangible Assets at such time. The amount (without duplication) of any (x) Indebtedness (other than Subordinated Indebtedness) of the Company or such Subsidiary that is expressly assumed by the transferee in such Asset Sale and with respect to which the Company or such Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt unconditionally released by the Company or a Restricted Subsidiary thereof. For purposes holder of this clause such Indebtedness and (2) the amount of:
(Ay) any liabilities (as shown on the Company’s notes, securities or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other similar obligations or other assets or items of property received by the Company or any Restricted Subsidiary from such transferee that are converted immediately converted, sold or exchanged by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents actually so received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below cash for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) purposes of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (SECTION 4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Samples: Indenture (Healthsouth Corp)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiariesthe applicable Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property equity interests sold or otherwise disposed of pursuant to such Asset Sale; and
(2as determined in good faith by the Company’s Board of Directors), (ii) at least 75.075% of the consideration from such Asset Sale received for the assets sold by the Company or such Restricted the Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets (A) notes received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company as consideration for an Asset Sale that are converted into cash or a Restricted Subsidiary thereof. For purposes Cash Equivalents immediately following the consummation of this clause such Asset Sale, (2B) the amount of:
(A) any assumption by the purchaser of assets pursuant to an Asset Sale of liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated subordinate to the NotesSecurities) or (C) shall, in each case of the immediately preceding clauses (A) and (B), be deemed to be cash or Cash Equivalents at the time of such Asset Sale in an amount equal to, in the case of clause (A), the amount of cash or Cash Equivalents realized on such conversion and, in the case of clause (B), the amount of the liabilities so assumed, as reflected on the balance sheet of the Company, and (iii) following the consummation of an Asset Sale, the Company shall, or shall cause such Subsidiary, within 365 days of receipt thereof either (A) to apply the Net Cash Proceeds related to such Asset Sale to prepay any Indebtedness that are extinguished by its terms is not subordinate to the Securities, (B) to make a Permitted Investment or an investment in connection with properties and assets that replace the transactions properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in a Related Business (collectively, “Replacement Assets”) or (C) a combination of prepayment and investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 365th day after an Asset Sale, or such earlier date, if any, as the Board of Directors of the Company or of such Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset SaleSale as set forth in clauses (iii)(A), (iii) (B) and (iii) (C) of the next preceding sentence (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied on or that are assumed by before the transferee applicable Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of any such assets, property or Capital Stockthe next preceding sentence (or, in each casethe case of a Net Proceeds Offer Trigger Date occurring prior to such 365th day, pursuant the aggregate amount of Net Cash Proceeds that the Board of Directors has determined not to an agreement that releases or indemnifies so apply) (each, a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted SubsidiarySubsidiary to make an offer to purchase (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis (and on a pro rata basis with the holders of Indebtedness of the Company that is not by its terms subordinate to the Securities), that amount of Securities equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Securities to be purchased, plus accrued and unpaid interest and Additional Interest, if any, thereon, if any, to the date of purchase; provided, however, that if at any time any non-cash consideration received by the Company or any Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.17. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $5.0 million resulting from further liability therefor;
one or more Asset Sales (Bat which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $5.0 million, shall be applied as required pursuant to this paragraph). In the event of the transfer of substantially all (but not all) any securitiesof the property and assets of the Company and its Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, notes or other obligations or other the successor corporation shall be deemed to have sold the properties and assets or property received by of the Company and its Subsidiaries not so transferred for purposes of this Section 4.17, and shall comply with the provisions of this Section 4.17 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or any Restricted Subsidiary from such transferee that are converted by its Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.17. Notwithstanding the two immediately preceding paragraphs, the Company or and its Subsidiaries will be permitted to consummate an Asset Sale without complying with such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (paragraphs to the extent (i) at least 75% of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofconsideration for such Asset Sale constitutes Replacement Assets and (ii) such Asset Sale is for fair market value; and
(C) provided that any Designated Noncash Consideration consideration not constituting Replacement Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the two preceding paragraphs. Notice of each Net Proceeds Offer pursuant to this subclause Section 4.17 shall be mailed or caused to be mailed, by first class mail, by the Company within 25 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(Ca) that the Net Proceeds Offer is at being made pursuant to this Section 4.17 and that time outstandingall Securities tendered will be accepted for payment; provided, not to exceed 2.0% however, that if the principal amount of Total AssetsSecurities tendered in the Net Proceeds Offer exceeds the Net Proceeds Offer Amount, calculated at the time of Company shall select the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed Securities to be Cash Equivalents.purchased on a pro rata basis;
(b) Within 365 days the Net Proceeds Offer price (including the amount of accrued interest, if any) and the Net Proceeds Offer Payment Date;
(c) that any Security not tendered will continue to accrue interest;
(d) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Company’s or any Restricted Subsidiary’s receipt Net Proceeds Offer Payment Date;
(e) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Cash Proceeds Offer Payment Date;
(f) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of any Asset Salethe Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Security purchased; and
(g) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment Securities or a Restricted Subsidiaryportions thereof tendered pursuant to the Net Proceeds Offer, at its option(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, may apply plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers’ Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereofprice, plus the amount of accrued but unpaid interest, if any, on thereon and the Trustee shall promptly authenticate and mail to such Holders new Securities equal in principal amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form unpurchased portion of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition Securities surrendered. Any Securities not so accepted shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt mailed by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary Holder thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) . For purposes of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds4.17, the Trustee shall act as the Paying Agent. Any Net Proceeds Offer shall remain open for at least 20 Business Days (or such longer period as may be required by law) and until the close of business on the Net Proceeds Offer Payment Date. The Company or a Restricted Subsidiaryshall comply with all tender offer rules under state and federal securities laws, as applicableincluding, has entered into but not limited to, Section 14(e) under the Exchange Act and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365Rule 14e-day period.
(c) Notwithstanding the foregoingl thereunder, to the extent applicable to such offer. To the extent that repatriation to the United States provisions of any securities laws or all of regulations conflict with the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) foregoing provisions of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash ProceedsIndenture, the Company shall comply with the applicable securities laws and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required regulations and shall not be deemed to be Excess have breached its obligations under the foregoing provisions of this Indenture by virtue of such conflict. Upon completion of a Net Proceeds without regard to Offer, the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Net Cash Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes andreset at zero. Accordingly, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly Securities tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess Net Cash Proceeds, any remaining Net Cash Proceeds held by the Trustee shall be returned by the Trustee to the Company and the Company may use any remaining Excess Net Cash Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerogeneral corporate purposes.
Appears in 1 contract
Samples: Indenture (Leslies Poolmart Inc)
Limitation on Asset Sales. (a) The Company shall will not, and shall will, not permit any of its Restricted Subsidiaries Subsidiary to, consummate make any Asset Sale unless:
unless (1i) the Company or any of its the Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such sale or other disposition at least equal to the Fair Market Value (of the assets sold or disposed of as determined at by the time of contractually agreeing to such Asset Sale) good-faith judgment of the Capital StockBoard of Directors, assets or property sold or otherwise disposed of pursuant to which determination, in each case where such Asset Sale; and
fair market value is greater than $5.0 million, shall be evidenced by a Board Resolution and (2ii) at least 75.075% of the consideration from received for such Asset Sale received by the Company sale or such Restricted Subsidiary, as the case may be, is in the form other disposition consists of cash or Cash Equivalents; providedcash equivalents or the assumption of unsubordinated Indebtedness. The Company shall, howeveror shall cause the relevant Restricted Subsidiary to, to within 360 days after the extent that the assets sold in such Asset Sale were part date of receipt of the CollateralNet Cash Proceeds from an Asset Sale, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2i) the amount of:
(A) any liabilities (as shown on the Company’s or apply an amount equal to such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent Net Cash Proceeds to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) permanently repay unsubordinated Indebtedness of the Company or Indebtedness of any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by owing to a Person other than the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (yB) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or invest an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof)equal amount, or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral so applied pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amountsA) in compliance with this covenant. The time periods set forth long-term property or assets of a nature or type or that are used in this covenant shall not start until such time as a business (or in a company having property and assets of a nature or type, or engaged in a business) similar or related to the Net Cash Proceeds may be repatriated (whether nature or not such repatriation actually occurs).
(d) Pending type of the final application of any such Net Cash Proceedsproperty and assets of, or the business of, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness existing on the date of such investment (including under as determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a revolving Debt FacilityBoard Resolution) or otherwise invest or utilize and (ii) apply (no later than the end of the 360-day period referred to above) such excess Net Cash Proceeds (to the extent not applied pursuant to clause (i)) as provided in the following paragraphs of this Section 1017. The amount of such Net Cash Proceeds required to be applied (or to be committed to be applied) during such 360-day period in any the manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(bclause (i) will be deemed to of the preceding sentence and not applied as so required by the end of such period shall constitute “"Excess Proceeds”; provided." If, that as of the first day of any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When calendar month, the aggregate amount of Excess Proceeds exceeds not theretofore subject to an Excess Proceeds Offer (as defined below) totals at least $50.0 10.0 million, the Company will be required to must, not later than the 30th Business Day thereafter, make an offer (“Asset Sale an "Excess Proceeds Offer”") to all purchase from the Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make on a pro rata basis an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum aggregate principal amount of Notes and any such Pari Passu Indebtedness equal to which the Asset Sale Offer applies that may be purchased out Proportionate Share of the Excess ProceedsProceeds on such date, at an offer a purchase price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness plus Notes, plus, in each case, accrued and unpaid interest to (but not including) the date of purchase (the "Excess Proceeds Payment"). The Company shall commence an Excess Proceeds Offer by mailing a notice to the Trustee and each Holder stating:
(i) that the Excess Proceeds Offer is being made pursuant to this Section 1017 and that all Notes validly tendered will be accepted for payment on a pro rata basis;
(ii) the purchase price and the date of purchase (which shall be a Business Day no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the "Excess Proceeds Payment Date");
(iii) that any Note not tendered will continue to accrue interest pursuant to its terms;
(iv) that, unless the Company defaults in the payment of the Excess Proceeds Payment, any Note accepted for payment pursuant to the Excess Proceeds Offer shall cease to accrue interest on and after the Excess Proceeds Payment Date;
(v) that Holders electing to have a Note purchased pursuant to the Excess Proceeds Offer will be required to surrender the Note, together with the form entitled "Option of the Holder to Elect Purchase" on the reverse side of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day immediately preceding the Excess Proceeds Payment Date;
(vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the third Business Day immediately preceding the Excess Proceeds Payment Date, a telegram, facsimile transmission or letter setting forth the name of such lesser Holder, the principal amount of Notes delivered for purchase and a statement that such Holder is withdrawing his election to have such Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; provided that each Note purchased and each new Note -------- issued shall be in a principal amount of $1,000 or integral multiples thereof. On the Excess Proceeds Payment Date, the Company shall
(i) accept for payment on a pro rata basis Notes or portions thereof tendered pursuant to the Excess Proceeds Offer up to the Proportionate Share of such Excess Proceeds;
(ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so accepted; and
(iii) deliver, or cause to be delivered, to the Trustee all Notes or portions thereof so accepted together with an Officer's Certificate specifying the Notes or portions thereof accepted for payment by the Company. The Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall upon Company Order, promptly authenticate and mail to such Holders a new Note equal in principal amount to any unpurchased portion of the Note surrendered; provided that each Note purchased and each new Note issued -------- shall be in a principal amount of $1,000 or integral multiples thereof. The Company will publicly announce the results of the Excess Proceeds Offer as soon as practicable after the Excess Proceeds Payment Date. For purposes of this Section 1017, the Trustee shall act as the Paying Agent. The Company will comply with Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable, in the event that such Excess Proceeds are received by the Company under this Section 1017 and the Company is required to repurchase Notes as described above. SECTION 1018. Limitation on Issuances of Guarantees of Indebtedness ----------------------------------------------------- by Restricted Subsidiaries. -------------------------- The Company will not permit any Restricted Subsidiary, directly or indirectly, to guarantee, assume or in any other manner become liable with respect to any Indebtedness of the Company, other than Indebtedness under Credit Facilities incurred under clauses (i) and (ii) of Section 1011, unless (i) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to the Indenture providing for a Guarantee of the Notes on terms substantially similar to the guarantee of such Indebtedness, except that if such Indebtedness is by its express terms subordinated in right of payment to the Notes, any such assumption, Guarantee or other liability of such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Restricted Subsidiary's assumption, Guarantee of other liability with respect to the Pari Passu Indebtedness, if any, Notes substantially to the same extent as may be provided by such Indebtedness is subordinated to the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered (ii) such Restricted Subsidiary waives, and will not withdrawn pursuant to an Asset Sale Offer is less than in any manner whatsoever claim or take the Excess Proceedsbenefit or advantage of, any rights or reimbursement, indemnity or subrogation or any other rights against the Company or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guarantee. Notwithstanding the foregoing, any Guarantee by a Restricted Subsidiary may use provide by its terms that it will be automatically and unconditionally released and discharged upon (i) any remaining Excess Proceeds for sale, exchange or transfer, to any purpose Person not an Affiliate of the Company, of all of the Company's and each Restricted Subsidiary's Capital Stock in, or all or substantially all of the assets of, such Restricted Subsidiary (which sale, exchange or transfer is not prohibited by this the Indenture. If ) or (ii) the aggregate principal amount release or discharge of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by guarantee which resulted in the Company in accordance with Section 3.04(f). Upon completion creation of such Asset Sale OfferGuarantee, the amount except a discharge or release by or as a result of Excess Proceeds shall be reset at zeropayment under such guarantee.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such (as determined in good faith by the Company’s senior management or, in the case of an Asset Sale; andSale in excess of $5.0 million, the Board of Directors of the Company);
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of (x) cash or Cash Equivalents; provided, however, to the extent that the (y) properties and assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt owned by the Company or any of its Restricted Subsidiaries and used in a Permitted Business or (z) Capital Stock in one or more Persons engaged in a Permitted Business that are or thereby become Restricted Subsidiary thereof. For purposes Subsidiaries of this clause (2) the Company, and, in each case, such consideration is received at the time of such disposition; provided that the amount of:
of (Aa) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
and (Bb) any securities, notes or other obligations or other assets or property securities received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 180 days after such Asset Sale (to the extent of the cash or Cash Equivalents received), in each case within 180 days following ) shall be deemed to be cash for the receipt thereofpurposes of this provision only; and
(Ciii) any Designated Noncash Consideration received by upon the Company or any consummation of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale (or any portion thereof) as followswithin 360 days of receipt thereof either:
(1A) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (repay Indebtedness under the Credit Agreement and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) or to repay Indebtedness of the Company (other than Indebtedness subordinated to any Disqualified Stock or Subordinated ObligationsIndebtedness) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured permitted by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (this Indenture and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiarythereto;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4B) to make an investment in, purchase or otherwise acquire any one or more businesses, assets Investment (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress paymentsx) in connection with properties and assets that replace the properties and assets that were the subject of such investmentAsset Sale, purchase or other acquisition; provided, (y) in properties and assets that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not will be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt used by the Company or a Restricted Subsidiary thereof;
in a Permitted Business or (5z) to make an investment inpermitted by clause (1) of the definition of “Permitted Investments” (collectively, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof“Replacement Assets”); or
(6C) any a combination of the foregoing, provided, that the Company prepayment and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined investment permitted by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause foregoing clauses (xiii)(A) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States and (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriationiii)(B), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such the Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any On the 361st day after an Asset Sale or such earlier date, if any, as the senior management or the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (iii)(A), (iii)(B) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3iii)(C) of Section 4.10(bthe next preceding paragraph (each a “Net Proceeds Offer Amount”) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with (the proceeds “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from any Asset Saleall Holders on a pro rata basis, to purchase the maximum principal that amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount Securities equal to 100.0the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes and Pari Passu Indebtedness Securities to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; provided, however, that if the Company is required by the terms of any Indebtedness that ranks pari passu with the Securities, such IndebtednessNet Proceeds Offer may be made ratably to purchase the Securities and such other Indebtedness of the Company that ranks pari passu with the Securities. If at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder as of the date of such conversion or disposition and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.18. The Company may defer the procedures Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to the second preceding paragraph). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.1, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.18, and shall comply with the provisions of clause (iii) of this Section 4.18 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.18. Notice of each Net Proceeds Offer pursuant to this Section 4.18 shall be mailed or caused to be mailed, by first class mail, by the Company within 25 days following the applicable Net Proceeds Offer Trigger Date to the record Holders as shown on the register of Holders at their last registered address, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. The notice shall contain all instructions and materials necessary to enable such Holder to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(i) that Holders may elect to have their Securities purchased by the Company either in whole or in part (subject to prorationing as hereinafter described in the event the Net Proceeds Offer is oversubscribed) in integral multiples of $1,000 of principal amount, at the applicable purchase price;
(ii) that the Net Proceeds Offer is being made pursuant to this Section 4.18 and that all Securities tendered will be accepted for payment; provided, however, that if the principal amount of Securities tendered in the Net Proceeds Offer exceeds the aggregate amount of the Net Proceeds Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis (based on amounts tendered);
(iii) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the Net Proceeds Offer Trigger Date, other than as may be required by applicable law);
(iv) that any Security not tendered will continue to accrue interest;
(v) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(vi) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(vii) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Security purchased; and
(viii) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers’ Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the purchase price, plus accrued interest, if any, thereon set forth in the notice of such Net Proceeds Offer. Any Security not so accepted shall be promptly mailed by the Company to the Holder thereof. For purposes of this Indenture or Section 4.18, the agreements governing Trustee shall act as the Pari Passu Indebtedness, as applicable.
(e) Paying Agent. Any amounts remaining after the purchase of Securities pursuant to a Net Proceeds Offer shall be returned by the Trustee to the Company. To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly the Securities tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess such excess Net Proceeds Offer Amount for general corporate purposes or for any purpose other purposes not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.18, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.18 by virtue thereof. The provisions of this Section 4.18 and other provisions contained in this Indenture relating to the Company’s obligation to make a Net Proceeds Offer may be waived or modified with the written consent of the Holders of a majority in principal amount of the Securities.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2as determined in good faith by the Company's Board of Directors) and (ii) at least 75.085% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and is received at the time of the consummation of any such Asset Sale; providedPROVIDED, howeverHOWEVER, to the extent that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated (i) Indebtedness subordinate in right of payment to the Notes, (ii) that are extinguished in connection with contingent liabilities, (iii) liabilities or Indebtedness to Affiliates of the transactions relating to such Asset Sale, Company and (iv) non-recourse Indebtedness or other non-recourse liabilities) that are assumed by the transferee of any such assetsassets and (y) to the extent of the cash received, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalentswithin 60 days of receipt, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after cash for purposes of this provision; PROVIDED, FURTHER, HOWEVER, that the Company’s 85% limitation referred to above shall not apply to any sale, transfer or any Restricted Subsidiary’s receipt other disposition of assets in which the cash portion of the Net Cash Proceeds consideration received therefor, determined in accordance with the foregoing proviso, is equal to or greater than what the after-tax net proceeds would have been had such transaction complied with the aforementioned 85% limitation. Upon the consummation of any an Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale within 360 days of receipt thereof either (A) to reinvest in Productive Assets, or (B) to prepay or repay Indebtedness of the Company which ranks PARI PASSU with the Notes or to prepay or repay any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not Indebtedness of a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness Restricted Subsidiary of the Company (other than any Disqualified Stock or Subordinated Obligationsnon-recourse Indebtedness) that is secured by a Lien on assets that do in an amount not constitute a part to exceed the product of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (yA) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required and (B) a fraction, the numerator of which is the total aggregate principal amount of such PARI PASSU Indebtedness or such Indebtedness of Restricted Subsidiaries and the denominator of which is the aggregate of all such Indebtedness plus the aggregate Accreted Value (if the Net Proceeds Offer Payment Date is prior to be applied in compliance with this covenant; provided that clause June 15, 2000) or the aggregate principal amount (xif the Net Proceeds Offer Payment Date is on or after June 15, 2000) of this paragraph shall apply to the Notes then outstanding. On the 361st day after an Asset Sale or such amounts so longearlier date, but only so longif any, as the applicable local law will not permit repatriation to the United States (Board of Directors of the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is Subsidiary determines not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as apply the Net Cash Proceeds may be repatriated relating to such Asset Sale as set forth in clauses (whether or not A) and (B) of the preceding sentence (each a "NET PROCEEDS OFFER TRIGGER DATE"), such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (A) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3B) of Section 4.10(bthe preceding sentence (each a "NET PROCEEDS OFFER AMOUNT") or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with (the proceeds "NET PROCEEDS OFFER") on a date (the "NET PROCEEDS OFFER PAYMENT DATE") not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from any Asset Sale, to purchase the maximum principal all Holders on a PRO RATA basis that amount of Notes and any such Pari Passu Indebtedness equal to which the Asset Sale Net Proceeds Offer applies that may be purchased out of the Excess Proceeds, Amount at an offer a price in cash in an amount equal to 100.0100% of the Accreted Value of the Notes on the Net Proceeds Offer Payment Date (if prior to June 15, 2000) or 100% of the principal amount of thereof (if the Notes and Pari Passu Indebtedness Net Proceeds Offer Payment Date is on or after June 15, 2000) to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; PROVIDED, HOWEVER, that if at any time any non-cash consideration received by the terms Company or any Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash, then such Indebtedness), conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) Section 4.16. To the extent that the Accreted Value of Notes on the Net Proceeds Offer Payment Date (if prior to June 15, 2000) or the aggregate principal amount of Notes and Pari Passu Indebtedness so properly (if the Net Proceeds Offer Payment Date is on or after June 15, 2000) tendered and not withdrawn pursuant to an Asset Sale the Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess Proceeds proceeds of such Asset Sale for any purpose not prohibited by general corporate purposes (but subject to the terms of this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale a Net Proceeds Offer, the Net Proceeds Offer Amount relating to such Net Proceeds Offer shall be deemed to be zero for purposes of any subsequent Asset Sale. Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $5,000,000, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of Excess all Net Proceeds Offer Amounts arising subsequent to the Issue Date of the Notes from all Asset Sales by the Company and its Subsidiaries in respect of which a Net Proceeds Offer has not been made aggregates at least $5,000,000, at which time the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (each date on which the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $5,000,000 or more shall be reset at zerodeemed to be a Net Proceeds Offer Trigger Date). In connection with any Asset Sale with respect to assets having a book value in excess of $5,000,000 or as to which it is expected that the aggregate consideration therefor to be received by the Company or any Restricted Subsidiary will exceed $5,000,000 in value, such transaction or series of transactions shall be approved, prior to the consummation thereof, by the Board of Directors of the Company. In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale; PROVIDED, HOWEVER, that to the extent that the Company is required to make an offer to repurchase the Notes pursuant to Section 4.15 in connection with any transaction that would otherwise be within the terms of this paragraph, the Company need not comply with the provisions of this paragraph. In addition, the fair market value of such properties and assets of the Company or its Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant.
Appears in 1 contract
Samples: Indenture (Cellnet Data Systems Inc)
Limitation on Asset Sales. (ai) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such (as determined in good faith by the Company’s senior management or, in the case of an Asset Sale; andSale in excess of $5.0 million, the Board of Directors of the Company);
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of (x) cash or Cash Equivalents; provided, however, to the extent that the (y) properties and assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt owned by the Company or any of its Restricted Subsidiaries and used in a Permitted Business or (z) Capital Stock in one or more Persons engaged in a Permitted Business that are or thereby become Restricted Subsidiary thereof. For purposes Subsidiaries of this clause (2) the Company, and, in each case, such consideration is received at the time of such disposition; provided that the amount of:
of (Aa) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
and (Bb) any securities, notes or other obligations or other assets or property securities received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 180 days after such Asset Sale (to the extent of the cash or Cash Equivalents received), received in each case within 180 days following the receipt thereofconversion) shall be deemed to be cash for the purposes of this provision only; and
(Ciii) any Designated Noncash Consideration received by upon the Company or any consummation of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale (or any portion thereof) as followswithin 360 days of receipt thereof either:
(1A) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase prepay any Senior Debt or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than Guarantor Senior Debt or any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of CollateralGuarantor and, in the case of an Asset Sale by any Senior Debt or Guarantor Senior Debt or Indebtedness of a Restricted Subsidiary that is not a Non-Guarantor Subsidiaryunder any revolving credit facility, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto effect a permanent reduction in the case availability under such revolving credit facility (or effect a permanent reduction in the availability under such revolving credit facility regardless of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary the fact that no prepayment is a Non-Guarantor Subsidiaryrequired);
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4B) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress paymentsx) in connection with properties and assets that replace the properties and assets that were the subject of such investmentAsset Sale, purchase or other acquisition; provided, (y) in properties and assets that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not will be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt used by the Company or a Restricted Subsidiary thereof;
in a Permitted Business or (5z) to make an investment inpermitted by clause (1) of the definition of Permitted Investments (collectively, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof“Replacement Assets”); or
(6C) any a combination of the foregoing, provided, that the Company prepayment and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined investment permitted by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause foregoing clauses (xiii)(A) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States and (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriationiii)(B), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such the Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any On the 361st day after an Asset Sale or such earlier date, if any, as the senior management or the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (iii)(A), (iii)(B) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3iii)(C) of Section 4.10(bthe next preceding paragraph (each a “Net Proceeds Offer Amount”) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with (the proceeds “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from any Asset Saleall Holders on a pro rata basis, to purchase the maximum principal that amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount Securities equal to 100.0the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes and Pari Passu Indebtedness Securities to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; provided, however, that if the Company so elects or is required by the terms of any Senior Subordinated Debt, such IndebtednessNet Proceeds Offer may be made ratably to purchase the Securities and such other Indebtedness of the Company that ranks pari passu with the Securities. If at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder as of the date of such conversion or disposition and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.17. The Company may defer the procedures Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to the second preceding paragraph). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section, and shall comply with the provisions of clause (iii) of this Section 4.17 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.17. Notice of each Net Proceeds Offer pursuant to this Section 4.17 shall be mailed or caused to be mailed, by first class mail, by the Company within 25 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(i) that Holders may elect to have their Securities purchased by the Company either in whole or in part (subject to prorationing as hereinafter described in the event the Net Proceeds Offer is oversubscribed) in integral multiples of $1,000 of principal amount ($1.00 in the case of PIK Notes), at the applicable purchase price;
(ii) that the Net Proceeds Offer is being made pursuant to this Section 4.17 and that all Securities tendered will be accepted for payment; provided, however, that if the principal amount of Securities tendered in the Net Proceeds Offer exceeds the aggregate amount of the Net Proceeds Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis (based on amounts tendered);
(iii) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the Net Proceeds Offer Trigger Date, other than as may be required by applicable law);
(iv) that any Security not tendered will continue to accrue interest;
(v) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(vi) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(vii) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Xxxxxx is withdrawing his election to have such Security purchased; and
(viii) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers’ Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the purchase price, plus accrued interest, if any, thereon set forth in the notice of such Net Proceeds Offer. Any Security not so accepted shall be promptly mailed by the Company to the Holder thereof. For purposes of this Indenture or Section 4.17, the agreements governing Trustee shall act as the Pari Passu Indebtedness, as applicable.
(e) Paying Agent. Any amounts remaining after the purchase of Securities pursuant to a Net Proceeds Offer shall be returned by the Trustee to the Company. To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly the Securities tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess such excess Net Proceeds Offer Amount for general corporate purposes or for any purpose other purposes not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.17, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.17 by virtue thereof. The provisions of this Section 4.17 and other provisions contained in this Indenture relating to the Company’s obligation to make a Net Proceeds Offer may be waived or modified with the written consent of the Holders of a majority in principal amount of the Securities.
Appears in 1 contract
Samples: Indenture (Quality Distribution Inc)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale(as determined in good faith by the Company's Board of Directors); and
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and from which the Company or such and its Restricted Subsidiary, as the case may be, from further liability therefor;
Subsidiaries are unconditionally released and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are promptly, but in no event more than 60 days after receipt, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
cash for purposes of this provision; and (biii) Within 365 days after upon the Company’s or any Restricted Subsidiary’s receipt consummation of the Net Cash Proceeds of any an Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale within 365 days of receipt thereof either (or any portion thereofA) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) prepay Senior Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Senior Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateraland, in the case of any Senior Indebtedness or Guarantor Senior Indebtedness under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility, (B) to reinvest in Productive Assets, or (C) a combination of prepayment and investment permitted by the foregoing clauses (iii) (A) and (iii) (B). On the 366th day after an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiaryor such earlier date, to repayif any, prepay, defease, redeem, reduce, purchase as the Board of Directors of the Company or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) determines not to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with apply the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject relating to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged Sale as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until clauses (iii) (A), (iii) (B) and (iii) (C) of the immediately preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (iii) (A), (iii) (B) and within the time period set forth in Section 4.10(b(iii) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3C) of Section 4.10(bthe immediately preceding sentence (each a "Net Proceeds Offer Amount") or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with for cash (the proceeds "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from any Asset Sale, to purchase the maximum principal all Holders on a pro rata basis at least that amount of Notes and any such Pari Passu Indebtedness equal to which the Asset Sale Note Offer applies that may be purchased out of the Excess Proceeds, Amount at an offer a price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; provided, however, that if at any time any non-cash consideration received by the terms Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such Indebtednessnon-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant covenant. Any offer to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will with respect to Other Debt shall be made by the Company in accordance and consummated concurrently with Section 3.04(f). Upon completion of such Asset Sale any Net Proceeds Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, consummate any Asset Sale unless:
Sale, unless (1i) the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, Subsidiary is in the form of cash or Cash Equivalents; provided, however, at least equal to the extent that fair market value of the assets sold in such Asset Sale were part or disposed of and (ii) at least 75% of the Collateralconsideration received consists of (a) cash or Temporary Cash Investments, (b) the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant assumption of Indebtedness or other obligations (other than Indebtedness subordinated to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the CompanyNotes) of the Company or any Guarantor or Indebtedness of any other Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an any Affiliate of the Company);
(2) if ; provided that the Company, such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Guarantor or such other Restricted Subsidiary that is a Non-Guarantor Subsidiaryirrevocably and unconditionally released from all liability under such Indebtedness, to repay(c) Replacement Assets, prepayand/or (d) any securities, defease, redeem, reduce, purchase notes or otherwise retire (and to correspondingly reduce commitments with respect thereto in other similar obligations received by the case of revolving borrowings) Indebtedness of Company or any such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to which are converted by the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases any such Restricted Subsidiary into cash (to the extent such purchases are at or above 100.0% of the principal cash received in that conversion) within 30 days of the applicable Asset Sale. Notwithstanding the foregoing, the 75% limitation referred to in clause (ii) above shall not apply to any Asset Sale in which the amount thereof)of consideration of the type referred to in clauses (a) through (d) of the preceding paragraph received therefrom, or (iii) making an offer (determined in accordance with the procedures set forth below for an foregoing provision, is equal to or greater than what the after-tax proceeds would have been had such Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired complied with the aforementioned 75% limitation. Within twelve months after the date of receipt of Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make from an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company may, or a may cause the relevant Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.Subsidiary to:
(cA) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly to permanently repay Senior Indebtedness of the Company or any Guarantor or Indebtedness of any other Restricted Subsidiary (or permanently reduce the commitments thereunder, in the case of any revolving credit facility available pursuant to the Credit Agreement or otherwise), in each case owing to a Person other than the Company or any Restricted Subsidiary, or
(B) invest an equal amount, or the amount not so applied pursuant to clause (net A) (or enter into a definitive agreement committing to so invest within 12 months after the date of additional taxes that would be payable or reserved against as a result of repatriating such amounts) agreement), in compliance with this covenantReplacement Assets. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application amount of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not available to be applied (or invested to be committed to be applied) during such 12-month period as provided and within the time period set forth in Section 4.10(bthe preceding sentence and not applied (or committed) will be deemed to as so required by the end of such period shall constitute “"Excess Proceeds”; provided." If, that as of the last day of any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When calendar month, the aggregate amount of Excess Proceeds exceeds not theretofore subject to an Offer to Purchase pursuant to this Section 4.10 totals at least $50.0 10 million, the Company will be required must commence, not later than 30 days after such date, and consummate an Offer to make an offer Purchase from the Holders (“Asset Sale Offer”) to all Holders of Notes and, to the extent and if required by the terms of other any Indebtedness that is pari passu with the Notes ("Pari Passu Indebtedness"), to all from the holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at Indebtedness) on a pro rata basis an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof (and other Pari Passu Indebtedness surrendered by Holders or lendersIndebtedness) equal to the Excess Proceeds on such date, collectivelyat a purchase price equal to 100% of their principal amount, exceeds plus, in each case, accrued interest (if any) to the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f)Payment Date. Upon completion of such Asset Sale Offerthe Offer to Purchase, the amount of Excess Proceeds shall will be reset at zero, and any Excess Proceeds remaining after consummation of the Offer to Purchase may be used for any purpose not otherwise prohibited by this Indenture.
Appears in 1 contract
Samples: Indenture (VHS of Phoenix Inc)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries toto consummate an Asset Sale, consummate any Asset Sale unless:
: (1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, property or assets or property issued, sold or otherwise disposed of pursuant to such Asset Sale(as deter- mined in good faith by the Company's Board of Directors); and
and (2) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash Equivalents; provided, howeverReplacement Assets or any combination of the foregoing received at the time of such disposition. Following the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the extent that the assets sold in Net Cash Proceeds relating to such Asset Sale within 360 days of receipt thereof either: (a) to prepay any Senior Debt, any Guarantor Senior Debt or any then outstanding Existing Notes and, in the case of any Senior Debt or any Guarantor Senior Debt under any revolv- ing credit facility, effect a permanent reduction in the avail- ability under such revolving credit facility; (b) acquire properties and assets (including Asset Ac- quisitions or capital expenditures) that replace the properties and assets that were part the subject of such Asset Sale or proper- ties and assets that will be used in the business of the Collateral, Com- pany and its Restricted Subsidiaries as existing on the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to Issue Date or in businesses reasonably related thereto ("Replacement Assets"); and/or (c) any combination of the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereofforegoing. For purposes of this clause (2) above, the amount of:
(A) of any liabilities (liabili- ties, as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than con- tingent liabilities and liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, assets and any cash proceeds in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) respect of any securities, notes or other obligations or other assets or property received re- ceived by the Company or any such Restricted Subsidiary from such transferee trans- feree that are converted into cash within 30 days following the consumma- tion of such Asset Sale, to the extent of the cash received by the Company or such Restricted Subsidiary into in that conversion, shall be deemed to con- stitute cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the disposition. Any Net Cash Proceeds resulting from Asset Sales consummated after the Issue Date that are not timely applied as permitted in the two preceding paragraphs shall constitute "Excess Proceeds". If on any date (an "Excess Proceeds Offer Trigger Date") the aggregate amount of Excess Proceeds, excluding any Asset Saleamounts thereof previously applied pursuant to this paragraph, exceeds $10.0 million, the Company or and/or a Restricted SubsidiarySubsidi- ary shall, at its optionwithin 30 days thereafter, may apply make an amount equal to offer (the Net Cash "Excess Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3Offer") to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter from all Holders on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount price equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness to be purchased, plus accrued and unpaid interest to (but not including) thereon, the date maximum principal amount of purchase (or Notes that can be so purchased at such lesser price with respect such Excess Proceeds (the "Excess Pro- ceeds Offer Amount"). Each Excess Proceeds Offer will be mailed to the Pari Passu Indebtednessrecord Holders as shown on the register of Holders, if anywith a copy to the Trustee, as may be provided by the terms of such Indebtedness), in accordance and shall comply with the procedures set forth in this Indenture Section 4.02. Upon receiving no- xxxx of the Excess Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 in exchange for cash. To the agreements governing extent Holders properly tender Notes in an amount exceeding the Pari Passu IndebtednessEx- cess Proceeds Offer Amount, Notes of tendering Holders shall be purchased on a pro rata basis (based on amounts tendered). Any Excess Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as applicable.
(e) may be required by law. The Company will comply with the requirements of Rule 14e-1 un- der the Exchange Act and any other securities laws and regulations thereun- der to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to an Excess Proceeds Offer. To the extent that the aggregate amount provisions of Notes any securities laws or regulations conflict with the provisions of Section 4.02 and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsthis Section 5.03, the Company may use any remaining Excess Proceeds for any purpose shall comply with the applicable securities laws and regulations and shall not prohibited be deemed to have breached its obligations under the provisions of Sec- tion 4.02 and this Section 5.03 by this Indenturevirtue thereof. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.5.04
Appears in 1 contract
Samples: First Supplemental Indenture (Hollywood Entertainment Corp)
Limitation on Asset Sales. (a) The Company Companies shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, consummate any Asset Sale unless:
other than (1i) as the result of a Casualty Event (or settlement of either thereof) or (ii) one or more Real Property Transfers or Subsidiary Equity Sales (collectively, "Permitted Asset Sales") meeting the requirements of this Section 4.09. The Companies may, and may permit their Subsidiaries to, consummate any Permitted Asset Sale so long as (x) the Company Companies or any of its Restricted Subsidiaries, as the case may be, such Subsidiary receives consideration at the time of such Permitted Asset Sale at least equal to the Fair Market Value (as determined at of the time of contractually agreeing to assets included in such Permitted Asset Sale, (y) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0not less than 67% of the consideration from such Asset Sale received by the Companies and its Subsidiaries pursuant to such Permitted Asset Sale (if other than a Casualty Event) is in the form of cash or Cash Equivalents and (z) such Net Available Proceeds are applied to the redemption of Notes (or deposited into a cash collateral account with the Trustee) as required pursuant to Section 3.08 hereof. If at any time any non-cash consideration is received by any Company or such Restricted any Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such any Permitted Asset Sale, the Trustee shall hold such consideration in trust hereunder as collateral security for the obligations of the Companies in respect of the Notes; provided that at the time such consideration is repaid or that are assumed by the transferee converted into or sold or otherwise disposed of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (other than interest received with respect to the extent of the any such non-cash or Cash Equivalents receivedconsideration), in each case within 180 days following then the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt date of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s repayment, conversion or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount the date of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an a Permitted Asset Sale Offer made at any time after hereunder, and the Asset Sale Net Available Proceeds thereof shall be deemed applied in accordance with this Section 4.09. Anything herein to have been applied as required and the contrary notwithstanding, the provisions of this Section 4.09 shall not be deemed applicable to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“any Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture Excluded Entities or the agreements governing the Pari Passu Indebtedness, as applicableany Equity Interests therein.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Samples: Indenture (Sac Holding Corp)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company's Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent PROVIDED that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesNotes and other than liabilities consisting of Disqualified Capital Stock) that are extinguished in connection with the transactions relating to such Asset Sale, or (i) that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and from which the Company and its Restricted Subsidiaries are unconditionally released or (ii) in respect of which neither the Company nor any Restricted Subsidiary following such Restricted Subsidiary, as the case may be, from further liability therefor;
sale has any obligation and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are promptly, but in no event more than 60 days after receipt, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofshall be deemed to be cash for purposes of this provision; and
(C3) any Designated Noncash Consideration received by upon the Company or any consummation of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale (or any portion thereof) as followswithin 360 days of receipt thereof either:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Samples: Indenture (Big Flower Digital Services Delaware Inc)
Limitation on Asset Sales. (a) The Company At any time other than during a Suspension Period, the Issuer shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
(1) the Company Issuer or any of its such Restricted Subsidiaries, as the case may be, Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to included in such Asset Sale; and
(2) at least 75.075% of the total consideration from received in such Asset Sale received consists of cash or Cash Equivalents. For purposes of clause (2), the following shall be deemed to be cash:
(a) the amount (without duplication) of any Indebtedness of the Issuer or such Restricted Subsidiary that is assumed (expressly or by operation of law) by the Company transferee in such Asset Sale and with respect to which the Issuer or such Restricted Subsidiary, as the case may be, is in no longer liable,
(b) the form amount of any obligations received from such transferee that are within 180 days converted by the Issuer or such Restricted Subsidiary to cash or Cash Equivalents; provided, however, (to the extent that the assets sold in such Asset Sale were part of the Collateralcash actually so received), and
(c) the Fair Market Value of any assets received as by the Issuer or any Restricted Subsidiary to be used by it in the Permitted Business. If at any time any non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt received by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company Issuer or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to of the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted SubsidiaryIssuer, as the case may be, from further liability therefor;
in connection with any Asset Sale is repaid or converted into or sold or otherwise disposed of for cash (B) other than interest received with respect to any securitiessuch non-cash consideration), notes then the date of such repayment, conversion or other obligations or other assets or property received by disposition shall be deemed to constitute the Company date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be applied in accordance with this Section 4.10. If the Issuer or any Restricted Subsidiary from such transferee that are converted by engages in an Asset Sale, the Company Issuer or such Restricted Subsidiary into cash shall, no later than 365 days following the consummation thereof, apply all or Cash Equivalentsany of the Net Available Proceeds therefrom to:
(1) satisfy all mandatory repayment obligations under the Credit Agreement arising by reason of such Asset Sale;
(2) repay any Indebtedness which was secured by the assets sold in such Asset Sale;
(3) invest all or any part of the Net Available Proceeds thereof in the purchase of assets to be used by the Issuer or any Restricted Subsidiary in the Permitted Business; and/or
(4) in the case of any Restricted Subsidiary that is not a Guarantor, repay Indebtedness of such Restricted Subsidiary. The amount of Net Available Proceeds not applied or by their terms are invested as provided in this paragraph will constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds equals or exceeds $20.0 million, the Issuer will be required to be satisfied for cash make an offer to purchase from all Holders and, if applicable, redeem (or Cash Equivalents (make an offer to the extent do so) any Pari Passu Indebtedness of the cash Issuer the provisions of which require the Issuer to redeem such Indebtedness with the proceeds from any Asset Sales (or Cash Equivalents receivedoffer to do so), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% principal amount of Total Assets, calculated at the time of the receipt of Notes and such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount Pari Passu Indebtedness equal to the Net Cash amount of such Excess Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such the Issuer will (a) make an offer to purchase (a "Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3Offer") to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (all Holders in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b)Indenture, and that investment, purchase (b) redeem (or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”to do so) to all Holders of Notes and, to the extent required by the terms of any such other Pari Passu Indebtedness, pro rata in proportion to all holders the respective principal amounts of the Notes and such other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantorrequired to be redeemed, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased redeemed out of the amount (the "Payment Amount") of such Excess Proceeds, at an ;
(2) the offer price for the Notes will be payable in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided by to the terms of date such IndebtednessNet Proceeds Offer is consummated (the "Offered Price"), in accordance with the procedures set forth in this Indenture or and the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and redemption price for such Pari Passu Indebtedness so properly (the "Pari Passu Indebtedness Price") shall be as set forth in the related documentation governing such Indebtedness;
(3) if the aggregate Offered Price of Notes validly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount pro rata portion of Excess Proceedsthe Payment Amount allocable to the Notes, selection of Notes for purchase to be purchased will be made by the Company selected on a pro rata basis; and
(4) upon completion of such Net Proceeds Offer in accordance with Section 3.04(f). Upon completion of such Asset Sale Offerthe foregoing provisions, the amount of Excess Proceeds with respect to which such Net Proceeds Offer was made shall be reset deemed to be zero. To the extent that the sum of the aggregate Offered Price of Notes tendered pursuant to a Net Proceeds Offer and the aggregate Pari Passu Indebtedness Price paid to the holders of such Pari Passu Indebtedness is less than the Payment Amount relating thereto (such shortfall constituting a "Net Proceeds Deficiency"), the Issuer may use the Net Proceeds Deficiency, or a portion thereof, for general corporate purposes, subject to the provisions of this Indenture. In the event of the transfer of substantially all (but not all) of the assets of the Issuer and the Restricted Subsidiaries as an entirety to a Person in a transaction covered by and effected in accordance with Section 5.01, the successor corporation shall be deemed to have sold for cash at zeroFair Market Value the assets of the Issuer and the Restricted Subsidiaries not so transferred for purposes of this Section 4.10, and shall comply with the provisions of this Section 4.10 with respect to such deemed sale as if it were an Asset Sale (with such Fair Market Value being deemed to be Net Available Proceeds for such purpose). The Issuer will comply with applicable tender offer rules, including the requirements of Rule 14e-1 under the Exchange Act and any other applicable laws and regulations in connection with the purchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.10, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.10 by virtue of this compliance.
Appears in 1 contract
Samples: Indenture (Massey Energy Co)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its the Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2as determined in good faith by the Company's Board of Directors), (ii) at least 75.080% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; providedPROVIDED, howeverHOWEVER, to the extent that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orthereto), if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any in such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies Asset Sale and from which the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
Subsidiary is released and (B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are immediately converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
cash for the purposes of this provision; and (biii) Within 365 days after upon the Company’s or any Restricted Subsidiary’s receipt consummation of the Net Cash Proceeds of any an Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale within 360 days of receipt thereof either (or A) to prepay any portion thereofIndebtedness ranking at least PARI PASSU with the Notes (including amounts under the Credit Facility) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateraland, in the case of any such Indebtedness under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility, (B) to make an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale by a Restricted Subsidiary or in properties and assets that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto will be used in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate business of the Company and the Notes) and Restricted Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof"Replacement Assets"), or (iiiC) making an offer a combination of prepayment and investment permitted by the foregoing clauses (in accordance with iii)(A) and (iii)(B). On the procedures set forth below for 361st day after an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interestor such earlier date, if any, on as the amount Board of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form Directors of the acquisition Company or of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with Subsidiary determines not to apply the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject relating to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged Sale as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (iii)(A), (iii)(B) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3iii)(C) of Section 4.10(bthe next preceding sentence (each a "Net Proceeds Offer Amount") or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with (the proceeds "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 45 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from any Asset Saleall Holders on a PRO RATA basis, to purchase the maximum principal that amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes and Pari Passu Indebtedness to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; PROVIDED, HOWEVER, that if at any time any non-cash consideration received by the terms Company or any Restricted Subsidiary, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.15. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $5 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, not just the amount in excess of $5 million, shall be applied as required pursuant to this paragraph). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and the Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, the successor corporation shall be deemed to have sold the properties and assets of the Company and the Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such Indebtedness)properties and assets of the Company or the Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant. Notwithstanding the two immediately preceding paragraphs, the Company and the Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent (i) at least 80% of the consideration for such Asset Sale constitutes Replacement Assets and (ii) such Asset Sale is for fair market value; PROVIDED that any consideration not constituting Replacement Assets received by the Company or any of the Restricted Subsidiaries in accordance connection with any Asset Sale permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the two preceding paragraphs. Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 30 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) in part in integral multiples of $1,000 in exchange for cash. To the extent that Holders properly tender Notes in an amount exceeding the aggregate amount Net Proceeds Offer Amount, Notes of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale tendering Holders will be purchased on a PRO RATA basis (based on amounts tendered). A Net Proceeds Offer is less than the Excess Proceeds, the Company shall remain open for a period of 20 business days or such longer period as may use any remaining Excess Proceeds for any purpose not prohibited be required by this Indenturelaw. If the aggregate principal amount Net Proceeds Offer is on or after a Record Date and on or before the related Interest Payment Date, any accrued interest shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders who tender Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenderspursuant to the Net Proceeds Offer. The notice, collectively, exceeds which shall govern the amount terms of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Net Proceeds Offer, the amount of Excess Proceeds shall be reset at zero.include such disclosures as are required by law and shall state:
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; andof;
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, from such Asset Sale is in the form of cash or cash, Cash Equivalents; provided, however, Equivalents and/or Replacement Assets (as defined below) (with the amount of consideration attributable to any such Replacement Assets equal to the extent Fair Market Value thereof) and is received at the time of such disposition; provided that the assets sold in such Asset Sale were part for purposes of the Collateralprovision, each of the assets received as non-cash consideration shall not following will be Excluded Assets and are required deemed to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount ofcash:
(A) the amount of any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesNotes or any Guarantee of a Guarantor) that are extinguished in connection with the transactions relating to such Asset Sale, or that are expressly assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant assets and so long as the documents governing such liabilities provide that there is no further recourse to an agreement that releases or indemnifies the Company or any of its Subsidiaries with respect to such Restricted Subsidiary, as the case may be, from further liability therefor;liabilities; and
(B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted (by sale or other disposition) by the Company or such Restricted Subsidiary into cash or Cash EquivalentsEquivalents within 180 days of such Asset Sale, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), received in each case within 180 days following the receipt thereofthat conversion; and
(Ciii) any Designated Noncash Consideration received by the Company shall apply, or any of its cause such Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market ValueSubsidiary to apply, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds relating to such Asset Sale within 180 days of any Asset Salereceipt thereof either:
(A) to (i) permanently reduce the commitments under the Credit Agreement and to the extent that the aggregate amount of revolving loans and letters of credit exceed the amount of the commitments thereunder as so reduced, the Company or a Restricted Subsidiary, at its option, may apply repay such revolving loans and/or cash collateralize such letters of credit in an aggregate amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, excess and/or (ii) purchasing Notes through open market purchases (to permanently prepay the extent such purchases are at term loans or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interestother non-revolving funded debt, if any, on under the amount of Notes that would otherwise be prepaidCredit Agreement;
(4B) to make an investment inin property, purchase plant, equipment or otherwise acquire any one other non-current assets that replace the properties and assets that were the subject of such Asset Sale or more businessesin property, plant, equipment or other non-current assets (other than working capital assets), properties or capital expenditures, in each case that will be used or useful in a Similar Business (or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form all of the acquisition of Capital Stock of an entity that becomes a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Wholly Owned Restricted Subsidiary thereof;
(5and is engaged in) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds business of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with as existing on the provisions described Issue Date or in clause businesses that are the same, similar, ancillary or reasonably related thereto or are reasonable extensions thereof (4“Replacement Assets”); and/or
(C) or a combination of prepayment and investment permitted by the foregoing clauses (5A) of this Section 4.10(band (B).
(b) if and to Pending the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt final application of such Net Cash Proceeds, the Company may temporarily reduce borrowings under the Credit Agreement or a Restricted Subsidiaryinvest such Net Cash Proceeds in Cash Equivalents. On the 181st day after an Asset Sale or such earlier date, if any, as applicablethe Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (A), has entered into (B) and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5C) of this Section 4.10(b4.10(a)(iii) (each, a “Net Proceeds Offer Trigger Date”), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all portion of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary that have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realizedA), as determined (B) and (C) of Section 4.10(a)(iii) (each a “Net Proceeds Offer Amount”) shall be subsequently applied by the Company in its sole discretion, or such Restricted Subsidiary to make an offer pursuant to Section 3.11 to purchase (the portion of such “Net Cash Proceeds so affected will Offer”) on a date (the “Net Proceeds Offer Payment Date”) not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as less than 30 nor more than 45 days following the applicable local law will not permit repatriation to the United States Net Proceeds Offer Trigger Date, from all Holders and all holders of other Applicable Indebtedness (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted than Indebtedness under the applicable local law and is not subject Credit Agreement) containing provisions similar to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods those set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash ProceedsSection 4.10, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under on a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; providedpro rata basis, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu other Applicable Indebtedness to which the Asset Sale Offer applies that may be purchased out of with the Excess Proceeds, Net Proceeds Offer Amount at an offer price a Purchase Price in cash in an amount equal to 100.0100% of the principal amount thereof (or if such Indebtedness was issued with original issue discount, 100% of the Notes and Pari Passu Indebtedness accreted value), plus accrued and unpaid interest (including Additional Interest, if any) to the date of purchase. If at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the amount of cash received (other than such interest) shall constitute Net Cash Proceeds thereof shall be applied in accordance with this Section 4.10 and Section 3.11.
(c) The Company may defer any Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales in which case the accumulation of such amount shall constitute a Net Proceeds Offer Trigger Date (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to clause (b) above).
(d) In the event of the transfer of substantially all (but not includingall) of the date property and assets of purchase (or such lesser price the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.10, and shall comply with the provisions of this Section 4.10 and Section 3.11 with respect to such deemed sale as if it were an Asset Sale. In addition, the Pari Passu Indebtedness, if any, as may be provided by the terms Fair Market Value of such Indebtedness)properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.10 and Section 3.11.
(e) Each notice of a Net Proceeds Offer will be mailed by first class mail to the Holders as shown on the register of Holders within 25 days following the Net Proceeds Offer Trigger Date, in accordance with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of US$1,000 in exchange for cash. To the agreements governing extent Holders properly tender Notes in an amount exceeding the Pari Passu IndebtednessNet Proceeds Offer Amount, the Trustee will select the Notes to be purchased on a pro rata basis. A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as applicablemay be required by law. If any Net Cash Proceeds remain after the consummation of any Net Proceeds Offer, the Company may use those Net Cash Proceeds for any purpose not otherwise prohibited by this Indenture. Upon completion of each Net Proceeds Offer, the amount of Net Cash Proceeds will be reset at zero.
(ef) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the aggregate amount provisions of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsany securities laws or regulations conflict with this Section 4.10 or Section 3.11, the Company may use any remaining Excess Proceeds for any purpose shall comply with the applicable securities laws and regulations and shall not prohibited be deemed to have breached its obligations under this Section 4.10 or Section 3.11 by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerovirtue thereof.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company's Board of Directors);
(2) at least 75.090% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or cash, Cash EquivalentsEquivalents and/or Replacement Assets (as defined below) and is received at the time of such disposition; provided, however, to the extent that the assets sold in such Asset Sale were part amount of the Collateral, the assets any notes or other obligations received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a such Restricted Subsidiary thereof. For from such transferee that are within 30 days converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received) shall be deemed, to the extent of cash so received, to be cash for purposes of this clause (2) the amount of:
(A) provision; provided further that any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the NotesNotes or any Guarantee, and excluding Indebtedness other than Indebtedness under clause (3) that are extinguished in connection with of the transactions relating to such Asset Sale, definition of "Indebtedness" or Purchase Money Indebtedness) that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that and are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are not otherwise thereafter required to be satisfied for cash or Cash Equivalents (to reflected on the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); Company's consolidated balance sheet shall each be deemed to be Cash Equivalents.cash for purposes of this provision;
(b3) Within 365 upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds in excess of $5.0 million for any one Asset Sale (or series of related Asset Sales) relating to such Asset Sale (i) as contemplated by subclause (i) of clause (14) of the definition of "Permitted Indebtedness" or (ii) within 270 days after of receipt thereof to make an investment in properties and assets that replace the Company’s properties and assets that were the subject of such Asset Sale or any in properties and assets (excluding Capital Stock other than Capital Stock of an entity that is (or will immediately become) a Guarantor) that will be used in the business of the Company and its Restricted Subsidiary’s Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto ("Replacement Assets") or to finance, directly or indirectly, a Permitted Business Acquisition or enter into a definitive agreement to effectuate such acquisition, subject only to customary conditions, including FCC approval, within 90 days of receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale and consummate such acquisition within 360 days of receipt thereof; provided that (A) the primary purpose of such acquisition of Replacement Assets or Permitted Business Acquisition is to acquire, and there is acquired, a television station with a Big-4 (ABC, CBS, NBC or Fox) network affiliation agreement in place or the creation (through ownership by the Company and its Restricted Subsidiaries) of a "duopoly" in a market and (B) that the Company shall use all reasonable best efforts to promptly dispose of any portion thereof) as follows:
(1) if other assets acquired in such acquisition or Permitted Business Acquisition; provided further that to the extent such Net Cash Proceeds are were received from an Asset Sale of assets or property that is not a disposition of constituted Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise Replacement Assets so acquired shall be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt owned by the Company or a Restricted Subsidiary thereof;
(5) to make an investment inGuarantor, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets subject to any Liens other than Permitted Collateral Liens and are required to be pledged as Collateral pursuant the Company shall execute and deliver to the Trustee such Security Documents or other instruments as shall be reasonably promptly after receipt by necessary to cause such property or assets to become Collateral subject to the Company or a Restricted Subsidiary thereof; or
(6) any combination Lien of the foregoing, provided, that applicable Security Documents (subject to the Company and its Restricted Subsidiaries will be deemed to have complied with the release provisions described contained in clause Article X); and
(4) if such Asset Sale consists, in whole or (5) in part, of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or sale of any Capital Stock of any Restricted Subsidiary’s receipt , Capital Stock of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise shall be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) sold or otherwise invest disposed of in the same transaction or utilize series of related transactions such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that such Person is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicableno longer a Subsidiary.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) The Prior to the occurrence of the Fall-Away Event, the Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiaries, as the case may be, such Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale, (as determined at the time of contractually agreeing ii) immediately before and immediately after giving effect to such Asset Sale) , no Default or Event of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
Default shall have occurred and be continuing and (2iii) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary therefor is in the form of cash paid at the closing thereof, provided, however, that this clause (iii) shall not apply if, after giving effect to such Asset Sale, the aggregate principal amount of all notes or similar debt obligations and Fair Market Value of all equity securities received by the Company from all Asset Sales since September 25, 2000 (other than such notes or similar debt obligations and such equity securities converted into or otherwise disposed of for cash and applied in accordance with the second succeeding sentence) would not exceed 2.5% of Consolidated Tangible Assets at such time. The amount (without duplication) of any (x) Indebtedness (other than Subordinated Indebtedness) of the Company or such Subsidiary that is expressly assumed by the transferee in such Asset Sale and with respect to which the Company or such Subsidiary, as the case may be, is in unconditionally released by the form holder of such Indebtedness and (y) any notes, securities or similar obligations or items of property received from such transferee that are immediately converted, sold or exchanged by the Company or such Subsidiary for cash or Cash Equivalents; provided, however, (to the extent that the assets sold in such Asset Sale were part of the Collateralcash actually so received), the assets received as shall be deemed to be cash for purposes of this Section 4.12. If at any time any non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt received by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then the date of such conversion or disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net Proceeds thereof shall be applied in accordance with this Section 4.12. A transfer of assets by the Company to a Wholly Owned Subsidiary or by a Wholly Owned Subsidiary to the Company or to another Wholly Owned Subsidiary will not be deemed to be an Asset Sale, and a transfer of assets that constitutes a Restricted Payment and that is permitted under Section 4.10 hereof will not be deemed to be an Asset Sale.
(Bb) any securitiesPrior to the occurrence of the Fall-Away Event, notes or other obligations or other assets or property received by if the Company or any Restricted Subsidiary from such transferee that are converted by engages in an Asset Sale, the Company or such Restricted Subsidiary into cash shall, no later than 360 days after such Asset Sale, (i) apply all or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent any of the cash Net Proceeds therefrom to repay Indebtedness that ranks pari passu with the Notes and is secured by the assets disposed of in the Asset Sale or Cash Equivalents received)to repay Bank Debt in accordance with the applicable provisions thereof, (ii) invest all or any part of the Net Proceeds therefrom in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by lines of business of the Company or any of its Restricted Subsidiaries in immediately prior to such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause investment or (Ciii) that is at that time outstanding, not to exceed 2.0% any combination of Total Assets, calculated at the time of the receipt clauses (i) and (ii) above. The amount of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes Net Proceeds not applied or invested as provided in value); shall each be deemed to be Cash Equivalents.
this paragraph (b) Within 365 days after will constitute “Excess Proceeds.”
(c) Prior to the Company’s or any Restricted Subsidiary’s receipt occurrence of the Net Cash Fall-Away Event, when the aggregate amount of Excess Proceeds of any Asset Saleequals or exceeds $5,000,000, the Company or a Restricted Subsidiaryshall be required to make an offer to purchase (an “Asset Sale Offer”) from all Holders, at its option, may apply an aggregate principal amount of Notes equal to the Net Cash amount of such Excess Proceeds from such Asset Sale (or any portion thereof) as follows:
(1i) if such Net Cash Proceeds are from The Company shall make an Asset Sale that is not a disposition of Collateral, Offer to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (all Holders in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, 4.12 to purchase the maximum principal amount (expressed as a multiple of $1,000) of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the amount (the “Asset Sale Payment Amount”) of such Excess Proceeds, at an .
(ii) The offer price for the Notes shall be payable in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness tendered pursuant to such Asset Sale Offer, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessand Additional Interest, if any, as may be provided by to the terms of date such IndebtednessAsset Sale Offer is consummated (the “Asset Sale Purchase Price”), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) Section 4.12. To the extent that the aggregate amount Asset Sale Purchase Price of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Asset Sale Payment Amount relating thereto (such shortfall constituting a “Net Proceeds Deficiency”), the Company may use such Net Proceeds Deficiency, or a portion thereof, for general corporate purposes.
(iii) If the aggregate Asset Sale Purchase Price of Notes validly tendered and not withdrawn by holders thereof exceeds the Asset Sale Payment Amount, Notes to be purchased shall be selected on a pro rata basis.
(iv) Upon completion of such Asset Sale Offer in accordance with the foregoing provisions, the amount of Excess Proceeds with respect to which such Asset Sale Offer was made shall be deemed to be zero. In the event that any other Indebtedness of the Company which ranks pari passu with the Notes (“Other Debt”) requires an offer to purchase to be made to repurchase such Other Debt upon the consummation of an Asset Sale, the Company may apply the Excess Proceeds to both purchase such Other Debt and to make an Asset Sale Offer, provided, that the purchase price of such Other Debt does not exceed 100% of the aggregate principal amount or accreted value thereof plus interest thereon. With respect to any Excess Proceeds, the Company may use shall make the Asset Sale Offer in respect thereof at the same time as the analogous offer to purchase is made pursuant to any remaining Other Debt and the purchase date in respect thereof shall be the same as the purchase date in respect thereof pursuant to any Other Debt. With respect to any Asset Sale Offer effected pursuant to this Section 4.12, to the extent the aggregate principal amount of Notes and Other Debt, if any, tendered pursuant to such Asset Sale Offer and the concurrent offer to purchase with respect to such Other Debt exceeds the Excess Proceeds, such Notes and Other Debt, if any, shall be purchased pro rata based on the aggregate principal amount of such Notes and such Other Debt tendered by each holder thereof.
(d) If the Company is required to make an Asset Sale Offer, the Company shall, within 30 days following the date specified in clause (c) above, notify the Trustee thereof and give written notice of such Asset Sale Offer to each Holder by first-class mail, postage prepaid, at the address of such Holder appearing in the register maintained by the Registrar, stating:
(1) that an Asset Sale Offer is being made pursuant to this Section 4.12;
(2) that such Holders have the right to require the Company to apply the Excess Proceeds to repurchase the Notes at a purchase price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the purchase date which shall be no earlier than 30 days and not later than 60 days from the date such notice is mailed (the “Excess Proceeds Payment Date”);
(3) that any Note not tendered or accepted for payment will continue to accrue interest;
(4) that any purpose Notes accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Excess Proceeds Payment Date;
(5) that Holders accepting the offer to have their Notes purchased pursuant to the Asset Sale Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day preceding the Excess Proceeds Payment Date;
(6) that Holders will be entitled to withdraw their acceptance of the Asset Sale Offer if the Paying Agent receives, not prohibited by this Indenture. If later than the close of business on the third Business Day preceding the Excess Proceeds Payment Date, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes delivered for purchase and a statement that such Holder is withdrawing his or her election to have such Notes purchased;
(7) that if the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection the Company shall select the Notes to be purchased on a pro rata basis so that the aggregate amount of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, so purchased equals the amount of Excess Proceeds (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000 or integral multiples thereof shall be reset at zero.purchased);
(8) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; provided that each Note purchased and each such new Note issued shall be in an original principal amount of $1,000 or an integral multiple thereof;
(9) the calculations used in determining the amount of Excess Proceeds to be applied to the purchase of such Notes;
(10) any other procedures that a Holder must follow to accept an Asset Sale Offer or effect withdrawal of such acceptance; and
(11) the name and address of the Paying Agent. On the Excess Proceeds Payment Date, the Company shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the extent necessary, Notes or portions thereof tendered pursuant to the Asset Sale Offer, (2) deposit with the Paying Agent US legal tender sufficient to pay the purchase price plus accrued and unpaid interest, if any, on the Notes to be purchased or portions thereof, (3) deliver or cause to be delivered to the Trustee Notes so accepted together with an Officers’ Certificate stating that such Notes or portions thereof were
Appears in 1 contract
Samples: Indenture (Healthsouth Corp)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2as determined in good faith by the Company's Board of Directors), (ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Aa) any liabilities (as -------- shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
and (Bb) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 180 days after such Asset Sale (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
cash for the purposes of this provision; and (biii) Within 365 days after upon the Company’s or any Restricted Subsidiary’s receipt consummation of the Net Cash Proceeds of any an Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale within 360 days of receipt thereof either (or A) to prepay any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock Senior Debt or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of CollateralSenior Debt and, in the case of an Asset Sale by any Senior Debt or Guarantor Senior Debt under any revolving credit facility, effect a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto permanent reduction in the case of availability under such revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01credit facility, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4B) to make an investment in, purchase or otherwise acquire any one or more businesses, Investment in properties and assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, properties and assets and/or properties that are were the subject to of such Asset Sale; provided, Sale or in properties and assets that will be used in the assets acquired with the Net Cash Proceeds business of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with as existing on the provisions described Issue Date or in clause businesses the same, similar or reasonably related thereto (4) "Replacement ----------- Assets"), or (5C) a combination of this Section 4.10(bprepayment and investment permitted by the ------ foregoing clauses (iii)(A) and (iii)(B). On the 361st day after an Asset Sale or such earlier date, if and to any, as the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt Board of such Net Cash Proceeds, Directors of the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, Restricted Subsidiary determines not to the extent that repatriation to the United States of any or all of apply the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply relating to such amounts so long, but only so long, Asset Sale as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any ------------------------------- aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (iii)(A), (iii)(B) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3iii)(C) of Section 4.10(bthe next preceding sentence (each a "Net Proceeds Offer Amount") or pursuant to an Asset Sale Offer made at any time after the Asset Sale ------------------------- shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with (the proceeds "Net Proceeds Offer") on a date (the "Net Proceeds Offer ------------------ ------------------ Payment Date") not less than 30 nor more than 45 days following the applicable ------------ Net Proceeds Offer Trigger Date, from any Asset Saleall Holders on a pro rata basis, to purchase the maximum principal that -------- amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount Securities equal to 100.0the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes and Pari Passu Indebtedness Securities to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, to the date of purchase; provided, however, -------- ------- that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this covenant. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $5.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $5.0 million, shall be applied as required pursuant to this paragraph). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted by Section 5.01, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant. Notice of each Net Proceeds Offer pursuant to this Section 4.16 shall be mailed or caused to be mailed, by first class mail, by the Company within 25 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be provided required by law. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the terms of such Indebtedness), in accordance with Net Proceeds Offer and shall state the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.following terms:
(e1) To that the extent Net Proceeds Offer is being made pursuant to this Section 4.16 and that all Securities tendered will be accepted for payment; provided, however, that if the principal amount of Securities tendered in -------- ------- the Net Proceeds Offer exceeds the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Net Proceeds Offer is less than the Excess ProceedsAmount, the Company shall select the Securities to be purchased on a pro rata basis;
(2) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 45 days from the date such notice is mailed, other than as may use be required by applicable law);
(3) that any remaining Excess Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds for any purpose Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not prohibited by this Indenture. If later than the aggregate second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes Security the Holder delivered for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of and a statement that such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.Holder is withdrawing his election to have such Security purchased; and
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company’s Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
such Asset Sale shall be in the form of cash or Cash Equivalents and shall be received at the time of such disposition; provided that, for purposes of this clause (B2) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case ) within 180 30 days following the after receipt thereofwill be considered “cash” or “Cash Equivalents”; and
(C3) any Designated Noncash Consideration received by upon the Company or any consummation of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale (or any portion thereof) as followswithin 365 days of receipt thereof either:
(1a) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly permanently reduce commitments with respect thereto in Indebtedness under the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of CollateralCredit Agreement and, in the case of an Asset Sale by any such Indebtedness under any revolving credit facility, effect a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto permanent reduction in the case of availability under such revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiarycredit facility;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4b) to make an investment in, purchase or otherwise acquire any one or more businesses, in properties and assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, properties and assets and/or properties that are were the subject to of such Asset Sale; provided, Sale or in properties and assets (including Capital Stock) that will be used in the assets acquired with the Net Cash Proceeds business of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with as existing on the provisions described Issue Date or in clause businesses reasonably related thereto (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b“Replacement Assets”), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.; or
(c) Notwithstanding a combination of prepayment and investment permitted by the foregoingforegoing clauses (3)(a) and (3)(b).
(b) On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to the extent that repatriation to the United States of any or all of apply the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply relating to such amounts so long, but only so long, Asset Sale as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until clauses (3)(a), (3)(b) and (3)(c) of Section 4.10(a) (each, a “Net Proceeds Offer Trigger Date”), such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (3)(a), (3)(b) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (33)(c) of Section 4.10(b4.10(a) or pursuant to an Asset Sale the last proviso of this paragraph (each, a “Net Proceeds Offer made at any time after the Asset Sale Amount”) shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required or such Restricted Subsidiary to make an offer to purchase (the “Asset Sale Net Proceeds Offer”) to all Holders of Notes and, to the extent required by the terms of other any Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with Indebtedness, on a date (the proceeds “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders (and holders of such Pari Passu Indebtedness) (and holders of any Asset Salesuch Pari Passu Indebtedness) on a pro rata basis, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of with the Excess Proceeds, Net Proceeds Offer Amount at an offer a price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; provided, however, that if at any time any non-cash consideration received by the terms Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.10. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to this Section 4.10(b)). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.10 and shall comply with the provisions of this Section 4.10 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such Indebtednessproperties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.10.
(c) Notwithstanding Sections 4.10(a) and (b), the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such Sections to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Replacement Assets; and
(2) such Asset Sale is for fair market value; provided that any consideration not constituting Replacement Assets received by the Company or any of its Restricted Subsidiaries in accordance connection with any Asset Sale permitted to be consummated under this Section 4.10(c) shall constitute Net Cash Proceeds subject to the provisions of Sections 4.10(a) and (b). The provisions of this Section 4.10 shall not apply to transactions undertaken pursuant to an Inversion Transaction; provided that (i) the Supplemental Indenture is executed and in effect concurrently with the consummation of such Inversion Transaction; (ii) immediately following such Inversion Transaction, the Company shall apply to S&P and Xxxxx’x to have its debt rating and outlook updated and such updated debt rating and outlook shall be no less favorable to the Company than immediately prior to such Inversion Transaction; (iii) immediately following such Inversion Transaction, the Company’s Consolidated Fixed Charge Coverage Ratio is at least equal to the Consolidated Fixed Charge Coverage Ratio immediately prior to such Inversion Transaction; and (iv) immediately following such Inversion Transaction, the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.03. Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 25 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture Indenture. The notice to the Holders shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer. Such notice shall state:
(1) that the Net Proceeds Offer is being made pursuant to this Section 4.10 and that (subject to the provisions hereof) all Notes tendered will be accepted for payment;
(2) the purchase price (including the amount of accrued interest) and the purchase date (which shall be the Net Proceeds Offer Payment Date);
(3) that any Note not tendered will continue to accrue interest if interest is then accruing;
(4) that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a Net Proceeds Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third business day prior to the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the second Business Day preceding the Net Proceeds Offer Date, a facsimile transmission or letter setting forth the agreements governing name of the Holder, the principal amount of the Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and
(7) the circumstances and relevant facts regarding such Net Proceeds Offer. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1000 in exchange for cash. To the extent Holders properly tender Notes and holders of Pari Passu IndebtednessIndebtedness properly tender such Pari Passu Indebtedness in an amount exceeding the Net Proceeds Offer Amount, the tendered Notes and Pari Passu Indebredness will be purchased on a pro rata basis (based on amounts tendered) in an aggregate amount equal to the Net Proceeds Offer Amount (if any). A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as applicable.
(e) may be required by law. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the aggregate amount provisions of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders securities laws or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance regulations conflict with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.this
Appears in 1 contract
Samples: Indenture (Manitowoc Co Inc)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, consummate any Asset Sale Sale, unless:
(1) the consideration received by the Company or any of its the Restricted Subsidiaries, as the case may be, receives consideration Subsidiary is at least equal to the Fair Market Value (as determined at on the time of contractually agreeing to date a definitive agreement for such Asset SaleSale was entered into) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; andof;
(2) except in the case of a Permitted Asset Swap, at least 75.075% of the consideration from such Asset Sale received by consists of cash, Cash Equivalents or the Company or such Restricted Subsidiary, as the case may be, is in the form assumption of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent consolidated balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orfootnotes thereto, or if incurred incurred, accrued or accrued increased subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s consolidated balance sheet or in the notes footnotes thereto if such incurrence incurrence, accrual or accrual increase had taken place on or prior to the date of such balance sheet sheet, as determined in the good faith determination of by the Company) of the Company or any Restricted Subsidiary (Subsidiary, other than liabilities that are unsecured or by their terms or as to Lien priority subordinated to the Notes) Notes Obligations, that are assumed by the transferee of any such assets or Equity Interests (or are otherwise extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, ) pursuant to an a written agreement that releases or indemnifies the Company or such Restricted SubsidiarySubsidiary from such liabilities; provided, as however, that this clause shall not apply to the case may belease, from sharing, assignment or other use of facilities, rights of way or other access rights or the assignment of transmission or network capacity; and provided further liability therefor;
(B) that the amount of any securities, notes or other obligations Obligations or other securities or assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case ) within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); thereof shall each be deemed to be Cash EquivalentsEquivalents for the purposes of this clause (2); and
(3) in the case of an Asset Sale of Collateral, all consideration from such Asset Sale that is not in the form of cash or Cash Equivalents is pledged as Collateral to secure the Notes Obligations pursuant to a Priority Lien concurrently with or immediately after the receipt thereof.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds from an Asset Sale of any Asset SaleCash Flow Priority Collateral, the Company or a any Restricted Subsidiary, at its option, Subsidiary may apply an amount equal to the amount of such Net Cash Proceeds from such Asset Sale (or any portion thereof) as followsto:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire permanently repay (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (xA) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Priority Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations notes (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes byincluding, at its option (i) redeeming Notes as provided under Section 3.01the Company’s option, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) by making an offer (in accordance with the procedures set forth below for an Asset Sale OfferOffer to Purchase) to all Holders to purchase their Notes notes at 100.0100% of the principal amount thereof, plus the amount of accrued but unpaid interest, ) or (B) any other Priority Lien Obligations (including by way of prepayments that may be declined) (and to correspondingly reduce commitments with respect thereto); provided that if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (such Priority Lien Obligations other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired notes are reduced with the Net Cash Proceeds of any Asset Sale, the Company shall offer to equally and ratably reduce Obligations under the notes as provided in Section 3.07 hereof, through open-market purchases (to the extent such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Offer to Purchase) to all Holders to purchase their notes at 100% of the principal amount thereof, plus accrued but unpaid interest; or
(2) invest in property or assets (other than current assets) of a disposition nature or type or that are used in a business (or in a company having property and assets of a nature or type, or engaged in a business) similar or related to the nature or type of the property and assets of, or the business of, the Company and the Restricted Subsidiaries existing on the date of such investment (as determined in good faith by the Board of Directors, whose determination shall not be Excluded Assets conclusive and are required evidenced by a board resolution); provided that with respect to property or assets acquired pursuant to this Section 4.10(b)(2), (A) the purchase of such property or assets is consummated no later than (i) the 365th day after such Asset Sale or (ii) so long as a binding agreement with respect to the purchase of such property or assets is entered into within 365 days after the Asset Sale, 180 days after the date of such binding agreement and (B) such property or assets shall be pledged as Collateral pursuant subject to a Priority Lien securing the Security Documents reasonably promptly Priority Lien Obligations.
(c) Within 365 days after the receipt by of any Net Cash Proceeds from an Asset Sale of any assets other than Collateral, the Company or a any Restricted Subsidiary thereof;may apply an amount equal to the amount of such Net Cash Proceeds to:
(51) permanently repay (A) Indebtedness of a Subsidiary of the Company that is not a Subsidiary Guarantor or (B) Pari Passu Debt, in each case owing to make an investment ina Person other than the Company or any Restricted Subsidiary; provided, purchase however, that if the obligation repaid pursuant to Section 4.10(c)(1)(A) or otherwise acquire any one (B) is revolving credit Indebtedness, the Company or more businessessuch Restricted Subsidiary, as applicable, must correspondingly reduce loan commitments with respect thereto; or
(2) invest in property or assets (other than working capital current assets) of a nature or properties that replace the businesses, assets and/or properties type or that are used in a business (or in a company having property and assets of a nature or type, or engaged in a business) similar or related to the nature or type of the property and assets of, or the business of, the Company and the Restricted Subsidiaries existing on the date of such investment (as determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a board resolution); provided that with respect to property or assets acquired pursuant to this Section 4.10(c)(2), (A) the purchase of such property or assets is consummated no later than (i) the 365th day after such Asset Sale or (ii) so long as a binding agreement with respect to the purchase of such property or assets is entered into within 365 days after the Asset Sale, 180 days after the date of such binding agreement and (B) such property or assets shall be pledged as Collateral subject to a Priority Lien securing the Priority Lien Obligations.
(d) To the extent applicable, within 365 days after the receipt of any Net Cash Proceeds from an Asset Sale of any ABL Priority Collateral, the Company or any Restricted Subsidiary may apply an amount equal to the amount of such Asset SaleNet Cash Proceeds to:
(1) first, permanently repay ABL Obligations Incurred pursuant to Section 4.09(b)(13); providedand
(2) second,
(A) permanently repay (x) Priority Lien Obligations under the notes (including, at the Company’s option, by making an offer (in accordance with the procedures set forth below for an Offer to Purchase) to all Holders to purchase their notes at 100% of the principal amount thereof, plus accrued but unpaid interest) or (y) any other Priority Lien Obligations (including by way of prepayments that may be declined) (and to correspondingly reduce commitments with respect thereto); provided that if any such Priority Lien Obligations other than the assets acquired notes are reduced with the Net Cash Proceeds of a disposition any Asset Sale, the Company shall not be Excluded Assets offer to equally and are required to be pledged ratably reduce the notes as Collateral pursuant provided under Section 3.07 hereof, through open-market purchases (to the Security Documents reasonably promptly after receipt extent such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with the Company or a Restricted Subsidiary procedures set forth below for an Offer to Purchase) to all Holders to purchase their notes at 100% of the principal amount thereof, plus accrued but unpaid interest; or
(6B) any combination invest in property or assets (other than current assets) of a nature or type or that are used in a business (or in a company having property and assets of a nature or type, or engaged in a business) similar or related to the nature or type of the foregoingproperty and assets of, providedor the business of, that the Company and its the Restricted Subsidiaries will existing on the date of such investment (as determined in good faith by the Board of Directors, whose determination shall be deemed conclusive and evidenced by a board resolution); provided that with respect to have complied with property or assets acquired pursuant to this Section 4.10(d)(2)(B), (x) the provisions described in clause purchase of such property or assets is consummated no later than (4i) the 365th day after such Asset Sale or (5ii) of this Section 4.10(b) if and so long as a binding agreement with respect to the extent that, purchase of such property or assets is entered into within 365 days after the Company’s or any Restricted Subsidiary’s receipt Asset Sale, 180 days after the date of such binding agreement and (y) such property or assets shall be pledged as Collateral subject to a Priority Lien securing the Priority Lien Obligations. Pending the final application of any Net Cash Proceeds, the Company or a any Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) credit borrowings or otherwise invest or utilize such the Net Cash Proceeds in any manner that is not prohibited by this Indenture. Any The amount of such excess Net Cash Proceeds from any Asset Sale that is not required to be applied (or invested as provided and within to be committed to be applied) during the applicable time period set forth in Section 4.10(b), (c) will be deemed to and (d) and not applied as so required by the end of such period shall constitute “Excess Proceeds”; provided.” If, that as of the first day of any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When calendar month, the aggregate amount of Excess Proceeds exceeds not theretofore subject to an Offer to Purchase pursuant to this Section 4.10 totals at least $50.0 10.0 million, the Company will be required must commence, not later than the fifteenth business day of such month, and consummate an Offer to make Purchase from the Holders on a pro rata basis an offer (“Asset Sale Offer”) to all Holders aggregate principal amount of Notes notes and, to the extent permitted or required by the terms of thereof, any other Pari Passu IndebtednessDebt, equal to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess ProceedsProceeds on such date, at an offer a purchase price in cash in an amount equal to 100.0100% of the principal amount of the Notes notes and such other Pari Passu Indebtedness plus Debt, if applicable, on the relevant Payment Date, plus, in each case, accrued and unpaid interest (if any) to (but not including) the date Payment Date. If any Excess Proceeds remain after consummation of purchase (or such lesser price with respect an Offer to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess ProceedsPurchase, the Company may use any remaining those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof notes and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, Debt tendered in response to such Offer to Purchase exceeds the amount of Excess Proceeds, selection of Notes for purchase the Trustee will select the notes and such other Pari Passu Debt to be made by purchased on a pro rata basis, subject to DTC procedures if the Company in accordance with Section 3.04(f)notes are Global Notes. Upon completion of such Asset Sale Offerthe Offer to Purchase, the amount of Excess Proceeds shall will be reset to zero. The provisions under this Indenture relating to the Company’s obligation to make an offer to purchase the notes as a result of an Asset Sale, including the definition of “Asset Sale,” may be waived or modified at zeroany time (including after Net Cash Proceeds have been received) with the written consent of the Holders of a majority in principal amount of the notes then outstanding.
(e) The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of Section 3.09 hereof or this Section 4.10, the Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.09 hereof or this Section 4.10 by virtue of such compliance.
Appears in 1 contract
Samples: Indenture (Gogo Inc.)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, consummate any Asset Sale unless:
(1) the Company or any of its such Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or and property sold or otherwise disposed of pursuant subject to such Asset Sale; and
(2) at least 75.0% all of the consideration from such Asset Sale received by paid to the Company or such Restricted Subsidiary, as the case may be, Subsidiary in connection with such Asset Sale is in the form of cash or cash, Cash Equivalents; provided, howeverLiquid Securities, to Exchanged Properties or the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt assumption by the Company or a Restricted Subsidiary thereof. For purposes purchaser of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities of the Company that are by their terms subordinated to the Notes) or liabilities of any Subsidiary Guarantor that made such Asset Sale (other than liabilities of a Subsidiary Guarantor that are extinguished in connection with the transactions relating by their terms subordinated to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital StockSubsidiary Guarantor’s Subsidiary Guarantee), in each casecase as a result of which the Company and its remaining Restricted Subsidiaries are no longer liable for such liabilities (the “Permitted Consideration”); provided that the Company and its Restricted Subsidiaries shall be permitted to receive assets and property other than Permitted Consideration, pursuant to an agreement that releases so long as the aggregate Fair Market Value of all such assets and property other than Permitted Consideration received from Asset Sales since the Issue Date and held by the Company or indemnifies any Restricted Subsidiary at any one time shall not exceed 10% of Adjusted Consolidated Net Tangible Assets.
(b) The Net Available Cash from Asset Sales by the Company or a Restricted Subsidiary may be applied by the Company or such Restricted Subsidiary, as to the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by extent the Company or such Restricted Subsidiary into cash elects (or Cash Equivalents, or by their terms are is required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds terms of any Asset Sale, Senior Indebtedness of the Company or a Restricted Subsidiary), at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:to
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition purchase, repay or prepay Pari Passu Obligations or other Indebtedness of Collateralthe Company or any Subsidiary Guarantor secured by Permitted Collateral Liens (and, to repaythe extent required pursuant to the terms of the Revolving Credit Agreement (as in effect on the Issue Date) in the case of revolving obligations, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Companythereto);; or
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, reinvest in the case Additional Assets (including by means of an Asset Sale Investment in Additional Assets by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Available Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt received by the Company or a another Restricted Subsidiary thereof;
(5) to make an investment inSubsidiary); provided that if such Asset Sale includes Oil and Gas Properties, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject after giving effect to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition is in compliance with the provision described in clause (4) or (5) Collateral requirements of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day periodIndenture.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Any Net Available Cash Proceeds of any from an Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would Sale not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance accordance with this covenant; provided that clause (xb) of this paragraph shall apply to such amounts so long, but only so long, as Section 4.10 within 365 days from the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any date of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to shall constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. .” When the aggregate amount of Excess Proceeds exceeds $50.0 million10,000,000, the Company will be required to make an offer (the “Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to in accordance with Section 3.08 and all holders of other Pari Passu Indebtedness outstanding that is pari passu with the Notes containing provisions similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer those set forth in this Indenture with respect to offers to purchase such Pari Passu Indebtedness or redeem with the proceeds from any Asset Sale, of sales of assets to purchase the maximum principal amount of Notes and any such Pari Passu other pari passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds; provided to the extent such Excess Proceeds were received in respect of the sale or transfer of assets that constituted Collateral, at an Asset Sale Offer will be made solely to the holders of Pari Passu Obligations. The offer price in cash in an amount any Asset Sale Offer will be equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessinterest, if any, as may be provided by to the terms Purchase Date (subject to the right of such IndebtednessHolders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the Purchase Date), and will be payable in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenturecash. If the aggregate principal amount of Notes surrendered tendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of available Excess ProceedsProceeds allocated for repurchases of Notes pursuant to the Asset Sale Offer, selection then such Excess Proceeds will be allocated pro rata according to the principal amount of the Notes tendered and the Trustee will select the Notes to be purchased in accordance with this Indenture. To the extent that any portion of the amount of Excess Proceeds remains after compliance with the second sentence of this clause (c) and provided that all Holders of Notes have been given the opportunity to tender their Notes for purchase as described in Section 4.10(d), the Company and its Restricted Subsidiaries may use such remaining amount for purposes permitted by this Indenture and the amount of Excess Proceeds will be made by reset to zero.
(d) The Company will comply, to the Company extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or regulations thereunder to the extent such laws and regulations are applicable in accordance connection with Section 3.04(f)the purchase of Notes pursuant to an Asset Sale Offer. Upon completion To the extent that the provisions of such any securities laws or regulations conflict with the provisions relating to the Asset Sale Offer, the amount Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.10 by virtue of Excess Proceeds shall be reset at zerosuch compliance.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2as determined in good faith by the Company's Board of Directors), (ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash Equivalents; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Aa) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(Bb) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are immediately converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
) and (Cc) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Valuefair market value, taken together with all other Designated Noncash Consideration received pursuant to this subclause clause (Cc) that is at that time outstandingoutstanding (including any Designated Noncash Consideration applied pursuant to the third paragraph of this covenant), not to exceed 2.010% of Total Assets, calculated Assets at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value); , shall each be deemed to be Cash Equivalents.
(b) Within 365 days after cash for the Company’s purposes of this provision or any Restricted Subsidiary’s receipt for purposes of the Net Cash Proceeds third paragraph of any this covenant, and (iii) upon the consummation of an Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale within 365 days of receipt thereof either (or A) to prepay any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of CollateralSenior Debt and, in the case of an Asset Sale by any Senior Debt under any revolving credit facility, effect a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto permanent reduction in the case of availability under such revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
credit facility, (3B) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and repurchase Existing Notes required to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments be repurchased under the Revolving Facilityindenture governing the Existing Notes, (C) to reinvest in Productive Assets, or (D) a combination of prepayment, repurchase and investment permitted by the foregoing clauses (iii)(A), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notesiii)(B) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereofiii)(C), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its or such Restricted Subsidiaries Subsidiary may temporarily reduce Indebtedness (including under a revolving Debt Facility) credit facility, if any, or otherwise invest or utilize such Net Cash Proceeds in any manner Cash Equivalents. On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not prohibited by this Indenture. Any to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B), (iii)(C) or (iii)(D) of the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (iii)(A), (iii)(B), (iii)(C) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3iii)(D) of Section 4.10(bthe next preceding sentence (each a "Net Proceeds Offer Amount") or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with (the proceeds "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from any Asset Sale, to purchase the maximum principal all Holders on a pro rata basis that amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0the Net Proceeds --- ---- Offer Amount at a price equal to 100% of the principal amount of the Notes and Pari Passu Indebtedness to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, to the date of purchase; provided, however, that if at any -------- ------- time any non-cash consideration (including any Designated Noncash Consideration) received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this covenant. Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $10.0 million, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be provided deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by the terms Company and its Restricted Subsidiaries aggregates at least $10.0 million, at which time the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of all such Indebtednessdeferred Net Proceeds Offer Amounts is equal to $10.0 million or more shall be deemed to be a "Net Proceeds Offer Trigger Date"). Notwithstanding the two immediately preceding paragraphs, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent (i) at least 75% of the consideration for such Asset Sale constitutes Productive Assets, cash, cash equivalents and/or marketable securities (i.e., such securities which could ---- be sold for cash within 180 days of the acquisition thereof) and (ii) such Asset Sale is for fair market value (as determined in accordance good faith by the Company's Board of Directors); provided that any consideration not constituting -------- Productive Assets received by the Company or any of its Restricted Subsidiaries in connection with any Asset Sale permitted to be consummated under this paragraph shall be subject to the provisions of the two preceding paragraphs. Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 25 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture the Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 in exchange for cash. To the agreements governing extent Holders properly tender Notes in an amount exceeding the Pari Passu IndebtednessNet Proceeds Offer Amount, Notes of tendering Holders will be purchased on a pro rata basis (based on amounts tendered). A --- ---- Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as applicable.
(e) may be required by law. To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess Net Proceeds Offer Amount for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f)general corporate purposes. Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the "Asset Sale" provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the "Asset Sale" provisions of this Indenture by virtue thereof.
(b) Subject to the deferral of the Net Proceeds Offer Trigger Date contained in the second paragraph of subsection (a) above, each notice of a Net Proceeds Offer pursuant to this Section 4.16 shall be mailed or caused to be mailed, by first class mail, by the Company not more than 25 days after the Net Proceeds Offer Trigger Date to all Holders at their last registered addresses as of a date within 15 days of the mailing of such notice, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section 4.16 and that all Notes tendered will be accepted for payment; provided, however, that if the aggregate --------- ------- principal amount of Notes tendered in a Net Proceeds Offer plus accrued interest at the expiration of such offer exceeds the aggregate amount of the Net Proceeds Offer, the Company shall select the Notes to be purchased on a pro rata basis (with such --- ---- adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000 or multiples thereof shall be purchased);
(2) the purchase price (including the amount of accrued interest) and the purchase date (which shall be 20 Business Days from the date of mailing of notice of such Net Proceeds Offer, or such longer period as required by law) (the "Proceeds Purchase Date"); provided that the Proceeds Purchase -------- Date for the Notes shall be a date subsequent to any payment dates for the purchase or other repayment of Senior Debt having similar provisions;
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Proceeds Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to a Net Proceeds Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Proceeds Purchase Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than five Business Days prior to the Proceeds Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and
(7) that Holders whose Notes are purchased only in part will be issued new Notes in a principal amount equal to the unpurchased portion of the Notes surrendered; provided that -------- each Note purchased and each new Note issued shall be in an original principal amount of $1,000 or integral multiples thereof; On or before the Proceeds Purchase Date, the Company shall (i) accept for payment Notes or portions thereof tendered pursuant to the Net Proceeds Offer which are to be purchased in accordance with item (b)(1) above, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price plus accrued interest, if any, of all Notes to be purchased and (iii) deliver to the Trustee Notes so accepted together with an Officers' Certificate stating the Notes or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price plus accrued interest, if any. For purposes of this Section 4.16, the Trustee shall act as the Paying Agent. Any amounts remaining after the purchase of Notes pursuant to a Net Proceeds Offer shall be returned by the Trustee to the Company. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of Notes pursuant to a Net Proceeds Offer. To the extent the provisions of any securities laws or regulations conflict with the provisions of this Indenture relating to a Net Proceeds Offer, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations relating to such Net Proceeds Offer by virtue thereof.
Appears in 1 contract
Samples: Indenture (Dade International Inc)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any Asset Sale unless:
(1) the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) except in the case of a Permitted Asset Swap, at least 75.0% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash EquivalentsEquivalents or Replacement Assets; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0the greater of (x) $100.0 million and (y) 5.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash EquivalentsEquivalents for the purposes of this clause (2). Notwithstanding the foregoing, the 75.0% limitation referred to in clause (2) of this Section 4.10(a) shall be deemed satisfied with respect to any Asset Sale in which the cash, Cash Equivalents and Replacement Assets portion of the consideration received therefrom, determined in accordance with the foregoing provision on an after-tax basis, if the proceeds before tax would have complied with the aforementioned 75.0% limitation.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness or other Obligations under the Senior Credit Facility or the Ex-Im Credit Facility, (y) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (yz) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings borrowings) any other Indebtedness of the Company (other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility any Disqualified Stock or Subordinated Obligations) or Indebtedness of a Restricted Subsidiary (without reducing commitmentsother than any Disqualified Stock or Guarantor Subordinated Obligations) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (in each case other than Indebtedness owed to the Company or an Affiliate of the Company); provided that the Company shall equally and ratably reduce obligations under the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), ) or (iii) by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant, and such amounts may be retained by the applicable Foreign Subsidiary; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such repatriation will be promptly effected and such repatriated Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amountsthereof) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds (any such amount, “Retained Declined Proceeds”) for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Samples: Indenture (Viasat Inc)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company's Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Aa) any liabilities (as shown on -------- the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
and (Bb) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 180 days after such Asset Sale (to the extent of the cash or Cash Equivalents received), in each case within 180 days following ) shall be deemed to be cash for the receipt thereofpurposes of this provision only; and
(C3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 360 days of receipt thereof either:
(a) to prepay any Designated Noncash Consideration Senior Debt or Guarantor Senior Debt and, in the case of any Senior Debt or Guarantor Senior Debt under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;
(b) to make an Investment (x) in properties and assets that replace the properties and assets that were the subject of such Asset Sale, (y) in properties and assets that will be used in the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses the same, similar or reasonably related thereto or (z) permitted by clause (1) of the definition of Permitted Investments (collectively, "Replacement Assets"); or ------------------
(c) a combination of prepayment and investment permitted by the foregoing clauses (3)(a) and (3)(b). On the 361st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a), (3)(b) and (3)(c) of the next preceding paragraph (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash ------------------------------- Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of the next preceding paragraph (each a "Net Proceeds Offer Amount") shall be applied by the ------------------------- Company or such Restricted Subsidiary to make an offer to purchase (the "Net --- Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than -------------- ------------------------------- 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Securities equal to --- ---- the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Securities to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that if at any time any non- -------- ------- cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder as of the date of such conversion or disposition and the Net Cash Proceeds thereof shall be applied in accordance with this covenant. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $7.5 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $7.5 million, shall be applied as required pursuant to the preceding paragraph). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this covenant. Notwithstanding the first two paragraphs of this Section 4.16, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Replacement Assets; and
(2) such Asset Sale is for fair market value; provided that any -------- consideration not constituting Replacement Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the first two paragraphs of this Section 4.16. Notice of each Net Proceeds Offer pursuant to this subclause Section 4.16 shall be mailed or caused to be mailed, by first class mail, by the Company within 25 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(C1) that Holders may elect to have their Securities purchased by the Company either in whole or in part (subject to prorationing as hereinafter described in the event the Net Proceeds Offer is oversubscribed) in integral multiples of $1,000 of principal amount, at the applicable purchase price;
(3) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the Net Proceeds Offer Trigger Date, other than as may be required by applicable law);
(4) that time outstandingany Security not tendered will continue to accrue interest;
(5) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(6) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(7) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to exceed 2.0% of Total Assetsthe Net Proceeds Offer Pay- ment Date, calculated at a facsimile transmission or letter setting forth the time name of the receipt Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect Holder is withdrawing his election to subsequent changes in value)have such Security purchased; shall each be deemed to be Cash Equivalents.and
(b) Within 365 days after 8) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the Company’s or any Restricted Subsidiary’s receipt unpurchased portion of the Securities surrendered. On or before the Net Cash Proceeds of any Asset SaleOffer Payment Date, the Company shall (i) accept for payment Securities or a Restricted Subsidiaryportions thereof tendered pursuant to the Net Proceeds Offer, at its option(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, may apply plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereofprice, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is thereon set forth in the form notice of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition Offer. Any Security not so accepted shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt mailed by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary Holder thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) . For purposes of this Section 4.10(b) if and 4.16, the Trustee shall act as the Paying Agent. Any amounts remaining after the purchase of Securities pursuant to a Net Proceeds Offer shall be returned by the Trustee to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly the Securities tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess such excess Net Proceeds Offer Amount for general corporate purposes or for any purpose other purposes not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.16, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.16 by virtue thereof.
Appears in 1 contract
Samples: Indenture (Pacer Express Inc)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any Asset Sale unless:
Sale, unless (1i) the Company (or any of its Restricted Subsidiariesthe Subsidiary, as the case may be, ) receives consideration at the time of such sale or other disposition at least equal to the Fair Market Value thereof; (as determined at the time of contractually agreeing to such Asset Saleii) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0not less than 85% of the consideration from such Asset Sale received by the Company (or such Restricted Subsidiaryits Subsidiaries, as the case may be, ) is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Aa) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement assets with the effect that releases or indemnifies none of the Company or any of its Subsidiaries will have any obligation with respect to such Restricted Subsidiaryliabilities following such assumption by the transferee, as the case may be, from further liability therefor;
(Bb) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary its Subsidiaries from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 90 days following receipt (to the extent of the cash received) and (c) any Marketable Securities received by the Company or Cash Equivalents its Subsidiaries from such transferee that are converted by the Company or such Subsidiary into cash within 90 days following receipt (to the extent of the cash received), shall be deemed to be cash for purposes of this clause (ii); and (iii) the Net Cash Proceeds received by the Company (or its Subsidiaries, as the case may be) from such Asset Sale are applied in accordance with the following paragraphs of this Section 4.9. The Company may, (i) within 60 days following the receipt of Net Cash Proceeds from any Asset Sale, apply such Net Cash Proceeds to the repayment of Indebtedness of the Company under the Bank Revolving Credit Facility and to cash collateralize letters of credit outstanding thereunder, in each case to the extent required by (A) the terms of the Bank Revolving Credit Facility as in effect on the Issue Date in connection with an Asset Sale not prohibited by the Bank Revolving Credit Facility as in effect on the Issue Date, or (B) the terms of a consent granted by the "Lenders" thereunder to an Asset Sale prohibited by the Bank Revolving Credit Facility as in effect on the Issue Date; provided, that (x) any such repayment of Indebtedness shall result in a permanent reduction in the revolving credit or other commitment relating thereto in an amount equal to the principal amount so repaid, and (y) at such time as any such letters of credit are no longer required to be cash collateralized, any such cash collateralization shall be (1) utilized to repay Indebtedness under the Bank Revolving Credit Facility which repayment shall result in a permanent reduction in the revolving credit or other commitment relating thereto in an amount equal to the principal amount so repaid or (2) released to the Company and applied as Excess Proceeds in accordance with the following paragraph; or (ii) within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from any such Asset Sale (or any portion thereof) as follows:
(1) if Sale, apply such Net Cash Proceeds are from an Asset Sale that is not or commit pursuant to a disposition of Collateral, definitive contract to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if apply such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) within 60 days to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Related Business. Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) Sale is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by from being repatriated to the Company in its sole discretionUnited States, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with pursuant to this covenant; provided that clause (x) of this paragraph shall apply to such amounts covenant but may be retained for so long, but only for so long, as the applicable local law will not permit repatriation to the United States (the States. The Company hereby agreeing agrees to use commercially reasonable efforts to cause the applicable foreign Subsidiary to promptly take all reasonable actions reasonably required by the applicable local law, applicable organizational impediments or other impediment law to permit such repatriation), and if once such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law law, such repatriation will be immediately effected and is not subject to clause (y) of this paragraph, then, an amount equal to such repatriated Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods the manner set forth in this covenant as if such Asset Sale had occurred on the date of repatriation. If, upon completion of the applicable period, any portion of the Net Cash Proceeds of any Asset Sale shall not start have been applied by the Company as described in clause (i) or (ii) above (the "Excess Proceeds") and such Excess Proceeds, together with any remaining unapplied Excess Proceeds from any prior Asset Sale, exceed $5 million, then the Company will make an offer to repurchase the Notes pursuant to Section 3.9 (on a pro rata basis if the amount available for such repurchase is less than the outstanding principal amount of the Notes plus accrued and unpaid interest, if any, to the date of repurchase) at a purchase price of 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase; provided, however, that if following such a redemption or an offer to repurchase, assuming 100% acceptance, the outstanding principal amount of the Notes would be less than $20 million in the aggregate, the Company shall be obligated to either redeem or offer to repurchase Notes to the extent that following such a redemption or an offer to repurchase, assuming 100% acceptance, the outstanding principal amount of the Notes would be equal to $20 million or less in the aggregate, and the remaining Excess Proceeds shall be utilized as provided in the following paragraph until such time as the Net Cash aggregate of all unapplied Excess Proceeds may be repatriated (whether from all Asset Sales is sufficient to redeem or not such repatriation actually occurs).
(d) Pending repurchase 100% of the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any outstanding principal amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the Notes, at which time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required obligated to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (either redeem or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of repurchase the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indentureabove. If the aggregate principal amount of Notes surrendered by Holders thereof plus accrued and other Pari Passu Indebtedness surrendered by Holders or lendersunpaid interest, collectivelyif any, exceeds the amount of Excess Proceeds, selection the Company shall select the Notes to be purchased on a pro rata basis. If the aggregate principal amount of Notes for purchase will surrendered by Holders thereof in any Asset Sale Offer plus accrued and unpaid interest, if any, is less than the amount of Excess Proceeds, the unused portion of such Excess Proceeds (exclusive of any Excess Proceeds which could not be made utilized in such Asset Sale Offer as a result of the proviso in the next preceding sentence) may be used by the Company in accordance with (i) for general corporate purposes or (ii) subject to Section 3.04(f)4.10, to make distributions to RI for the purpose of repaying or redeeming RI Notes. Upon completion of such an Asset Sale Offer, the amount of Excess Proceeds shall be reset at zeroto the greater of zero or the amount of Excess Proceeds whose application would result in the aggregate principal amount of Notes outstanding being greater than zero and less than $20 million. Pending application pursuant to the above paragraphs, including to the extent unapplied Excess Proceeds do not exceed $5 million or application of Excess Proceeds would result in the aggregate principal amount of Notes outstanding being greater than zero and less than $20 million, Net Cash Proceeds shall be either invested in Cash Equivalents or remitted to the applicable lender to pay down any Indebtedness outstanding under the Bank Revolving Credit Facility (which pay down may but need not result in a permanent reduction in the revolving credit or other commitment relating thereto).
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, consummate make any Asset Sale unless:
unless (1i) the Company or any of its the Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such sale or other disposition at least equal to the Fair Market Value of the assets sold or disposed of as determined by the good faith judgment of the Board of Directors evidenced by a Board Resolution and (as ii) at least 80% of the consideration received for such sale or other disposition consists of cash or cash equivalents or the assumption of unsubordinated Indebtedness; provided that any securities, notes or other obligations issued by an Investment Grade Company with a Total Equity Market Capitalization in excess of $25 billion determined at the time of contractually agreeing any commitment to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from effect any such Asset Sale is entered into which are received by the Company or such the Restricted Subsidiary, as the case may be, is in and are converted within 180 days thereof into cash or cash equivalents shall be deemed to be cash or cash equivalents; provided further that the form amount of cash or Cash Equivalents; provided, however, to cash equivalents realized upon the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee sale of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations must be included within the amount of Net Cash Proceeds for purposes of clause (i)(B) of the next paragraph. The Company shall, or other assets or property received by shall cause the relevant Restricted Subsidiary to, within 270 days after the date of receipt of the Net Cash Proceeds from an Asset Sale, (i) (A) apply an amount equal to such Net Cash Proceeds to permanently repay unsubordinated Indebtedness of the Company or Indebtedness of any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received)Subsidiary, in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by owing to a Person other than the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market ValueSubsidiaries, taken together with all other Designated Noncash Consideration received pursuant to this subclause or (CB) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to if the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateralexceed $15 million, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied to make an offer to purchase (net an "Offer to Purchase") from the Holders on a pro rata basis an aggregate principal amount of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any Notes equal to such Net Cash Proceeds, at a purchase price equal to 100% of the principal amount of the Notes, plus, in each case, accrued and unpaid interest to the date of purchase and less the product of (a) the Market Value per share of the Common Stock of the Company and (b) the number of shares (including any portion of a share) of such Common Stock determined by dividing $50 by the Market Price of the Common Stock for each $1,000 in principal amount of Notes accepted for purchase by the Company (the "Offer to Purchase Payment"), provided that the Company shall not be obligated to make any Offer to Purchase after it has made one or more Offers to Purchase, which Offer or Offers to Purchase, in the aggregate, were for an aggregate principal amount of Notes equal to the aggregate principal amount of Notes issued on the Exchange Date (regardless of the actual aggregate principal amount of Notes actually tendered in such Offer or Offers to Purchase), or (C) if the Company has made sufficient Offers to Purchase such that it has satisfied its obligation as described in the final proviso to clause (B), invest an equal amount, or the amount not so applied pursuant to clause (A), in property or assets of a nature or type or that are used in a business (or in a company having property and assets of a nature or type, or engaged in a business) similar or related to the nature or type of the property and assets of, or the business of, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness existing on the date of such investment (including under as determined in good faith by the Board of Directors, whose determination shall be conclusive and evidenced by a revolving Debt FacilityBoard Resolution) or otherwise invest or utilize and (ii) apply (no later than the end of the 270-day period referred to above) such excess Net Cash Proceeds (to the extent not applied pursuant to clause (i)) as provided in the following paragraphs of this Section 1017. The amount of such Net Cash Proceeds required to be applied (or to be committed to be applied) during such 270-day period referred to above in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is the preceding sentence and not applied or invested as provided and within so required by the time end of such period set forth in Section 4.10(b) will be deemed to shall constitute “"Excess Proceeds”; provided". If, that as of the first day of any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When calendar month, the aggregate amount of Excess Proceeds exceeds not theretofore subject to an Excess Proceeds Offer (as defined below) totals at least $50.0 10 million, the Company will be required to must, not later than the 30th Business Day thereafter, make an offer (“Asset Sale an "Excess Proceeds Offer”") to all purchase from the Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make on a pro rata basis an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum aggregate principal amount of Notes and any such Pari Passu Indebtedness equal to which the Asset Sale Offer applies that may be purchased out of the Excess ProceedsProceeds on such date, at an offer a purchase price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness plus Notes, plus, in each case, accrued and unpaid interest to the date of purchase less the product of (but not includinga) the Market Value per share of the Common Stock of the Company and (b) the number of shares (including any portion of a share) of such Common Stock determined by dividing $50 by the Market Price of the Common Stock for each $1,000 in principal amount of Notes accepted for purchase by the Company (the "Excess Proceeds Payment"). The Company shall commence an Offer to Purchase or an Excess Proceeds Offer by mailing a notice to the Trustee and each Holder stating: (i) that the Offer to Purchase or Excess Proceeds Offer, as applicable, is being made pursuant to this Section 1017 and that all Notes validly tendered will be accepted for payment on a pro rata basis; (ii) the purchase price and the date of purchase (or which shall be a Business Day no earlier than 30 days nor later than 60 days from the date such lesser price with respect notice is mailed) (the "Offer Payment Date"); (iii) that any Note not tendered will continue to accrue interest pursuant to its terms; (iv) that, unless the Pari Passu Indebtedness, if any, as may be provided by Company defaults in the terms payment of such Indebtedness), in accordance with the procedures set forth in this Indenture Offer to Purchase Payment or the agreements governing the Pari Passu IndebtednessExcess Proceeds Payment, as applicable.
, any Note accepted for payment pursuant to the Offer to Purchase or the Excess Proceeds Offer, as applicable, shall cease to accrue interest on and after the applicable Offer Payment Date; (ev) To that Holders electing to have a Note purchased pursuant to the Offer to Purchase or the Excess Proceeds Offer, as applicable, will be required to surrender the Note, together with the form entitled "Option of the Holder to Elect Purchase" on the reverse side of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day immediately preceding the applicable Offer Payment Date; (vi) that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the third Business Day immediately preceding the applicable Offer Payment Date, a telegram, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Notes delivered for purchase and a statement that such Holder is withdrawing his election to have such Notes purchased; and (vii) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; provided that each Note purchased and each new Note issued shall be in a principal amount of $1,000 or integral multiples thereof. On the applicable Offer Payment Date, the Company shall (i) accept for payment on a pro rata basis Notes or portions thereof tendered pursuant to the Offer to Purchase or the Excess Proceeds Offer, as applicable; (ii) deposit with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so accepted; and (iii) deliver, or cause to be delivered, to the Trustee all Notes or portions thereof so accepted together with an Officer's Certificate specifying the Notes or portions thereof accepted for payment by the Company. The Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall upon Company Order promptly authenticate and mail to such Holders a new Note equal in principal amount to any unpurchased portion of the Note surrendered; provided that each Note purchased and each new Note issued shall be in a principal amount of $1,000 or integral multiples thereof. With respect to any Excess Proceeds Offer, to the extent that the aggregate principal amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for general corporate purposes. The Company shall publicly announce the results of the Excess Proceeds Offer as soon as practicable after the Offer Payment Date. For purposes of this Section 1017, the Trustee shall act as the Paying Agent. The Company shall comply with Rule 14e-1 under the Exchange Act and any purpose not prohibited by this Indenture. If other securities laws and regulations thereunder to the aggregate principal amount of Notes surrendered by Holders thereof extent such laws and other Pari Passu Indebtedness surrendered by Holders or lendersregulations are applicable, collectively, exceeds in the amount of Excess Proceeds, selection of Notes for purchase will be made by event that the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of undertakes an Offer to Purchase or Excess Proceeds shall be reset at zeroOffer under this Section 1017.
Appears in 1 contract
Samples: Indenture (World Access Inc /New/)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such (as determined in good faith by senior management or, in the case of an Asset SaleSale in excess of $5 million, by the Company's Board of Directors); and
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Aa) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
and (Bb) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 180 days after such Asset Sale (to the extent of the cash received) shall be deemed to be cash for the purposes of this provision; and (iii) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Equivalents receivedProceeds relating to such Asset Sale within 360 days of receipt thereof either (A) to prepay any Senior Debt or Guarantor Senior Debt and, in the case of any Senior Debt or Guarantor Senior Debt under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility, (B) to make an Investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses reasonably related, complementary or ancillary thereto or a reasonable expansion thereof ("Replacement Assets"), and/or (C) a combination of prepayment and investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 361st day after an Asset Sale or such earlier date, if any, as the senior management or Board of Directors, as the case may be, of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each case within 180 a "Net Proceeds Offer Amount") ------------------------- shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer ------------------ ------------------ Payment Date") not less than 30 nor more than 60 days following the receipt thereofapplicable ------------ Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Securities equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Securities to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, -------- ------- that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.16. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to this paragraph). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.16, and shall comply with the provisions of this Section 4.16 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.16. Notwithstanding the first two paragraphs of this Section 4.16, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Replacement Assets; and
(C2) such Asset Sale is for fair market value; provided that any Designated Noncash Consideration consideration not constituting Replacement Assets received by -------- the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the first two paragraphs of this Section 4.16. Notice of each Net Proceeds Offer pursuant to this subclause Section 4.16 shall be mailed or caused to be mailed, by first class mail, by the Company within 30 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(C1) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds Offer is being made pursuant to this Section 4.16 and that all Securities tendered will be accepted for payment; provided, however, that if the principal amount of any Asset SaleSecurities tendered in -------- ------- the Net Proceeds Offer exceeds the aggregate amount of Net Proceeds Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis;
(2) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by applicable law);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a Restricted Subsidiarystatement that such Holder is withdrawing his election to have such Security purchased; and
(7) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, at its optionthe Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, may apply (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereofprice, plus the amount of accrued but unpaid interest, if any, on thereon set forth in the amount notice of Notes that would otherwise such Net Proceeds Offer. Any Security not so accepted shall be prepaid;
(4) promptly mailed by the Company to make an investment inthe Holder thereof. For purposes of this Section 4.16, the Trustee shall act as the Paying Agent. Any amounts remaining after the purchase or otherwise acquire of Securities pursuant to a Net Proceeds Offer shall be returned by the Trustee to the Company. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or securities laws and regulations thereunder to make payments (including without limitation prepayments the extent such laws and progress payments) regulations are applicable in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form repurchase of Securities pursuant to a Net Proceeds Offer. To the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, extent that the assets acquired with the Net Cash Proceeds provisions of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company any securities laws or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied regulations conflict with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds4.16, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance shall comply with the provision described in clause (4) or (5) of this Section 4.10(b), applicable securities laws and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required regulations and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted have breached its obligations under this Section 4.16 by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicablevirtue thereof.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale Sale, unless:
(1) the Company or any of its such Restricted SubsidiariesSubsidiary, as the case may be, receives consideration from such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of or Capital Interests issued or sold (as in each case, such Fair Market Value to be determined at by the time Company on the date of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale); and
(2) except in the case of a Permitted Asset Swap, at least 75.075% of the consideration from such Asset Sale therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Eligible Cash Equivalents; provided, however, to the extent provided that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration following shall not be Excluded Assets and are required deemed to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For cash for purposes of this clause (2Section 4.10(a)(2) the amount ofand for no other purpose:
(A) any liabilities (as shown on reflected in the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orfootnotes thereto, or if incurred Incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected shown on the Company’s 's or such Restricted Subsidiary’s 's balance sheet or in the notes footnotes thereto if such incurrence Incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of sheet, as determined by the Company) of the Company or any such Restricted Subsidiary (Subsidiary, other than liabilities that are by their terms subordinated to the Notes, (i) that are extinguished for which the Company and all of its Restricted Subsidiaries have been validly released by all creditors in connection with writing or (ii) in respect of which neither the transactions relating to Company nor any Restricted Subsidiary following such Asset Sale, or that are assumed by the transferee of Sale has any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;obligation,
(B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case ) within 180 365 days following the receipt thereof; closing of such Asset Sale, and
(C) any Designated Noncash Non-cash Consideration received by the Company or any of its such Restricted Subsidiaries Subsidiary in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Non-cash Consideration received pursuant to this subclause clause (C) that is at that time outstanding, not to exceed 2.0no greater than 10% of Total Assets, calculated Assets of the Company and its Subsidiaries at the time of the receipt of such Designated Noncash Consideration (Non-cash Consideration, with the Fair Market Value of each item of Designated Noncash Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds of any Asset Sale, the Company or a such Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (Sale, or any portion thereof) as follows:other funds,
(1) if such Net Cash Proceeds are from an Asset Sale to permanently reduce:
(A) obligations under Credit Facilities, or under any senior Debt that is not a disposition of CollateralSecured Debt (and, to repaythe extent the obligations being reduced constitute revolving credit obligations, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): thereto); or
(xB) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness Debt of a Restricted Subsidiary (that is not a Guarantor, other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness Debt owed to the Company or an Affiliate of the Company)another Restricted Subsidiary;
(2) if such Net Cash Proceeds are from to make an Asset Sale Offer; or
(3) to make any combination of (A) an Investment in all or substantially all of the assets of one or more businesses, (B) an Investment in the Capital Interests of one or more businesses, provided that such business is not a disposition Restricted Subsidiary or such Investment results in such business becoming a Restricted Subsidiary, (C) capital expenditures or (D) acquisitions of Collateralother assets, in each of (A) through (D), that are used or useful in a Permitted Business or replace the businesses, properties and/or assets that are the subject of such Asset Sale; provided that, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
this clause (3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and a binding commitment (which may be subject to customary conditions) shall be treated as a permitted application of funds from the date of such commitment so long as the Company or such other Restricted Subsidiary enters into such commitment with the good faith expectation that investment, purchase or other acquisition is thereafter completed such funds will be applied to satisfy such commitment within 180 days after the end of such the 365-day periodperiod described above (an "Acceptable Commitment"); provided further, that if any Acceptable Commitment is later cancelled or terminated for any reason before such funds are so applied, then, to the extent the 365-day period referred to in the first sentence of this paragraph has lapsed, such unapplied amount shall constitute Excess Proceeds (as defined in clause (c) of this Section 4.10).
(c) Notwithstanding If the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not Sales exceeds the amount invested, expended or applied or invested as provided and within the time period periods set forth in clause (b) of this Section 4.10(b) 4.10, such excess amount will be deemed to constitute “"Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. ." When the aggregate amount of Excess Proceeds exceeds $50.0 150.0 million, the Company will be required to shall make an offer (“Asset Sale Offer”) to all Holders of Notes the Notes, and, to if required (or at the extent required Company's election, if permitted) by the terms of any other Pari Passu Indebtednesssenior Debt, to all the holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company any such senior Debt (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any "Asset SaleSale Offer"), to purchase the maximum aggregate principal amount of the Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies other senior Debt that is a minimum of $2,000 or an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds, Proceeds at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof, plus accrued and unpaid interest to (to, but not including) , the date of purchase (or such lesser price with respect to fixed for the Pari Passu Indebtedness, if any, as may be provided by the terms closing of such Indebtedness)offer, in accordance with the procedures set forth in this Indenture or Indenture. The Company will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the agreements governing date that Excess Proceeds exceed $150.0 million by sending the Pari Passu Indebtednessnotice required pursuant to the terms of this Indenture, as applicablewith a copy to the Trustee.
(ed) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly other senior Debt tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by general corporate purposes, subject to other covenants contained in this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered senior Debt tendered by Holders or lenders, collectively, such holders thereof exceeds the amount of Excess Proceeds, selection the Trustee shall select the Notes and the agent for such other senior Debt, as applicable, shall select such other senior Debt to be purchased by lot, pro rata or by any other method customarily authorized by clearing systems (so long as an authorized denomination results therefrom) based on the accreted value or principal amount of the Notes for purchase will be made by or such other senior Debt tendered. Additionally, the Company may, at its option, make an Asset Sale Offer using funds in accordance with Section 3.04(f)an amount equal to the amount of Net Proceeds from any Asset Sale at any time after consummation of such Asset Sale; provided that such Asset Sale Offer shall be in an aggregate amount of not less than $10.0 million. Upon completion of such any Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(e) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Debt outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.
(f) Notwithstanding anything to the contrary in this Section 4.10, all references herein to "Net Proceeds" and "Excess Proceeds" shall be deemed to mean cash in an amount equal to the amount of Net Proceeds or Excess Proceeds, as applicable, but not necessarily the actual cash received from the relevant Asset Sale. The Company and its Subsidiaries shall have no obligation to segregate, trace or otherwise identify Net Proceeds or Excess Proceeds (other than the amounts thereof), it being agreed that cash is fungible and that the Company's obligations under this Section 4.10 may be satisfied by the application of funds from other sources.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; anddisposed;
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, from such Asset Sale is in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ai) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such applicable balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant assets shall be deemed to an agreement be cash for purposes of this provision so long as the documents governing such liabilities provide that releases or indemnifies there is no further recourse to the Company or any of its Subsidiaries with respect to such Restricted Subsidiary, as the case may be, from further liability therefor;
liabilities; and (Bii) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required within 30 days after such Asset Sale shall be deemed to be satisfied cash for cash or Cash Equivalents (purposes of this provision to the extent of the cash or Cash Equivalents received), received in each case within 180 days following the receipt thereofthat conversion; and
(C3) any Designated Noncash Consideration received by the Company shall apply, or any of its cause such Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market ValueSubsidiary to apply, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal relating to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as followswithin 270 days of receipt thereof either:
(1a) if to the extent the assets and property that are the subject of such Net Cash Proceeds are from an Asset Sale that is do not a disposition of constitute Second Priority Collateral, to repayrepay Indebtedness under the Credit Agreement and, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of credit Indebtedness, permanently reduce the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) commitments in respect thereof if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.First Priority Agent;
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale Sale, unless:
(1) the Company or any of its such Restricted SubsidiariesSubsidiary, as the case may be, receives consideration from such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of or Capital Interests issued or sold (as in each case, such Fair Market Value to be determined at by the time Company on the date of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale); and
(2) except in the case of a Permitted Asset Swap, at least 75.075% of the consideration from such Asset Sale therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Eligible Cash Equivalents; provided, however, to the extent provided that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration following shall not be Excluded Assets and are required deemed to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For cash for purposes of this clause (2Section 4.10(a)(2) the amount ofand for no other purpose:
(A) any liabilities (as shown on reflected in the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orfootnotes thereto, or if incurred Incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected shown on the Company’s 's or such Restricted Subsidiary’s 's balance sheet or in the notes footnotes thereto if such incurrence Incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of sheet, as determined by the Company) of the Company or any such Restricted Subsidiary (Subsidiary, other than liabilities that are by their terms subordinated to the Notes, (i) that are extinguished for which the Company and all of its Restricted Subsidiaries have been validly released by all creditors in connection with writing or (ii) in respect of which neither the transactions relating to Company nor any Restricted Subsidiary following such Asset Sale, or that are assumed by the transferee of Sale has any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;obligation,
(B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case ) within 180 365 days following the receipt thereof; closing of such Asset Sale, and
(C) any Designated Noncash Non-cash Consideration received by the Company or any of its such Restricted Subsidiaries Subsidiary in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Non-cash Consideration received pursuant to this subclause clause (C) that is at that time outstanding, not to exceed 2.0no greater than 10% of Total Assets, calculated Assets of the Company and its Subsidiaries at the time of the receipt of such Designated Noncash Consideration (Non-cash Consideration, with the Fair Market Value of each item of Designated Noncash Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds of any Asset Sale, the Company or a such Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (Sale, or any portion thereof) as followsother funds:
(1) if such Net Cash Proceeds are from an Asset Sale to permanently reduce:
(A) obligations under Credit Facilities, or under any senior Debt that is not a disposition of CollateralSecured Debt (and, to repaythe extent the obligations being reduced constitute revolving credit obligations, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): thereto); or
(xB) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness Debt of a Restricted Subsidiary (that is not a Guarantor, other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness Debt owed to the Company or an Affiliate of the Company)another Restricted Subsidiary;
(2) if such Net Cash Proceeds are from to make an Asset Sale Offer; or
(3) to make any combination of (A) an Investment in all or substantially all of the assets of one or more businesses, (B) an Investment in the Capital Interests of one or more businesses, provided that such business is not a disposition Restricted Subsidiary or such Investment results in such business becoming a Restricted Subsidiary, (C) capital expenditures or (D) acquisitions of Collateralother assets, in each of (A) through (D), that are used or useful in a Permitted Business or replace the businesses, properties and/or assets that are the subject of such Asset Sale; provided that, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
this clause (3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and a binding commitment (which may be subject to customary conditions) shall be treated as a permitted application of funds from the date of such commitment so long as the Company or such other Restricted Subsidiary enters into such commitment with the good faith expectation that investment, purchase or other acquisition is thereafter completed such funds will be applied to satisfy such commitment within 180 days after the end of such the 365-day periodperiod described above (an "Acceptable Commitment"); provided further, that if any Acceptable Commitment is later cancelled or terminated for any reason before such funds are so applied, then, to the extent the 365-day period referred to in the first sentence of this paragraph has lapsed, such unapplied amount shall constitute Excess Proceeds (as defined in clause (c) of this Section 4.10).
(c) Notwithstanding If the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not Sales exceeds the amount invested, expended or applied or invested as provided and within the time period set forth periods described in clause (b) of this Section 4.10(b) 4.10, such excess amount will be deemed to constitute “"Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. ." When the aggregate amount of Excess Proceeds exceeds $50.0 100.0 million, the Company will be required to shall make an offer (“Asset Sale Offer”) to all Holders of Notes the Notes, and, to if required (or at the extent required Company's election, if permitted) by the terms of any other Pari Passu Indebtednesssenior Debt, to all the holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company any such senior Debt (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any "Asset SaleSale Offer"), to purchase the maximum aggregate principal amount of the Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies other senior Debt that is a minimum of €100,000 or an integral multiple of €1,000 in excess thereof that may be purchased out of the Excess Proceeds, Proceeds at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to fixed for the Pari Passu Indebtedness, if any, as may be provided by the terms closing of such Indebtedness)offer, in accordance with the procedures set forth in this Indenture or Indenture. The Company will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the agreements governing date that Excess Proceeds exceed $100.0 million by sending the Pari Passu Indebtednessnotice required pursuant to the terms of this Indenture, as applicablewith a copy to the Trustee.
(ed) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly other senior Debt tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by general corporate purposes, subject to other covenants contained in this Indenture. If the aggregate principal amount of Notes and other senior Debt surrendered by Holders such holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection the Trustee shall select the Notes and the agent for such other senior Debt, as applicable, shall select such other senior Debt to be purchased by lot, pro rata or by any other method customarily authorized by clearing systems (so long as an authorized denomination results therefrom) based on the accreted value or principal amount of the Notes for purchase will be made by or such other senior Debt tendered. Additionally, the Company may, at its option, make an Asset Sale Offer using funds in accordance with Section 3.04(f)an amount equal to the amount of Net Proceeds from any Asset Sale at any time after consummation of such Asset Sale; provided that such Asset Sale Offer shall be in an aggregate amount of not less than $10.0 million. Upon completion of such any Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(e) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Debt outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.
(f) Notwithstanding anything to the contrary in this Section 4.10, all references herein to "Net Proceeds" and "Excess Proceeds" shall be deemed to mean cash in an amount equal to the amount of Net Proceeds or Excess Proceeds, as applicable, but not necessarily the actual cash received from the relevant Asset Sale. The Company and its Subsidiaries shall have no obligation to segregate, trace or otherwise identify Net Proceeds or Excess Proceeds (other than the amounts thereof), it being agreed that cash is fungible and that the Company's obligations under this Section 4.10 may be satisfied by the application of funds from other sources.
Appears in 1 contract
Limitation on Asset Sales. (a) The Neither the Company shall not, and shall not permit nor any of its Restricted Subsidiaries to, will consummate any an Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiariesthe applicable Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to (as determined in good faith by management of the Company or, if such Asset Sale; and
Sale involves consideration in excess of $5,000,000, by the board of directors of the Company, as evidenced by a board resolution), (2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for Asset Sale is in cash or Cash Equivalents (other than in the case where the Company is exchanging all or substantially all the assets of one or more broadcast businesses operated by the Company (including by way of the transfer of capital stock) for all or substantially all the assets (including by way of the transfer of capital stock) constituting one or more broadcast businesses operated by another Person, in which event the foregoing requirement with respect to the extent receipt of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(Cshall not apply) any Designated Noncash Consideration and is received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of such disposition and (iii) upon the receipt consummation of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any an Asset Sale, the Company applies, or a Restricted Subsidiarycauses such Subsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition within 180 days of Collateralreceipt thereof, either (A) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) repay any Senior Indebtedness of the Company (other than or any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral Company (other than Indebtedness owed and, to the Company extent such Senior Indebtedness relates to principal under a revolving credit or an Affiliate similar facility, to obtain a corresponding reduction in the commitments thereunder), (B) to reinvest, or to be contractually committed to reinvest pursuant to a binding agreement, in Productive Assets and, in the latter case, to have so reinvested within 360 days of the Company);
(2) if date of receipt of such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3C) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed Securities tendered to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, for purchase at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (a price equal to the extent such purchases are at or above 100.0100% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, thereof plus the amount of accrued but unpaid interestinterest thereon, if any, on to the amount date of Notes that would otherwise be prepaid;
purchase pursuant to an offer to purchase made by the Company as set forth below (4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assetsa "Net Proceeds Offer"), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, providedhowever, that the Company and its Restricted Subsidiaries will be deemed to have complied may defer making a Net Proceeds Offer until the aggregate Net Cash Proceeds from Asset Sales not otherwise applied in accordance with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s 4.15 equal or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoingexceed $5,000,000. In addition, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by Sale also constitutes an asset sale under the Existing Indenture, a foreign Subsidiary (x) Net Proceeds Offer is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be only required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% proceeds which remain after the application of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), proceeds in accordance with the procedures set forth in this Indenture or terms of the agreements governing the Pari Passu Indebtedness, as applicableExisting Indenture.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, consummate make any Asset Sale unless:
unless (1i) the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (as evidenced by a resolution of the Board of Directors set forth in an Officers’ Certificate delivered to the Trustee) of the assets or other property sold or disposed of in the Asset Sale, and (ii) at least 75% of such consideration is in the form of cash or Cash Equivalents; provided, however, provided that for purposes of this covenant “cash” shall include the amount of any liabilities (other than liabilities that are by their terms subordinated to the extent that the assets sold in such Asset Sale were part Notes or any Subsidiary Guarantee) of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a such Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes assets or other obligations or other assets or property received by the Company or in such Asset Sale (and excluding any Restricted Subsidiary from such transferee liabilities that are converted by the Company incurred in connection with or in anticipation of such Restricted Subsidiary into cash or Cash EquivalentsAsset Sale), or by their terms are required to be satisfied for cash or Cash Equivalents (but only to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by that such assumption is effected on a basis under which there is no further recourse to the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiaryliabilities; provided, further, that the assets acquired Company and such Restricted Subsidiary shall be permitted to make an Asset Sale without complying with clause (ii) above to the extent the consideration for such Asset Sale constitutes Additional Assets.
(b) Within 360 days after any Asset Sale, the Company may elect to apply the Net Cash Proceeds from such Asset Sale to (i) permanently reduce any Senior Debt of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
Company, and/or (5ii) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceedsdirectly related to, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenanttelevision broadcasting business. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Senior Bank Debt Facility) of the Company or otherwise temporarily invest or utilize such Net Cash Proceeds in any manner not prohibited permitted by this Indenture. Any amount of Net Cash Proceeds from any an Asset Sale that is not applied or invested as provided and in the first sentence of this paragraph within the time period set forth in Section 4.10(b) 360 days of such Asset Sale will be deemed to constitute “Excess Proceeds.”; provided
(c) As soon as practical, that but in no event later than 10 Business Days after any amount of proceeds offered to Holders pursuant to clause date (3) of Section 4.10(b) or pursuant to an “Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When Trigger Date”) that the aggregate amount of Excess Proceeds exceeds $50.0 million5,000,000, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes andshall, if and to the extent required permitted by the terms agreements governing any Senior Debt of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or and the Subsidiary GuarantorExisting Notes Indentures as in effect on the Issue Date, as applicable) to make commence an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and other Indebtedness of the Company, if any (such other Indebtedness, “Pari Passu Indebtedness”), that ranks pari passu in right of payment with the Notes (to the extent required by the instrument governing such Pari Passu Indebtedness to which the Asset Sale Offer applies Indebtedness) that may be purchased out of the Excess ProceedsProceeds (an “Asset Sale Offer”). To the extent the Excess Proceeds are in respect of a XXXX Sale, in connection with complying with the foregoing requirement to make an Asset Sale Offer, the Company shall either (i) commence an Asset Sale Offer or (ii) commence an offer to purchase the maximum principal amount of Pari Passu Indebtedness of the Company (to the extent required by the instrument governing such other Indebtedness) that may be purchased out of the pro rata portion of Excess Proceeds attributable to such Pari Passu Indebtedness (the “Pari Passu Asset Sale Offer”); provided that the Company shall not have the right to effect a Pari Passu Asset Sale Offer unless it simultaneously uses the pro rata portion of the Excess Proceeds attributable to the Notes to effect a XXXX Redemption; provided, further, that prior to making any such Asset Sale Offer, Pari Passu Asset Sale Offer or XXXX Redemption the Company may, to the extent required pursuant to the terms of agreements governing any Senior Debt as in effect on the Issue Date, use all or a portion of such Excess Proceeds to redeem or repurchase Senior Debt; provided, further, that the Company shall have no obligation in connection with a XXXX Sale to make an Asset Sale Offer in respect of the Notes if it elects to effect both a XXXX Redemption and a Pari Passu Asset Sale Offer. Any Notes and Pari Passu Indebtedness to be purchased pursuant to an Asset Sale Offer shall be purchased pro rata based on the aggregate principal amount of Notes and such other Pari Passu Indebtedness outstanding and all Notes shall be purchased at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. To the extent that any Excess Proceeds remain after completion of an Asset Sale Offer or a Pari Passu Asset Sale Offer, the Company may use the remaining amount for general corporate purposes. In the event that the Company is prohibited under the terms of any agreement governing outstanding Senior Debt of the Company from repurchasing Notes with Excess Proceeds pursuant to an Asset Sale Offer or a XXXX Redemption, the Company shall be permitted to, in connection with an Asset Sale, repurchase its 10% Senior Subordinated Notes due 2011 pursuant to the terms of the indenture governing such notes to the extent required by such indenture or promptly use all Excess Proceeds to permanently reduce such outstanding Senior Debt of the Company.
(d) Within 30 days following the occurrence of any Asset Sale Offer Trigger Date, the Company shall mail to each holder of Notes at such holder’s registered address a notice stating: (i) that an Asset Sale Offer Trigger Date has occurred and that the Company is offering to purchase the maximum principal amount of Notes that may be purchased out of the Excess Proceeds (to the extent provided in Section 4.14(c)), at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an “Asset Sale Offer Purchase Date”), which shall be a Business Day, specified in such notice, that is less not earlier than 30 days or later than 60 days from the date such notice is mailed, (ii) the amount of accrued and unpaid interest as of the Asset Sale Offer Purchase Date, (iii) that any Note not tendered will continue to accrue interest, (iv) that, unless the Company defaults in the payment of the purchase price for the Notes payable pursuant to the Asset Sale Offer, any Notes accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Asset Sale Offer Purchase Date, (v) that Holders electing to tender any Note or portion thereof will be required to surrender their Note, with a form entitled “Option of Holder to Elect Purchase” completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Business Day preceding the Asset Sale Offer Purchase Date; provided that Holders electing to tender only a portion of any Note must tender a principal amount of $1,000 or integral multiples thereof, (vi) that Holders will be entitled to withdraw their election to tender Notes if the Paying Agent receives, not later than the Excess Proceedsclose of business on the third Business Day preceding the Asset Sale Offer Purchase Date, a facsimile transmission or letter setting forth the name of the Holder, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by delivered for purchase, and a statement that such Holder is withdrawing his election to have such Note purchased, and (vii) that Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds whose Notes are accepted for payment in part will be issued new Notes equal in principal amount to the unpurchased portion of Notes surrendered; provided that only Notes in a principal amount of Excess Proceeds, selection of Notes for purchase $1,000 or integral multiples thereof will be made by accepted for payment in part; it being understood that, in the event of a XXXX Sale, if the Company in accordance with elects to effect a XXXX Redemption, this Section 3.04(f). Upon completion of 4.14(d) shall not apply and the terms and requirements relating to such Asset Sale Offer, the amount of Excess Proceeds XXXX Redemption shall be reset at zerogoverned by Article III hereof.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2as determined in good faith by the Company’s Board of Directors), (ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash Equivalents; provided, however, to the extent Equivalents (provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assetsassets shall be deemed to be cash for purposes of this provision) and is received at the time of such disposition; and (iii) upon the consummation of an Asset Sale, property the Company shall apply, or Capital Stockcause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 410 days of receipt thereof either (A) to prepay any Senior Debt, Guarantor Senior Debt or Indebtedness of a Restricted Subsidiary that is not a Guarantor and, in each casethe case of any such Indebtedness under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility, (B) to make an investment in or expenditures for properties and assets (including Capital Stock of any entity) that replace the properties and assets that were the subject of such Asset Sale or in properties and assets (including Capital Stock of any entity) that will be used in the business of the Company and its Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto (“Replacement Assets”), or (C) purchase Existing Notes pursuant to the asset sale provisions of the indenture governing the Existing Notes or (D) a combination of prepayment, repurchase and investment permitted by the foregoing clauses (iii)(A), (iii)(B) and (iii)(C). On the 411th day after an agreement that releases Asset Sale or indemnifies such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B), (iii)(C) and (iii)(D) of the next preceding sentence (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B), (iii)(C) and (iii)(D) of the next preceding sentence (each a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted Subsidiary, as Subsidiary to make an offer to purchase (the case may be“Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from further liability therefor;
all Holders on a pro rata basis, that amount of Notes (Band, to the extent required by the instrument governing any Indebtedness, any other Indebtedness which ranks pari passu with the Notes designated by the Company) equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes (or, with respect to such other Indebtedness which ranks pari passu with the Notes, at a price no greater than the principal amount or accreted value thereof, whichever is less) to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that if at any securities, notes or other obligations or other assets or property time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.15. The Company shall not be required to make a Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $50 million resulting from one or more Asset Sales, at which time, the unutilized Net Proceeds Offer Amount, shall be applied as required pursuant to this paragraph, provided, however, that the first $50 million of Net Proceeds Offer Amount need not be applied as required pursuant to this paragraph. In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01 of the Original Indenture (it being understood that, for these purposes only, the Original Indenture is deemed to be in full force and effect without giving effect to this Amended and Restated Indenture) and as a result thereof the Company is no longer an obligor on the Notes, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.15, and shall comply with the provisions of this Section 4.15 with respect to such transferee that are converted by deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or such its Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required Subsidiaries deemed to be satisfied sold shall be deemed to be Net Cash Proceeds for cash or Cash Equivalents purposes of this Section 4.15.
(b) Notwithstanding the two immediately preceding paragraphs, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent (i) at least 80% of the cash or Cash Equivalents received)consideration for such Asset Sale constitutes Replacement Assets and (ii) such Asset Sale is for fair market value; provided, in each case within 180 days following the receipt thereof; and
(C) however, that any Designated Noncash Consideration consideration not constituting Replacement Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Valuepermitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the two preceding paragraphs.
(c) Subject to the deferral right set forth in the final proviso of Section 4.15(a), taken together with all other Designated Noncash Consideration received each notice of a Net Proceeds Offer pursuant to this subclause (C) that is Section 4.15 shall be mailed, by first-class mail, by the Company to Holders of Notes at that time outstanding, their last registered address not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 more than 30 days after the Company’s or any Restricted Subsidiary’s receipt of following the Net Cash Proceeds of any Asset SaleOffer Trigger Date, with a copy to the Company or a Restricted Subsidiary, at its option, may apply an amount equal Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as followsOffer and shall state the following terms:
(1) if such that the Net Cash Proceeds are from an Asset Sale that Offer is not a disposition of Collateral, being made pursuant to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness Section 4.15 of the Company (other than any Disqualified Stock or Subordinated Obligations) Indenture, that is secured by all Notes tendered will be accepted for payment; provided, however, that if the aggregate principal amount of Notes tendered in a Lien on assets that do not constitute a part Net Proceeds Offer plus accrued interest at the expiration of such offer exceeds the aggregate amount of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to Net Proceeds Offer, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000 or an Affiliate multiples thereof shall be purchased) and that the Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer periods as may be required by law;
(2) the purchase price (including the amount of accrued interest) and the Net Proceeds Offer Payment Date (which shall be not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date and which shall be at least five Business Days after the Trustee receives notice thereof from the Company);
(23) if such Net Cash Proceeds are from an Asset Sale that is any Note not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, tendered will continue to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiaryaccrue interest;
(34) that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to repaythe Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a Net Proceeds Offer will be required to surrender the Note, prepaywith the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto the Paying Agent at the address specified in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed notice prior to the Company close of business on the Business Day prior to the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a telegram, telex, facsimile transmission or an Affiliate letter setting forth the name of the Company and Holder, the Notes) and (y) principal amount of the Notes bythe holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and
(7) that Holders whose Notes are purchased only in part will be issued new Notes in a principal amount equal to the unpurchased portion of the Note surrendered; provided, at its option however, that each Note purchased and each new Note issued shall be in an original principal amount of $1,000 or integral multiples thereof. On or before the Net Proceeds Offer Payment Date, the Company shall (i) redeeming accept for payment Notes as provided under Section 3.01or portions thereof (in integral multiples of $1,000) validly tendered pursuant to the Net Proceeds Offer, (ii) purchasing Notes through open market purchases (to deposit with the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (Paying Agent in accordance with Section 2.14 U.S. Legal Tender sufficient to pay the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, price plus the amount of accrued but and unpaid interest, if any, on of all Notes to be purchased and (iii) deliver to the Trustee Notes so accepted together with an Officers’ Certificate stating the Notes or portions thereof being purchased by the Company. Upon receipt by the Paying Agent of the monies specified in clause (ii) above and a copy of the Officers’ Certificate specified in clause (iii) above, the Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price plus accrued and unpaid interest, if any, out of the funds deposited with the Paying Agent in accordance with the preceding sentence. The Trustee shall promptly authenticate and mail to such Holders new Notes equal in principal amount to any unpurchased portion of the Notes surrendered. Upon the payment of the purchase price for the Notes accepted for purchase, the Trustee shall return the Notes purchased to the Company for cancellation. Any monies remaining after the purchase of Notes pursuant to a Net Proceeds Offer shall be returned within three Business Days by the Trustee to the Company except with respect to monies owed as obligations to the Trustee pursuant to Article Seven. For purposes of this Section 4.15, the Trustee shall act as the Paying Agent. To the extent the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral tendered pursuant to any Net Proceeds Offer is less than the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed subject to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess such Net Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess portion of such Net Cash Proceeds not required to fund the repurchase of tendered Notes for general corporate purposes and such Net Proceeds Offer Amount shall be reset to zero.
(d) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any purpose not prohibited by this Indenture. If other securities laws and regulations thereunder to the aggregate principal amount extent such rule, laws and regulations are applicable in connection with the repurchase of Notes surrendered by Holders thereof pursuant to a Net Proceeds Offer. To the extent the provisions of any securities laws and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds regulations conflict with the amount provisions of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale this Indenture relating to a Net Proceeds Offer, the amount of Excess Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations relating to such Net Proceeds shall be reset at zeroOffer by virtue thereof.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such (as determined in good faith by the Company's senior management or, in the case of an Asset Sale; andSale in excess of $5.0 million, the Board of Directors of the Company);
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of (x) cash or Cash Equivalents; provided, however, to the extent that the (y) properties and assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt owned by the Company or any of its Restricted Subsidiaries and used in a Permitted Business or (z) Capital Stock in one or more Persons engaged in a Permitted Business that are or thereby become Restricted Subsidiary thereof. For purposes Subsidiaries of this clause (2) the Company, and, in each case, such consideration is received at the time of such disposition; PROVIDED that the amount of:
of (Aa) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
and (Bb) any securities, notes or other obligations or other assets or property securities received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 180 days after such Asset Sale (to the extent of the cash or Cash Equivalents received), in each case within 180 days following ) shall be deemed to be cash for the receipt thereofpurposes of this provision only; and
(Ciii) any Designated Noncash Consideration received by upon the Company or any consummation of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale (or any portion thereof) as followswithin 390 days of receipt thereof either:
(1A) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase prepay any Senior Debt or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateraland, in the case of an Asset Sale by any Senior Debt or Indebtedness of a Restricted Subsidiary that is under any revolving credit facility, effect a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto permanent reduction in the case availability under such revolving credit facility (or effect a permanent reduction in availability under such revolving credit facility regardless of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary the fact that no prepayment is a Non-Guarantor Subsidiaryrequired);
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4B) to make an investment in, purchase or otherwise acquire any one or more businesses, assets Investment (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress paymentsx) in connection with properties and assets that replace the properties and assets that were the subject of such investmentAsset Sale, purchase or other acquisition; provided, (y) in properties and assets that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not will be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt used by the Company or a Restricted Subsidiary thereof;
in a Permitted Business or (5z) to make an investment inpermitted by clause (1) of the definition of Permitted Investments (collectively, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof"REPLACEMENT ASSETS"); or
(6C) any a combination of the foregoing, provided, that the Company prepayment and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined investment permitted by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause foregoing clauses (xiii)(A) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States and (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriationiii)(B), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such the Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any On the 391st day after an Asset Sale or such earlier date, if any, as the senior management or the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding paragraph (each, a "NET PROCEEDS OFFER TRIGGER DATE"), such aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (iii)(A), (iii)(B) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3iii)(C) of Section 4.10(bthe next preceding paragraph (each a "NET PROCEEDS OFFER AMOUNT") or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase (the "NET PROCEEDS OFFER") on a date (the "NET PROCEEDS OFFER PAYMENT DATE") not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Securities equal to the Net Proceeds Offer Amount at a price equal to 100% of the Accreted Value of the Securities to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; PROVIDED, HOWEVER, that if the Company -76- is required by the terms of any Senior Subordinated Debt, such Pari Passu Indebtedness with the proceeds from any Asset Sale, Net Proceeds Offer may be made ratably to purchase the maximum Securities and such other Indebtedness of the Company that ranks PARI PASSU with the Securities. If at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder as of the date of such conversion or disposition and the Net Cash Proceeds thereof shall be applied in accordance with this Section. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to the second preceding paragraph). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.1, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section, and shall comply with the provisions of clause (iii) of this Section with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.17. Notice of each Net Proceeds Offer pursuant to this Section 4.17 shall be mailed or caused to be mailed, by first class mail, by the Company within 25 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(i) that Holders may elect to have their Securities purchased by the Company either in whole or in part (subject to proration as hereinafter described in the event the Net Proceeds Offer is oversubscribed) in integral multiples of $1,000 principal amount at maturity, at the applicable purchase price;
(ii) that the Net Proceeds Offer is being made pursuant to this Section 4.17 and that all Securities tendered will be accepted for payment; PROVIDED, HOWEVER, that if the principal amount of Notes and any Securities tendered in the Net Proceeds Offer exceeds the -77- aggregate amount of the Net Proceeds Offer Amount, the Company shall select the Securities to be purchased on a PRO RATA basis (based on amounts tendered) (with such Pari Passu Indebtedness to which the Asset Sale Offer applies that adjustments as may be deemed appropriate by the Company so that only Securities in denominations of $1,000 principal amount at maturity, or integral multiples thereof, shall be purchased);
(iii) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the Net Proceeds Offer Trigger Date, other than as may be required by applicable law);
(iv) that any Security not tendered will continue to accrete Accreted Value or accrue interest, as the case may be;
(v) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(vi) that Holders electing to have a Security purchased out pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Excess ProceedsSecurity completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(vii) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Security purchased; and
(viii) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an offer price in cash Officers' Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness purchase price, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessinterest, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures thereon set forth in the notice of such Net Proceeds Offer. Any Security not so accepted shall be promptly mailed by the Company to the Holder thereof. For purposes of this Indenture or Section 4.17, the agreements governing Trustee shall act as the Pari Passu Indebtedness, as applicable.
(e) Paying Agent. Any amounts remaining after the purchase of Securities pursuant to a Net Proceeds Offer shall be returned by the Trustee to the Company. To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly the Securities tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess such excess Net Proceeds Offer Amount for general corporate purposes or for any purpose other purposes not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.17, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.17 by virtue thereof. The provisions of this Section and other provisions contained in this Indenture relating to the Company's obligation to make a Net Proceeds Offer may be waived or modified with the written consent of the Holders of a majority in principal amount at maturity of the Securities.
Appears in 1 contract
Samples: Indenture (Salt Holdings Corp)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any summate an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; andof;
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or cash, Cash EquivalentsEquivalents and/or Replacement Assets (as defined below) and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Aa) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated in right of payment to the NotesNotes or any Guarantee of a Guarantor) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property and (b) any notes or Capital Stockother obligations received by the Company or any such Restricted Subsidiary from such transferee that are immediately converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received), shall be deemed to be cash for the purposes of this provision; and
(3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 270 days of receipt thereof either;
(a) to (x) repay and permanently reduce the availability of credit under the Credit Agreement or (y) repay and elect to reduce the amount of outstanding Indebtedness permitted to be incurred pursuant to clauses (11) and/or (16) of the definition of Permitted Indebtedness;
(b) to make an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in the same or a similar line of business as the Company or the Restricted Subsidiary, as the case may be, as existing on the date of this In denture or in businesses reasonably related thereto (“Replacement Assets”); provided that the Net Cash Proceeds from an Asset Sale relating to the Company’s tobacco business are used to make an investment in Replacement Assets relating to the tobacco business; provided further that the Net Cash Proceeds of an Asset Sale relating to assets owned directly by the Company or a Guarantor are used to make an investment in Replacement Assets owned directly by the Company or a Guarantor;
(c) to permanently reduce any outstanding Indebtedness of such Restricted Subsidiary to the extent such Restricted Subsidiary is not a Guarantor (and to correspondingly reduce the commitments, if any, with respect thereto); or
(d) a combination of repayment and investment permitted by the foregoing clauses (3)(a), (3)(b) and (3)(c). On the 271st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a), (3)(b), (3)(c) and (3)(d) of the preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b), (3)(c) and (3)(d) of the preceding paragraph (each, a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in each caseconnection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), pursuant then such conversion or dissolution shall be deemed to constitute an agreement that releases or indemnifies Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.15. The Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by may defer the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having Net Proceeds Offer until there is an aggregate Fair Market Valueunutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, taken together with all other Designated Noncash Consideration received the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million shall be applied as required pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in valueparagraph); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) . Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all restriction contained in clause (2) of the Net Cash Proceeds first paragraph of this Section 4.15 shall not apply with respect to any Asset Sales by a foreign Subsidiary (x) is prohibited sale, in whole or delayed by applicable local law in part, of assets or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in Capital Stock of Standard Wool, Inc. In connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such each Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash ProceedsOffer, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under shall send, by first class mail, a revolving Debt Facility) or otherwise invest or utilize such notice to each Holder, with a copy to the Trustee, notice of such, within 25 days following the Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; providedOffer Trigger Date, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance comply with the procedures set forth in this Indenture Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) in part in integral multiples of $1,000 in exchange for cash. To the extent that Holders properly tender Notes in an amount exceeding the aggregate amount Net Proceeds Offer Amount, Notes of tendering Holders shall be purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as may be required by law. The Company and any such Restricted Subsidiaries will comply with the requirements of Rule 14e-1 under the Exchange Act and the regulations thereunder and any other securities laws to the extent such laws and regulations are applicable in connection with the repurchase of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess a Net Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Samples: Indenture (Standard Commercial Corp)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of the Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; of, and
(2) at least 75.075% of the consideration from received for the assets sold or disposed of by the Company or the Restricted Subsidiary, as the case may be, in the Asset Sale shall be in the form of any one or more of the following:
(i) cash or Cash Equivalents;
(ii) the assumption at the time of such Asset Sale by the purchaser of liabilities (other than Subordinated Indebtedness) of the Company and its Restricted Subsidiaries owed to Persons other than Affiliates of the Company as a result of which the Company and the Restricted Subsidiaries are no longer obligated with respect thereto;
(iii) marketable securities received by the Company and its Restricted Subsidiaries at the time of such Asset Sale that are converted into cash or Cash Equivalents by the Company and its Restricted Subsidiaries within 90 days of such Asset Sale;
(iv) assets (other than Capital Stock or current assets as determined in accordance with GAAP, except for current assets related to, and acquired in connection with, the acquisition of a business or of assets other than current assets) to be used by the Company or any Restricted Subsidiary in a Permitted Business; or
(v) in the case of a sale or other disposition of Capital Stock of a Person other than a Subsidiary of the Company, Capital Stock of another Person that is not a Subsidiary of the Company immediately prior to such sale or other disposition.
(b) The Company or such Restricted Subsidiary, as the case may be, is in may apply the form Net Cash Proceeds of cash or Cash Equivalents; provided, however, to the extent that the assets sold in any such Asset Sale were part within 360 days thereof to any one or more of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount offollowing:
(A1) repay any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) Senior Indebtedness of the Company or any Note Guarantor or Indebtedness of any Restricted Subsidiary that is not a Note Guarantor, in each case for borrowed money or constituting a Capitalized Lease Obligation and permanently reduce the commitments with respect thereto without Refinancing,
(2) repay or repurchase and permanently reduce commitments with respect thereto without Refinancing Notes and other Senior Subordinated Indebtedness of the Company or any Note Guarantor for money borrowed on a pro rata basis based on their respective aggregate principal amounts, or
(i) make capital expenditures or purchase from a Person other than the Company and its Restricted Subsidiaries assets (other than liabilities that are by their terms subordinated to the Notes) that are extinguished Capital Stock or current assets as determined in accordance with GAAP, except for current assets related to, and acquired in connection with with, the transactions relating acquisition of a business or of assets other than current assets) to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received be used by the Company or any Restricted Subsidiary from such transferee in a Permitted Business, or
(ii) purchase Capital Stock of a Person engaged in a Permitted Business that are converted will become, upon purchase, a Restricted Subsidiary or purchase all or substantially all of the assets of a business or division, which assets will be owned by the Company or such a Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received)Subsidiary, in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by from a Person other than the Company or any of and its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash EquivalentsSubsidiaries.
(bc) Within 365 days after To the Company’s extent all or any Restricted Subsidiary’s receipt a portion of the Net Cash Proceeds of any Asset Sale, Sale are not applied within the Company or a Restricted Subsidiary, at its option, may apply an amount equal to 360 days of the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (41), (2) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million3.11(b), the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with Notes (the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the "Asset Sale Offer applies that may be purchased out of the Excess ProceedsOffer"), at an offer a purchase price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness to be purchased, plus accrued and unpaid interest thereon, to (but not including) the date of purchase (the "Asset Sale Offer Amount"). Pursuant to an Asset Sale Offer, the Company shall purchase from all tendering Holders on a pro rata basis, and, at the Company's option, on a pro rata basis with the holders of any other Senior Subordinated Indebtedness, that principal amount (or accreted value in the case of Indebtedness issued with original issue discount) of Notes and the other Senior Subordinated Indebtedness to be purchased equal to such lesser price unapplied Net Cash Proceeds.
(d) The purchase of Notes pursuant to an Asset Sale Offer shall occur not less than 20 business days following the date thereof, or any longer period as may be required by law, nor more than 45 days following the 360th day following the Asset Sale. The Company may, however, defer an Asset Sale Offer until there is an aggregate amount of unapplied Net Cash Proceeds from one or more Asset Sales equal to or in excess of $10 million. At that time, the entire amount of unapplied Net Cash Proceeds, and not just the amount in excess of $10 million, shall be applied as required pursuant to this Section 3.11. Pending application in accordance with respect this Section 3.11, Net Cash Proceeds may be applied to temporarily reduce revolving credit borrowings which can be reborrowed or invested in Cash Equivalents.
(e) Each Asset Sale Offer Notice will be mailed first class, postage prepaid, to the Pari Passu record Holders as shown on the register of Holders within 20 days following such 360th day, with a copy to the Trustee offering to purchase the Notes as described above. Upon receiving an Asset Sale Offer Notice, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 in exchange for cash.
(f) On the Asset Sale Offer Payment Date, the Company will, to the extent lawful:
(1) accept for payment all Notes or portions thereof properly tendered pursuant to the Asset Sale Offer;
(2) deposit with the Paying Agent funds in an amount equal to the Asset Sale Offer Amount in respect of all Notes or portions thereof so tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company.
(g) To the extent Holders of Notes and holders of other Senior Subordinated Indebtedness, if any, as may be provided by which are the terms subject of such Indebtedness), in accordance with the procedures set forth in this Indenture an Asset Sale Offer properly tender and do not validly withdraw Notes or the agreements governing other Senior Subordinated Indebtedness in an aggregate amount exceeding the Pari Passu Indebtednessamount of unapplied Net Cash Proceeds, the Company will purchase the Notes and the other Senior Subordinated Indebtedness on a pro rata basis (based on amounts tendered). If only a portion of a Note is purchased pursuant to an Asset Sale Offer, a new Note in a principal amount equal to the portion thereof not purchased will be issued in the name of the Holder thereof upon cancellation of the original Note (or appropriate adjustments to the amount and beneficial interests in a Global Note will be made, as applicableappropriate). Notes (or portions thereof) purchased pursuant to an Asset Sale Offer will be cancelled and cannot be reissued.
(eh) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other applicable securities laws in connection with the purchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any applicable securities laws or regulations conflict with Section 3.11 and the other provisions of this Indenture relating to Asset Sales, the Company shall comply with these laws and regulations and shall not be deemed to have breached its obligations under this Section 3.11 by virtue of such conflict.
(i) Upon completion of an Asset Sale Offer, the amount of Net Cash Proceeds will be reset at zero. To the extent that the aggregate amount of Notes and Pari Passu other Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess aggregate amount of unapplied Net Cash Proceeds, the Company may use any remaining Excess Net Cash Proceeds for general corporate purposes of the Company and its Restricted Subsidiaries.
(j) If at any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made time any non-cash consideration received by the Company or any Restricted Subsidiary, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any non-cash consideration), the conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 3.04(f). Upon completion 3.11 within 360 days of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zeroconversion or disposition.
Appears in 1 contract
Samples: Indenture (Constar Inc)
Limitation on Asset Sales. (a) The Prior to the Effective Date, the Company shall not consummate an Asset Sale except in connection with the consummation of the Transactions and the transactions contemplated by the Escrow Agreement, including the BWAY Assumption and related release of the Escrowed Property. From and after the Effective Date, the Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company’s Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, is in the form of from such Asset Sale shall be cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Ax) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesNotes and other than liabilities consisting of Disqualified Capital Stock)
(i) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies assets and from which the Company and its Restricted Subsidiaries are unconditionally released or indemnified against by such transferee or (ii) in respect of which neither the Company nor any Restricted Subsidiary, as the case may be, from further liability therefor;
Subsidiary following such sale has any obligation and (By) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are promptly, but in no event more than 60 days after receipt, converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofshall be deemed to be cash for purposes of this provision; and
(C3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 365 days of receipt thereof either:
(a) to prepay any Designated Noncash Consideration Senior Debt, Guarantor Senior Debt or Indebtedness of a Restricted Subsidiary that is not a Guarantor and, in the case of any Senior Debt, Guarantor Senior Debt or Indebtedness of a Restricted Subsidiary that is not a Guarantor under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;
(b) to reinvest in Productive Assets; or
(c) a combination of prepayment and investment permitted by the foregoing clauses (3)(a) and (3)(b). On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence (each, a “Net Proceeds Offer Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c) of the immediately preceding sentence (each a “Net Proceeds Offer Amount”) shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase for cash (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment Date”) not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trig- ger Date, from all Holders on a pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount at a price in cash equal to 100% of the principal amount of the Securities to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest, dividends or other earnings received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this covenant. Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $10.0 million, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by the Company and its Restricted Subsidiaries aggregates at least $10.0 million, at which time the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $10.0 million or more shall be deemed to be a “Net Proceeds Offer Trigger Date”). Notwithstanding the immediately preceding paragraphs of this Section 4.13, the Company and its Restricted Subsidiaries shall be permitted to consummate an Asset Sale without complying with such paragraphs to the extent that:
(1) at least 75% of the consideration for such Asset Sale constitutes Productive Assets; and
(2) such Asset Sale is for at least fair market value (as determined in good faith by the Company’s Board of Directors); provided that any consideration not constituting Productive Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Valuepermitted to be consummated under this paragraph shall constitute consideration for purposes of the definition of “Net Cash Proceeds” and shall be subject to the provisions of the two preceding paragraphs; provided, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt entering into such transaction or immediately after giving effect thereto, no Default or Event of such Designated Noncash Consideration (with the Fair Market Value Default shall have occurred or be continuing or would occur as a consequence thereof. Notice of each item of Designated Noncash Consideration being measured at the time received without giving effect Net Proceeds Offer pursuant to subsequent changes in value); this Section 4.13 shall each be deemed mailed or caused to be Cash Equivalents.
(b) Within 365 mailed, by first class mail, by the Company within 25 days after following the Company’s applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or any Restricted Subsidiary’s receipt such longer period as may be required by law. Upon receiving notice of the Net Cash Proceeds Offer, Holders may elect to tender their Securities in whole or in part in integral multiples of any Asset Sale$1,000 in exchange for cash. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to this Section 4.13 and that all Securities tendered will be accepted for payment; provided, however, that if the principal amount of Securities tendered in the Net Proceeds Offer exceeds the aggregate amount of Net Proceeds Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis;
(2) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by applicable law);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Security completed, to the Paying Agent at the address speci- fied in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a Restricted Subsidiarystatement that such Holder is withdrawing his election to have such Security purchased; and
(7) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, at its optionthe Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, may apply (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers’ Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereofprice, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is thereon set forth in the form notice of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition Offer. Any Security not so accepted shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt mailed by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary Holder thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) . For purposes of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds4.13, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph Trustee shall apply to such amounts so long, but only so long, act as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenantPaying Agent. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale a Net Proceeds Offer is less than the Excess ProceedsNet Proceeds Offer Amount, the Company may use any remaining Excess Net Proceeds Offer Amount for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f)general corporate purposes. Upon completion of any such Asset Sale Net Proceeds Offer, the amount of Excess Net Proceeds Offer Amount shall be reset at zero. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.13, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.13 by virtue thereof.
Appears in 1 contract
Samples: Indenture (Bway Corp)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1i) the Company or any of its the applicable Restricted Subsidiaries, as the case may be, Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; andas deter-mined in good faith by the Company's Board of Directors;
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or the applicable Restricted Subsidiary from such Restricted Subsidiary, as the case may be, is Asset Sale shall be in the form of cash or Cash Equivalents; provided, however, and is received at the time of the Asset Sale (which shall be deemed to the extent that the assets sold in include other consideration converted to cash or Cash Equivalents within 90 days of such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereofSale). For the purposes of this clause (2) provision, the amount of:
(A) of any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent applicable balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any the applicable Restricted Subsidiary (Subsidiary, other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required will be deemed to be satisfied cash for cash or Cash Equivalents (to the extent purposes of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereofthis provision; and
(Ciii) any Designated Noncash Consideration received by upon the consummation of an Asset Sale, the Company shall apply, or any of its cause such applicable Restricted Subsidiaries in Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 415 days of having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Net Cash EquivalentsProceeds.
(b) Within 365 days after Additionally, the Company’s or any Restricted Subsidiary’s receipt of Company may only apply the Net Cash Proceeds of either (i) to prepay any Asset Sale, the Company Designated Senior Debt or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of CollateralGuarantor and, in the case of an Asset Sale by any such Indebtedness under any revolving credit facility, effect a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto permanent reduction in the case of availability under such revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repaycredit facility, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, and/or (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase in or otherwise acquire any one or more businesses, expenditures for properties and assets (other than working capital assets), properties or capital expenditures, in each case including Capital Stock of any entity) that will be used or useful in a Similar Permitted Business or to ("Replacement Assets") and/or (iv) make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the an acquisition of (A) assets of any Person or division or (B) Capital Stock of a Person, Person that as a result of such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or becomes a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoingCompany, providedin either case, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause conducting a Permitted Business (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b"RelatedBusinesses"), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its or any Restricted Subsidiaries Subsidiary of the Company may temporarily reduce Indebtedness (including under a revolving Debt Facility) credit borrowings or otherwise invest or utilize such Net Cash Proceeds in any manner that is not prohibited by the terms of this Indenture. Any .
(d) On the 366th day after an Asset Sale or any earlier date, if any, on which the Board of Directors of the Company or of the applicable Restricted Subsidiary determines not to apply the Net Cash Proceeds in accordance with the provisions of Section 4.15(b) (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied or invested as provided contractually committed to be applied (and within to the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; providedextent not subsequently applied, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale the Net Proceeds Offer made at any time after the Asset Sale Trigger Date related thereto shall be deemed to have been applied be the date of termination of such contractual commitment or any earlier date, if any, on which the Board of Directors of the Company or the board of the applicable Restricted Subsidiary determines not to apply the Net Cash Proceeds in accordance with such contractual commitment) on or before such Net Proceeds Offer Trigger Date as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted permitted by the Holders. When provisions of Section 4.15(b) (the aggregate amount of Excess "Net Proceeds exceeds $50.0 million, Offer Amount") shall be applied by the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the such Restricted Subsidiary Guarantor, as applicable) to make an offer to purchase (or repay, prepay or redeem, as the case may be) (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") that is not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders and all holders of Indebtedness that is equal in right of payment with the Notes and contains provisions requiring that an offer to purchase such Pari Passu other Indebtedness be made with the proceeds from any of the Asset Sale, to purchase on a pro rata basis, the maximum principal amount of Notes and any such Pari Passu other Indebtedness to which the Asset Sale Offer applies that may be purchased out with the Net Proceeds Offer Amount. Notwithstanding the foregoing, the obligation to make a Net Proceeds Offer shall be suspended until such time as the aggregate amount of the Excess Proceeds, at an Net Proceeds Offer Amount is equal to or exceeds €20 million. The offer price in cash in an amount any Net Proceeds Offer will be equal to 100.0100% of the principal value of the Notes to be purchased, plus any accrued and unpaid interest to the date of purchase. The following events will be deemed to constitute an Asset Sale and the Net Cash Proceeds for such Asset Sale must be applied in accordance with this Section 4.15: (i) in the event any non-cash consideration received by the Company or any Restricted Subsidiary of the Company in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), or (ii) in the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01 and as a result thereof the Company is no longer an obligor on the Notes, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.15, and shall comply with the provisions of this Section 4.15 with respect to such deemed sale as if it were an Asset Sale. In addition, the Fair Market Value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.15.
(e) Notwithstanding the preceding paragraphs, the Company and its Restricted Subsidiaries may con-summate an Asset Sale without complying with such paragraphs to the extent (i) the consideration for such Asset Sale constitutes Replacement Assets or Related Businesses and (ii) such Asset Sale is for Fair Market Value; provided,however, that any consideration that does not constitute Replacement Assets or Related Businesses that is received by the Company or any of its Restricted Subsidiaries in connection with any Asset Sale permitted under this paragraph shall constitute Net Cash Proceeds and will be subject to the provisions described in the preceding paragraphs.
(f) Each notice of a Net Proceeds Offer pursuant to this Section 4.15 shall be mailed by the Company to Holders of Notes not more than 30 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to Section 4.15 of this Indenture, that all Notes tendered will be accepted for payment; provided,however, that if the aggregate principal amount of Notes tendered in a Net Proceeds Offer plus accrued interest at the expiration of such offer exceeds the aggregate amount of the Net Proceeds Offer, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that no Note of less than $75,000 or €50,000, as the case may be, shall remain outstanding thereafter) and that the Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer periods as may be required by law;
(2) the purchase price (including the amount of accrued interest) and the Net Proceeds Offer Payment Date (which shall be not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date and which shall be at least five Business Days after the Trustee receives notice thereof from the Company);
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a Net Proceeds Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes the holder delivered for purchase and Pari Passu Indebtedness a statement that such Holder is withdrawing his election to have such Note purchased; and
(7) that Holders whose Notes are purchased only in part will be issued new Notes of the appropriate series in a principal amount equal to the unpurchased portion of the Note surrendered; provided,however, that each such new Note shall be in the same currency as the tendered Note and in a principal amount of $75,000 or €50,000, as the case may be, or an integral multiple of $1,000 or €1,000, as the case may be, in excess thereof. On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment Notes or portions thereof (in a principal amount of $75,000 or €50,000, as the case may be, or an integral multiple of $1,000 or F1,000, as the case may be, in excess thereof) validly tendered pursuant to the Net Proceeds Offer, (ii) deposit with the Paying Agent, in accordance with Section 2.14, U.S. Legal Tender (in the case of Dollar Notes) and/or euro (in the case of Euro Notes) sufficient to pay the purchase price plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessinterest, if any, as may of all Notes to be provided purchased and (iii) deliver to the Trustee Notes so accepted together with an Officer's Certificate stating the Notes or portions thereof being purchased by the terms Company. Upon receipt by the Paying Agent of such Indebtedness)the monies specified in clause (ii) above and a copy of the Officer's Certificate specified in clause (iii) above, the Paying Agent shall promptly mail to the Holders of Notes so accepted payment in an amount equal to the purchase price plus accrued and unpaid interest, if any, out of the funds deposited with the Paying Agent in accordance with the procedures set forth preceding sentence. The Trustee shall promptly authenticate and mail or cause to be transferred by book-entry to such Holders new Notes equal in this Indenture principal amount to any unpurchased portion of the Notes surrendered; provided that each such new Note shall be in the same currency as the surrendered Note and in a principal amount of $75,000 or the agreements governing the Pari Passu Indebtedness€50,000, as applicable.
(e) the case may be, or an integral multiple of $1,000 or €1,000, as the case may be, in excess thereof. Upon the payment of the purchase price for the Notes accepted for purchase, the Trustee shall return the Notes purchased to the Company for cancellation. Any monies remaining after the purchase of Notes pursuant to a Net Proceeds Offer shall be returned within three Business Days by the Trustee to the Company except with respect to monies owed as obligations to the Trustee pursuant to Article Seven. For purposes of this Section 4.15, the Trustee shall act as the Paying Agent for the Dollar Notes and the Euro Paying Agent shall act as the Paying Agent for the Euro Notes. To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale any Net Proceeds Offer is less than the Excess Proceedsamount of Net Cash Proceeds subject to such Net Proceeds Offer, the Company may use any remaining Excess portion of such Net Cash Proceeds not required to fund the repurchase of tendered Notes for general corporate purposes and such Net Proceeds Offer Amount shall be reset to zero. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any purpose not prohibited by this Indenture. If other securities laws and regulations thereunder to the aggregate principal amount extent such rule, laws and regulations are applicable in connection with the repurchase of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders pursuant to a Net Proceeds Offer. To the extent the provisions of any securities laws or lenders, collectively, exceeds regulations conflict with the amount provisions of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale this Indenture relating to a Net Proceeds Offer, the amount of Excess Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations relating to such Net Proceeds shall be reset at zeroOffer by virtue thereof.
Appears in 1 contract
Samples: Indenture (Lyondell Chemical Co)
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2as determined in good faith by the Company's Board of Directors), (ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Companythereto) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any in such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies Asset Sale and from which the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
Subsidiary is released and (B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are immediately converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) shall be deemed to be cash for the purposes of this Section 4.15; and (iii) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 360 days of receipt thereof either (A) to repay any Indebtedness ranking at least pari passu with the Notes (including amounts under Bank Credit Facilities), (B) to make an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties and assets that shall be used in the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto ("Replacement Assets"), or (C) a combination of prepayment and investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 361st day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), an amount equal to such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each case within 180 a "Net Proceeds Offer Amount") shall be applied by the Company or such Restricted Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 45 nor more than 60 days following the receipt thereofapplicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; and
provided, however, that if at any time any consideration other than cash or Cash Equivalents received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (Cother than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this covenant. A transfer of assets by the Company to a Wholly Owned Restricted Subsidiary or by a Restricted Subsidiary to the Company or to a Wholly Owned Restricted Subsidiary will not be deemed to be an Asset Sale. A transaction that is subject to and made in compliance with Section 5.01 shall not be subject to the application of this Section 4.15. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $5,000,000 resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $5,000,000, shall be applied as required pursuant to this paragraph). Notwithstanding the immediately preceding paragraph, the Company and its Restricted Subsidiaries shall be permitted to consummate an Asset Sale without complying with such paragraph to the extent (i) at least 75% of the consideration for such Asset Sale constitutes Replacement Assets and (ii) such Asset Sale is for fair market value; provided that any Designated Noncash Consideration consideration not constituting Replacement Assets received by the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed permitted to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the consummated under this paragraph shall constitute Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal subject to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness provisions of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed two preceding paragraphs. Each Net Proceeds Offer shall be mailed to the Company or an Affiliate record Holders as shown on the register of Holders within 30 days following the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not Offer Trigger Date, with a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed copy to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b)Trustee, and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance comply with the procedures set forth in this Indenture Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 in exchange for cash. To the agreements governing extent Holders properly tender Notes in an amount exceeding the Pari Passu IndebtednessNet Proceeds Offer Amount, Notes of tendering Holders shall be purchased on a pro rata basis (based on amounts tendered) unless otherwise required by law or any applicable exchange regulations. A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as applicable.
(e) may be required by law. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the aggregate amount provisions of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsany securities laws or regulations or any applicable exchange regulations conflict with this Section 4.15, the Company may use any remaining Excess Proceeds for any purpose shall comply with the applicable securities laws and regulations and exchange regulations and shall not prohibited be deemed to have breached its obligations under this Section 4.15 by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerovirtue thereof.
Appears in 1 contract
Samples: Indenture (Penhall Co)
Limitation on Asset Sales. The Company will not, and will not permit any Restricted Subsidiary to, make any Asset Sale unless the following conditions are met:
(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any the Asset Sale unless:is for at least Fair Market Value.
(1) the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2b) at least 75.075% of the consideration from such Asset Sale received by the Company or such its Restricted SubsidiarySubsidiaries consists of cash, as the case may be, is in the form of cash Cash Equivalents or Cash Equivalents; provided, however, Additional Assets (provided that to the extent that the subject assets sold in such Asset Sale were part of the constituted Notes Priority Collateral, the assets received as non-cash consideration substantially all of such Additional Assets shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. constitute Notes Priority Collateral); For purposes of this clause (2) b), each of the amount offollowing shall be considered cash or Cash Equivalents:
(Ai) any the assumption by the purchaser of Indebtedness or other obligations or liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred footnotes thereto) (other than Subordinated Indebtedness or accrued subsequent other obligations or liabilities subordinated in right of payment to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the CompanyNotes) of the Company or any a Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases operation of law or indemnifies a customary novation agreement; and
(ii) instruments, notes, securities or other obligations received by the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee the purchaser that are promptly, but in any event within 90 days of the closing, converted by the Company or such Restricted Subsidiary into to cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents actually so received), in each case within 180 days following the receipt thereof; and.
(Cc) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of Within 360 days after the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be any Net Cash Equivalents.
(b) Within 365 days after the Company’s Proceeds from an Asset Sale or any Restricted Subsidiary’s receipt Net Loss Proceeds from an Event of Loss, the Net Cash Proceeds of any Asset Saleor Net Loss Proceeds, the Company or a Restricted Subsidiary, at its optionas applicable, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as followsbe used:
(1i) if to the extent such Net Cash Proceeds are or Net Loss Proceeds, as applicable, constitute proceeds from an Asset Sale that is not a disposition of ABL Priority Collateral, to repay, prepay, defease, redeem, reduce, purchase repay permanently any Indebtedness under the Credit Agreement or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (any other than any Disqualified Stock or Subordinated Obligations) Credit Facility that is secured by a Lien Liens on assets that do not constitute a part of ABL Priority Collateral with the Collateral (other than Indebtedness owed to an Affiliate of priority set forth in the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured Intercreditor Agreement then outstanding as required by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company)terms thereof;
(2ii) if such Net Cash Proceeds are from an Asset Sale that is not to acquire (or enter into a disposition legally binding agreement to acquire), all or substantially all of Collateralthe assets of, or a majority of the Voting Stock of, a Permitted Business (or in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiaryof ABL Priority Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary acquire additional Collateral); provided that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases Net Cash Proceeds or Net Loss Proceeds are at received in respect of Notes Priority Collateral, such Net Cash Proceeds or above 100.0% Net Loss Proceeds, as applicable, are applied to acquire assets substantially all of the principal amount thereof), or which constitute Notes Priority Collateral;
(iii) making an offer to make capital expenditures; provided that to the extent such Net Cash Proceeds or Net Loss Proceeds are received in respect of Notes Priority Collateral, such expenditures shall relate to Notes Priority Collateral; or
(in accordance with the procedures set forth below for an Asset Sale Offeriv) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with invest the Net Cash Proceeds of or Net Loss Proceeds (or enter into a disposition shall not be Excluded Assets and are required legally binding agreement to be pledged as Collateral pursuant invest) in Additional Assets; provided that to the Security Documents reasonably promptly after receipt by the Company extent such Net Cash Proceeds or a Restricted Subsidiary thereof;
(5) Net Loss Proceeds are received in respect of Notes Priority Collateral, substantially all of such Additional Assets constitute Notes Priority Collateral. A binding commitment to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject acquisition referred to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4ii) or (5iv) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or shall be treated as a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all permitted application of the Net Cash Proceeds or Net Loss Proceeds from the date of any Asset Sales by a foreign Subsidiary such commitment; provided that (x) such investment is prohibited or delayed by applicable local law or consummated within 180 days of the end of the 360-day period referred to in the first sentence of this clause (c), and (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized if such acquisition is not consummated within the period set forth in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause subclause (x) of this paragraph shall apply to or such amounts so longbinding commitment is terminated, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds or Net Loss Proceeds not so applied will be deemed to be Excess Proceeds (as defined below). For the avoidance of doubt, pending application thereof in accordance with this Section 4.09, the Company or any Restricted Subsidiary may be repatriated use any Net Cash Proceeds from an Asset Sale or Net Loss Proceeds for general corporate purposes (whether or not such repatriation actually occursincluding a reduction in borrowings under any revolving credit facility) prior to the end of the 360-day period referred to in the first sentence of this clause (c).
(d) Pending the final application The Net Cash Proceeds of an Asset Sale and any such Net Loss Proceeds, as applicable, not applied pursuant to clause (c) within 360 days of receipt of Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested Loss Proceeds, as provided and within the time period set forth in Section 4.10(b) will be deemed to applicable, constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be .” Excess Proceeds without regard to the extent to which such offer is accepted by the Holdersof less than $15.0 million will be carried forward and accumulated. When the aggregate amount of the accumulated Excess Proceeds equals or exceeds $50.0 millionsuch amount, the Company will be required to must, within 30 days, make an offer (“Asset Sale Offer”) Offer to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), Purchase in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount Section 3.02 to all Holders of Notes equal to the accumulated Excess Proceeds. The purchase price for the Notes will be 100% of the principal amount plus accrued interest to the date of purchase. If the Offer to Purchase is for less than all of the outstanding Notes and Pari Passu Indebtedness so properly Notes in an aggregate principal amount in excess of the purchase amount are tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsoffer, the Company may use any remaining will purchase Notes having an aggregate principal amount equal to the purchase amount on a pro rata basis, with adjustments so that only Notes in multiples of $1,000 principal amount (and in a minimum amount of $2,000) will be purchased. Upon completion of the Offer to Purchase, Excess Proceeds will be reset at zero, and any Excess Proceeds remaining after consummation of the Offer to Purchase may be used for any purpose not otherwise prohibited by this the Indenture. If the aggregate principal amount The Company shall determine in good faith whether, and to what extent, an Asset Sale or an Event of Loss is in respect of Notes surrendered by Holders thereof Priority Collateral and other Pari Passu Indebtedness surrendered by Holders to what extent the Net Cash Proceeds in respect of an Asset Sale or lenders, collectively, exceeds the amount of Excess Net Loss Proceeds, selection as applicable, of Notes for purchase will be made by Priority Collateral are used to acquire or are invested in Notes Priority Collateral taking into account all relevant factors, including, without limitation, the Company in accordance with Section 3.04(f). Upon completion existence of structurally senior claims against the Notes Priority Collateral and the assets of an entity whose Capital Stock is subject to such Asset Sale Offeror acquired with such Net Cash Proceeds or is the subject of the Event of Loss. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the purchase of the Notes pursuant to an Offer to Purchase pursuant to this Section 4.09. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions in this Indenture, the amount Company will comply with the applicable securities laws and regulations and will not be deemed to have breached their obligations under this Section 4.09 by virtue of Excess Proceeds shall be reset at zerosuch conflict or compliance.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such (as determined in good faith by senior management or, in the case of an Asset SaleSale in excess of $5 million, by the Company's Board of Directors); and
(2ii) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or Cash EquivalentsEquivalents and is received at the time of such disposition; provided, however, to the extent provided that the assets sold in such Asset Sale were part amount of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(Aa) any liabilities (as -------- shown on the Company’s 's or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
and (Bb) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents within 180 days after such Asset Sale (to the extent of the cash received) shall be deemed to be cash for the purposes of this provision; and (iii) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Equivalents receivedProceeds relating to such Asset Sale within 360 days of receipt thereof either (A) to prepay any Senior Debt or Guarantor Senior Debt and, in the case of any Senior Debt or Guarantor Senior Debt under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility, (B) to make an Investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in the business of the company and its Restricted Subsidiaries as existing on the Issue Date or in business reasonably related, complementary or ancillary thereto or a reasonable expansion thereof ("Replacement Assets"), ------------------ and/or (C) a combination of prepayment and investment permitted by the foregoing clauses (iii) (A) and (iii) (B). On the 361st day after an Asset Sale or such earlier date, if any, as the senior management or Board of Directors, as the case may be, of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii) (A), (iii) (B) and (iii) (C) of the next preceding sentence (each, a "Net --- Proceeds Offer Trigger Date"), such aggregate amount of Net Proceeds Offer --------------------------- which have been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (iii) (A), (iii) (B) and (iii) (C) of the nest preceding sentence (each case within 180 a "Net Proceeds Offer Amount") shall be applied by the Company or ------------------------- such Restricted Subsidiary to make an offer to purchase (the "Net Proceeds ------------ Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor ----- ------------------------------- more than 60 days following the receipt thereofapplication Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Securities equal to the Net --- ---- Proceeds Offer Amount at a price equal to 100% of the principal amount of the Securities to be purchased, plus accrued and unpaid interest thereon, if any,to the date of purchase; provided, however, that if at any time any non-cash -------- ------- consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net cash Proceeds thereof shall be applied in accordance with this Section 4.16. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to this paragraph). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.16, and shall comply with the provisions of this Section 4.16 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.16. Notwithstanding the first two paragraphs of this Section 4.16, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent:
(1) at least 75% of the consideration for such Asset Sale constitutes Replacement Assets; and
(C2) such Asset Sale is for fair market value; provided that any Designated Noncash Consideration consideration not constituting Replacement Assets received by -------- the Company or any of its Restricted Subsidiaries in such connection with any Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the first two paragraphs of this Section 4.16. Notice of each Net Proceeds Offer pursuant to this subclause Section 4.16 shall be mailed or caused to be mailed, by first class mail, by the Company within 30 days following the applicable Net Proceeds Offer Trigger Date to all Holders at their last registered addresses, with a copy to the Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days or such longer period as may be required by law. The notice shall contain all instructions and materials necessary to enable such Holders to tender Securities pursuant to the Net Proceeds Offer and shall state the following terms:
(C1) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds Offer is being made pursuant to this Section 4.16 and that all Securities tendered will be accepted for payment; provided, however, that if the principal amount of any Asset SaleSecurities tendered in -------- ------- the Net Proceeds Offer exceeds the aggregate amount of Net Proceeds Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis;
(2) the purchase price (including the amount of accrued interest, if any) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by applicable law);
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any Security accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date;
(5) that Holders electing to have a Security purchased pursuant to the Net Proceeds Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the Net Proceeds Offer Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Net Proceeds Offer Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security the Holder delivered for purchase and a Restricted Subsidiarystatement that such Holder is withdrawing his election to have such Security purchased; and
(7) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Net Proceeds Offer Payment Date, at its optionthe Company shall (i) accept for payment Securities or portions thereof tendered pursuant to the Net Proceeds Offer, may apply (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers' Certificate stating the Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Securities so accepted payment in an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereofprice, plus the amount of accrued but unpaid interest, if any, on thereon set forth in the amount notice of Notes that would otherwise such Net Proceeds Offer. Any Security not so accepted shall be prepaid;
(4) promptly mailed by the Company to make an investment inthe Holder thereof. For purposes of this Section 4.16, the Trustee shall act as the Paying Agent. Any amounts remaining after the purchase or otherwise acquire of Securities pursuant to a Net Proceeds Offer shall be returned by the Trustee to the Company. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or securities laws and regulations thereunder to make payments (including without limitation prepayments the extent such laws and progress payments) regulations are applicable in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form repurchase of Securities pursuant to a Net Proceeds Offer. To the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, extent that the assets acquired with the Net Cash Proceeds provisions of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company any securities laws or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied regulations conflict with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds4.16, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance shall comply with the provision described in clause (4) or (5) of this Section 4.10(b), applicable securities laws and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required regulations and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted have breached its obligations under this Section 4.16 by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicablevirtue thereof.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Samples: Indenture (Encompass Services Corp)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale Sale, unless:
(1) the Company or any of its such Restricted SubsidiariesSubsidiary, as the case may be, receives consideration from such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of or Capital Interests issued or sold (as in each case, such Fair Market Value to be determined at by the time Company on the date of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale); and
(2) except in the case of a Permitted Asset Swap, at least 75.075% of the consideration from such Asset Sale therefor received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Eligible Cash Equivalents; provided, however, to the extent provided that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration following shall not be Excluded Assets and are required deemed to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For cash for purposes of this clause (2Section 4.10(a)(2) the amount ofand for no other purpose:
(A) any liabilities (as shown on reflected in the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date orfootnotes thereto, or if incurred Incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected shown on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes footnotes thereto if such incurrence Incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of sheet, as determined by the Company) of the Company or any such Restricted Subsidiary (Subsidiary, other than liabilities that are by their terms subordinated to the Notes, (i) that are extinguished for which the Company and all of its Restricted Subsidiaries have been validly released by all creditors in connection with writing or (ii) in respect of which neither the transactions relating to Company nor any Restricted Subsidiary following such Asset Sale, or that are assumed by the transferee of Sale has any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;obligation,
(B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case ) within 180 365 days following the receipt thereof; closing of such Asset Sale, and
(C) any Designated Noncash Non-cash Consideration received by the Company or any of its such Restricted Subsidiaries Subsidiary in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Non-cash Consideration received pursuant to this subclause clause (C) that is at that time outstanding, not to exceed 2.0no greater than 5.0% of Total Assets, calculated Assets of the Company and its Subsidiaries at the time of the receipt of such Designated Noncash Consideration (Non-cash Consideration, with the Fair Market Value of each item of Designated Noncash Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the any Net Cash Proceeds of any Asset Sale, the Company or a such Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (Sale, or any portion thereof) as follows:other funds,
(1) if such Net Cash Proceeds are from an Asset Sale to permanently reduce:
(A) obligations under Credit Facilities, or under any senior Debt that is not a disposition of CollateralSecured Debt (and, to repaythe extent the obligations being reduced constitute revolving credit obligations, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): thereto); or
(xB) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness Debt of a Restricted Subsidiary (that is not a Guarantor, other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness Debt owed to the Company or an Affiliate of the Company)another Restricted Subsidiary;
(2) if such Net Cash Proceeds are from to make an Asset Sale Offer; or
(3) to make any combination of (A) an Investment in all or substantially all of the assets of one or more businesses, (B) an Investment in the Capital Interests of one or more businesses, provided that such business is not a disposition Restricted Subsidiary or such Investment results in such business becoming a Restricted Subsidiary, (C) capital expenditures or (D) acquisitions of Collateralother assets, in each of (A) through (D), that are used or useful in a Permitted Business or replace the businesses, properties and/or assets that are the subject of such Asset Sale; provided that, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
this clause (3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and a binding commitment (which may be subject to customary conditions) shall be treated as a permitted application of funds from the date of such commitment so long as the Company or such other Restricted Subsidiary enters into such commitment with the good faith expectation that investment, purchase or other acquisition is thereafter completed such funds will be applied to satisfy such commitment within 180 days after the end of such the 365-day periodperiod described above (an “Acceptable Commitment”); provided further, that if any Acceptable Commitment is later cancelled or terminated for any reason before such funds are so applied, then, to the extent the 365-day period referred to in the first sentence of this paragraph has lapsed, such unapplied amount shall constitute Excess Proceeds (as defined in clause (c) of this Section 4.10).
(c) Notwithstanding If the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not Sales exceeds the amount invested, expended or applied or invested as provided and within the time period periods set forth in clause (b) of this Section 4.10(b) 4.10, such excess amount will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. .” When the aggregate amount of Excess Proceeds exceeds $50.0 150.0 million, the Company will be required to shall make an offer to all Holders of the Notes, and, if required (or at the Company’s election, if permitted) by the terms of any other senior Debt, to the holders of any such senior Debt (an “Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale), to purchase the maximum aggregate principal amount of the Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies other senior Debt that is a minimum of $2,000 or an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds, Proceeds at an offer price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof, plus accrued and unpaid interest to (to, but not including) , the date of purchase (or such lesser price with respect to fixed for the Pari Passu Indebtedness, if any, as may be provided by the terms closing of such Indebtedness)offer, in accordance with the procedures set forth in this Indenture or Indenture. The Company will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the agreements governing date that Excess Proceeds exceed $150.0 million by sending the Pari Passu Indebtednessnotice required pursuant to the terms of this Indenture, as applicablewith a copy to the Trustee.
(ed) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly other senior Debt tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by general corporate purposes, subject to other covenants contained in this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered senior Debt tendered by Holders or lenders, collectively, such holders thereof exceeds the amount of Excess Proceeds, selection the Trustee shall select the Notes and the agent for such other senior Debt, as applicable, shall select such other senior Debt to be purchased by lot, pro rata or by any other method customarily authorized by clearing systems (so long as an authorized denomination results therefrom) based on the accreted value or principal amount of the Notes for purchase will be made by or such other senior Debt tendered. Additionally, the Company may, at its option, make an Asset Sale Offer using funds in accordance with Section 3.04(f)an amount equal to the amount of Net Proceeds from any Asset Sale at any time after consummation of such Asset Sale; provided that such Asset Sale Offer shall be in an aggregate amount of not less than $10.0 million. Upon completion of such any Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
(e) Pending the final application of any Net Proceeds pursuant to this Section 4.10, the holder of such Net Proceeds may apply such Net Proceeds temporarily to reduce Debt outstanding under a revolving credit facility or otherwise invest such Net Proceeds in any manner not prohibited by this Indenture.
(f) Notwithstanding anything to the contrary in this Section 4.10, all references herein to “Net Proceeds” and “Excess Proceeds” shall be deemed to mean cash in an amount equal to the amount of Net Proceeds or Excess Proceeds, as applicable, but not necessarily the actual cash received from the relevant Asset Sale. The Company and its Subsidiaries shall have no obligation to segregate, trace or otherwise identify Net Proceeds or Excess Proceeds (other than the amounts thereof), it being agreed that cash is fungible and that the Company’s obligations under this Section 4.10 may be satisfied by the application of funds from other sources.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company’s Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or cash, Cash EquivalentsEquivalents and/or Replacement Assets (as defined below) and is received at the time of such disposition; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:provided that
(A) the amount of any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated in right of payment to the NotesNotes or any Guarantee of a Guarantor) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;; and
(B) the fair market value of any securities, notes or other obligations securities or other assets or property received by the Company or any such Restricted Subsidiary from in exchange for any such transferee assets that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), within 180 days after such Asset Sale; in each case within 180 days following the receipt thereofshall be deemed to be cash for purposes of this provision; and
(C3) any Designated Noncash Consideration received by upon the Company or any consummation of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company shall apply, or a cause such Restricted SubsidiarySubsidiary to apply, at its option, may apply an amount equal to the Net Cash Proceeds from relating to such Asset Sale (or any portion thereof) as followswithin 365 days of receipt thereof either:
(1a) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly permanently reduce commitments with respect thereto in Indebtedness under the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of CollateralABL Facility; and, in the case of an Asset Sale by any such Indebtedness under any revolving credit facility, effect a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto permanent reduction in the case of availability under such revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiarycredit facility;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4b) to make an investment in, purchase or otherwise acquire any one or more businesses, in properties and assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress paymentsCapital Stock) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, properties and assets and/or properties that are were the subject to of such Asset Sale; provided, Sale or in properties and assets that will be used in the assets acquired with the Net Cash Proceeds business of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with as existing on the provisions described Issue Date or in clause businesses reasonably related thereto (4“Replacement Assets”); and/or
(c) or a combination of prepayment and investment permitted by the foregoing clauses (53)(a) of this Section 4.10(band (3)(b).
(b) if and to Pending the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt final application of such Net Cash Proceeds, the Company may temporarily reduce borrowings under the ABL Facility or a Restricted Subsidiaryany other revolving credit facility. On the 366th day after an Asset Sale or such earlier date, if any, as applicable, has entered into and not abandoned the Board of Directors of the Company or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, Restricted Subsidiary determines not to the extent that repatriation to the United States of any or all of apply the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply relating to such amounts so long, but only so long, Asset Sale as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until clauses (3)(a), (3)(b) and (3)(c) of the preceding paragraph (each, a “Net Proceeds Offer Trigger Date”), such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is which have not been applied on or invested before such Net Proceeds Offer Trigger Date as provided permitted in clauses (3)(a), (3)(b) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (33)(c) of Section 4.10(bthe preceding paragraph (each a “Net Proceeds Offer Amount”) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required or such Restricted Subsidiary to make an offer to purchase (the “Asset Sale Net Proceeds Offer”) to all Holders of Notes and, to the extent required by the terms of other any Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with Indebtedness, on a date (the proceeds “Net Proceeds Offer Payment Date”) not less than 30 nor more than 60 days following the applicable Net Proceeds Offer Trigger Date, from any Asset Sale, to purchase the maximum principal amount all Holders (and holders of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies Indebtedness) on a pro rata basis, that may be purchased out amount of the Excess Proceeds, at an offer price in cash in an amount Notes (and Pari Passu Indebtedness) equal to 100.0the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes (and Pari Passu Indebtedness Indebtedness) to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided to the date of purchase; provided, however, that if at any time any non-cash consideration received by the terms Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such Indebtednessnon-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicablecovenant.
(ec) To The Company may defer the extent that Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $7.5 million resulting from one or more Asset Sales (at which time, the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered entire unutilized Net Proceeds Offer Amount, and not withdrawn just the amount in excess of $7.5 million, shall be applied as required pursuant to this paragraph).
(d) In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.1, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale Offer is less than the Excess ProceedsSale. In addition, the fair market value of such properties and assets of the Company may use any remaining Excess or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for any purpose not prohibited by purposes of this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerocovenant.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
: (1i) the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, Property or assets or property sold or otherwise disposed of pursuant to such Asset Saleof; and
(2ii) at least 75.085% of the consideration from such Asset Sale received by the Company for such Property or such Restricted Subsidiary, as the case may be, is in the form assets consists of cash or Eligible Cash Equivalents; provided. The amount of any liabilities, howeveras shown on the Company's most recent balance sheet, of the Company (other than contingent liabilities and liabilities that are by their terms subordinate to the extent Notes) that are assumed or forgiven by the transferee of any such assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not will be Excluded Assets and are required deemed to be pledged as Collateral pursuant to cash for the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2ii); and (iii) the amount of:
(A) any liabilities (as shown on Net Cash Proceeds received by the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements Company are available immediately preceding such date orapplied, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of extent the Company or any Restricted Subsidiary elects or is required, either: (other than liabilities that are by their terms subordinated A) to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, repay or that are assumed by the transferee purchase and permanently reduce outstanding Debt of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly permanently reduce any commitments with in respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, furtherhowever, that such repayment and commitment reduction occurs within 270 days following the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds; or (B) to an investment in Replacement Assets; provided, however, that such investment occurs or the Company or a such Restricted Subsidiary, as applicable, has entered Subsidiary enters into and not abandoned or rejected a binding agreement contractual commitments to make an such investment, purchase or subject only to customary conditions (other acquisition in compliance with than the provision described in clause (4) or (5) obtaining of this Section 4.10(bfinancing), and that investment, purchase on or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, prior to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion 270th day following receipt of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under contractually committed are so applied within 365 days following the applicable local law receipt of such Net Cash Proceeds. Notwithstanding any provision of this Section 4.9, Asset Swaps and is Fuel Hedging Obligations entered into in the ordinary course of business shall not be subject to clause (yii) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs)immediately preceding sentence.
(db) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is are not applied used to reinvest in Replacement Assets and/or repay Debt of the Company or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to any Restricted Subsidiary shall constitute “"Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause ."
(3c) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million10,000,000, the Company will be required to shall make an offer Offer to Purchase from all Holders, Notes (“Asset Sale Offer”i) having an aggregate Accreted Value as of the Purchase Date, if the Purchase Date is on or prior to all Holders of Notes andApril 30, to the extent required by the terms of other Pari Passu Indebtedness2009, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company or (or the Subsidiary Guarantor, as applicableii) to make in an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum aggregate principal amount of Notes and any such Pari Passu Indebtedness at Stated Maturity, if the Purchase Date is on or after May 1, 2009, in either case, equal to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price a Purchase Price in cash in an amount equal to: (x) 100% of the Accreted Value thereof, together with accrued interest, if any, to 100.0the Purchase Date if the Purchase Date is on or prior to April 30, 2009, or (y) 100% of the principal amount of the Notes and Pari Passu Indebtedness plus thereof, together with accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessinterest, if any, as may be provided by to the terms of such Indebtedness)Purchase Date, in accordance with if the procedures set forth in this Indenture Purchase Date is on or the agreements governing the Pari Passu Indebtednessafter May 1, as applicable2009.
(ed) To the extent that If the aggregate amount Purchase Price of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant surrendered by Holders exceeds the amount equal to an Asset Sale Offer is less than the Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis. If any amount of Excess Proceeds remains after completion of such Offer to Purchase, the Company may use any such remaining Excess Proceeds amount for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof general corporate purposes, and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at to zero.
(e) On or before the Purchase Date, the Trustee shall, to the extent lawful, accept for payment, on a pro rata basis or by such other method as the Trustee shall deem fair and appropriate to the extent necessary, Notes or portions thereof or beneficial interests under a Global Note properly tendered pursuant to the Offer to Purchase, deposit with the Paying Agent U.S. legal tender sufficient to pay the purchase price plus accrued interest, if any, on the Notes to be purchased and deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Issuers in accordance with the terms of this Section 4.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries to, consummate any an Asset Sale unless:
(1) the Company or any of its the applicable Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and(as determined in good faith by the Company's Board of Directors);
(2) at least 75.075% of the consideration from such Asset Sale received by the Company or such the Restricted Subsidiary, as the case may be, is from such Asset Sale shall be in the form of cash or cash, Cash Equivalents; provided, however, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Equivalents and/or Replacement Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company (or a Restricted Subsidiary combination thereof). For purposes of this clause (2) provision, each of the amount offollowing will be deemed to be cash:
(A) any liabilities (liabilities, as shown on the Company’s or such Restricted Subsidiary’s 's most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such consolidated balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, assets pursuant to an agreement that releases the Company or indemnifies such Restricted Subsidiary from further liability or with respect to which the transferee has granted a full and complete indemnity to the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;; and
(B) any securities, notes or other obligations or other assets or property received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalentscash, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received)received in that conversion, in each case within 180 days following the receipt thereofafter receipt; and
(C3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 365 days of receipt thereof either:
(A) in the case of any Designated Noncash Consideration received by disposition of Collateral constituting an Asset Sale during any First Priority Period,
(i) to make an investment in Replacement Assets; provided that the Company or such Guarantor, as the case may be, shall execute and deliver to the Trustee such Security Documents or other instruments as shall be reasonably necessary to cause such property or assets to become subject to the Lien of the applicable Security Documents;
(ii) to make capital expenditures in any Permitted Business; provided that, to the extent it constitutes Collateral, the Company or such Guarantor, as the case may be, shall execute and deliver to the Trustee such Security Documents or other instruments as shall be reasonably necessary to cause such property or assets to become subject to the Lien of its Restricted Subsidiaries the applicable Security Documents;
(iii) to make Investments in such Permitted Joint Ventures; and
(iv) a combination of investment and expenditures permitted by the foregoing clauses (i) through (iii); or
(B) in the case of any Asset Sale having an aggregate Fair Market Valueother than a disposition of Collateral during any First Priority Period, taken together with all or in the case of any Asset Sale at any other Designated Noncash Consideration received pursuant time,
(i) to this subclause repay any Indebtedness under any Credit Facility and, in the case of any such Indebtedness repaid under a revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility to the extent that such Net Cash Proceeds are not reborrowed and applied as contemplated by any other clause hereof within such 365-day period;
(Cii) to repay (or repurchase) any secured Indebtedness;
(iii) to repay (or repurchase) any Indebtedness of a Restricted Subsidiary that is at not a Guarantor;
(iv) to repay (or repurchase) any Indebtedness with a final Stated Maturity that time outstanding, not is prior to exceed 2.0% of Total Assets, calculated at the time final Stated Maturity of the receipt Notes;
(v) to make a capital expenditure;
(vi) to acquire other long-term assets that are used or useful in a Permitted Business;
(vii) to acquire all or substantially all of such Designated Noncash Consideration the assets of, or a majority of the Voting Stock, of a Permitted Business (with the Fair Market Value including by means of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in valuea merger, consolidation or other business combination permitted under this Indenture); shall each be deemed to be Cash Equivalentsor
(viii) a combination of prepayment and investment permitted by the foregoing clauses (i) through (vii).
(b) Within 365 days If on the 366th day after an Asset Sale the Company’s Company has not applied or any Restricted Subsidiary’s receipt of invested the Net Cash Proceeds of any Asset Sale, the Company or a Restricted Subsidiary, at its option, may apply an amount equal relating to the Net Cash Proceeds from such Asset Sale as set forth in clauses (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes3)(A) and (y3)(B) the Notes by, at its option of paragraph (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5a) of this Section 4.10(b) if and to the extent that4.10 (each, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such a "Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(bProceeds Offer Trigger Date"), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any aggregate amount of Net Cash Proceeds from any Asset Sale that is which has not been applied or invested on or before such Net Proceeds Offer Trigger Date as provided permitted in clauses (3)(A) and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (33)(B) of paragraph (a) of this Section 4.10(b4.10 (each a "Net Proceeds Offer Amount") or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer to purchase (“Asset Sale the "Net Proceeds Offer”") pursuant to Section 3.10 and this Section 4.10 to all Holders of Notes and, to at the extent required by the terms of other Pari Passu IndebtednessCompany's option, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness that is pari passu with the proceeds Notes from any Asset Saleall Holders pro rata, to purchase the maximum principal amount of Notes and any such Pari Passu other pari passu Indebtedness equal to which the Asset Sale Net Proceeds Offer applies that may be purchased out of Amount with respect to the Excess ProceedsNotes, at an offer a price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness to be purchased, plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may to the Purchase Date. Pending application -55- of the Net Cash Proceeds, the Net Cash Proceeds from Asset Sales of Collateral during any First Priority Period shall be provided deposited in the Collateral Account to the extent one is required by Section 12.1.
(c) If at any time any non-cash consideration received by the terms Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than contemplated by clause (2)(B) above and other than interest received with respect to any such Indebtednessnon-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with the procedures set forth this Section 4.10.
(d) Notwithstanding anything in this Indenture Section 4.10 to the contrary, the Company shall have no obligation to make a Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the agreements governing entire unutilized Net Proceeds Offer Amount, and not just the Pari Passu Indebtednessamount in excess of $10.0 million, shall be applied as applicablerequired pursuant to this Section).
(e) In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.1, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section, and shall comply with the provisions of this Section with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section.
(f) If any Net Proceeds remain after consummation of a Net Proceeds Offer, the Company may use those proceeds for any purpose not otherwise prohibited by this Indenture. Upon completion of each Net Proceeds Offer, the Net Proceeds Offer Amount will be reset at zero.
(g) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the aggregate amount provisions of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsany securities laws or regulations conflict with this Section 4.10 or Section 3.10, the Company may use any remaining Excess Proceeds for any purpose shall comply with the applicable securities laws and regulations and shall not prohibited be deemed to have breached its obligations under this Section 4.10 or Section 3.10 by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerovirtue thereof.
Appears in 1 contract
Samples: Indenture (Dan River Inc /Ga/)
Limitation on Asset Sales. (a) The Company shall will not, and shall will not permit any of its Restricted Subsidiaries Subsidiary to, consummate any Asset Sale unless:
(1) the Company or any of its such Restricted SubsidiariesSubsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or and property sold or otherwise disposed of pursuant subject to such Asset Sale; and
(2) at least 75.0% all of the consideration from such Asset Sale received by paid to the Company or such Restricted Subsidiary, as the case may be, Subsidiary in connection with such Asset Sale is in the form of cash or cash, Cash Equivalents; provided, howeverLiquid Securities, to Exchanged Properties or the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt assumption by the Company or a Restricted Subsidiary thereof. For purposes purchaser of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities of the Company that are by their terms subordinated to the Notes) or liabilities of any Subsidiary Guarantor that made such Asset Sale (other than liabilities of a Subsidiary Guarantor that are extinguished in connection with the transactions relating by their terms subordinated to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital StockSubsidiary Guarantor’s Subsidiary Guarantee), in each casecase as a result of which the Company and its remaining Restricted Subsidiaries are no longer liable for such liabilities (the “Permitted Consideration”); provided that the Company and its Restricted Subsidiaries shall be permitted to receive assets and property other than Permitted Consideration, pursuant to an agreement that releases so long as the aggregate Fair Market Value of all such assets and property other than Permitted Consideration received from Asset Sales since the Issue Date and held by the Company or indemnifies any Restricted Subsidiary at any one time shall not exceed 10% of Adjusted Consolidated Net Tangible Assets.
(b) The Net Available Cash from Asset Sales by the Company or a Restricted Subsidiary may be applied by the Company or such Restricted Subsidiary, as to the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from such transferee that are converted by extent the Company or such Restricted Subsidiary into cash elects (or Cash Equivalents, or by their terms are is required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause (C) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds terms of any Asset Sale, Senior Indebtedness of the Company or a Restricted Subsidiary), at its option, may apply an amount equal to the Net Cash Proceeds from such Asset Sale (or any portion thereof) as follows:to
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition purchase, repay or prepay Pari Passu Obligations or other Indebtedness of Collateralthe Company or any Subsidiary Guarantor secured by Permitted Collateral Liens (and, to repaythe extent required pursuant to the terms of the Revolving Credit Agreement (as in effect on the Issue Date) in the case of revolving obligations, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Companythereto);; or
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, reinvest in the case Additional Assets (including by means of an Asset Sale Investment in Additional Assets by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Available Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt received by the Company or a another Restricted Subsidiary thereof;
(5) to make an investment inSubsidiary); provided that if such Asset Sale includes Oil and Gas Properties or Proved and Probable Drilling Locations, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject after giving effect to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition is in compliance with the provision described in clause (4) or (5) Collateral requirements of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day periodIndenture.
(c) Notwithstanding the foregoing, to the extent that repatriation to the United States of any or all of the Any Net Available Cash Proceeds of any from an Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would Sale not otherwise be realized), as determined by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance accordance with this covenant; provided that clause (xb) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds Section 4.10 within 365 days from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicable.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.constitute “Excess
Appears in 1 contract
Samples: Indenture (Comstock Oil & Gas, LP)
Limitation on Asset Sales. (a) The Company shall Issuers will not, and shall will not permit any of its Restricted their Subsidiaries to, consummate any an Asset Sale unless:
unless (1i) the Company Issuers or any of its Restricted Subsidiariessuch applicable Subsidiary, as the case may be, receives consideration at the time of such sale or other disposition at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) fair market value of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale(as determined in good faith by the Board of Directors of the Company, and evidenced by a board resolution); and
(2ii) at least 75.0not less than 80% of the consideration from such Asset Sale received by the Company or such Restricted applicable Subsidiary, as the case may be, is in the form of cash or Cash EquivalentsEquivalents other than in the case where the Company is undertaking a Permitted Asset Swap; provided, howeverand (iii) the Asset Sale Proceeds received by the Company or such Subsidiary are applied (a) first, to the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof. For purposes of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) elects, or is required, to prepay, repay or purchase indebtedness under the Senior Credit Facility, the Subsidiary Senior Discount Notes and/or any securities, notes or other obligations or other assets or property received by Indebtedness of a Subsidiary of the Company or any Restricted Subsidiary from such transferee that are converted by incurred in compliance with the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case Indenture within 180 days following the receipt thereofof the Asset Sale Proceeds from any Asset Sale; and
PROVIDED that any such repayment shall result in a permanent reduction of the commitments thereunder in an amount equal to the principal amount so repaid; (Cb) any Designated Noncash Consideration received by second, to the extent of the balance of Asset Sale Proceeds after application as described above, to the extent the Company elects, to an investment in assets (including Capital Stock or other securities purchased in connection with the acquisition of Capital Stock or property of another Person) used or useful in businesses similar or ancillary to the business of the Company or any such Subsidiary as conducted on the Issue Date; PROVIDED that (1) such investment occurs or the Company or any such Subsidiary enters into contractual commitments to make such investment, subject only to customary conditions (other than the obtaining of its Restricted Subsidiaries in financing), within 180 days following receipt of such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this subclause Proceeds and (C2) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of Asset Sale Proceeds so contractually committed are so applied within 270 days following the receipt of such Designated Noncash Consideration Asset Sale Proceeds; and (c) third, if on such 180th day in the case of clauses (iii)(a) and (iii)(b)(1) or on such 270th day in the case of clause (iii)(b)(2) with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect respect to subsequent changes in value); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any Asset Sale, the Available Asset Sale Proceeds exceed $5 million, the Company or a Restricted Subsidiary, at its option, may shall apply an amount equal to the Net Cash Proceeds from such Available Asset Sale (or any portion thereof) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness of the Company (other than any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of offer to repurchase the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to the Company or an Affiliate of the Company);
(2) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, in the case of an Asset Sale by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes bySecurities, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (a purchase price in cash equal to the extent such purchases are at or above 100.0100% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, Accreted Value thereof plus the amount of accrued but and unpaid interest, if any, to the purchase date (an "EXCESS PROCEEDS OFFER"). If an Excess Proceeds Offer is not fully subscribed, the Company may retain the portion of the Available Asset Sale Proceeds not required to repurchase Securities. If the Issuers are required to make an Excess Proceeds Offer, the Issuers shall mail, within 30 days following the date specified in clause (iii)(c) above, a notice to the holders stating, among other things:
(1) that such holders have the right to require the Issuers to apply the Available Asset Sale Proceeds to repurchase such Securities at a purchase price in cash equal to (x) 100% of the Accreted Value thereof, if the applicable purchase date is on or prior to September 30, 2002, or (y) 100% of the principal amount of Notes at maturity thereof, plus accrued and unpaid interest, if any, to the purchase date, if the purchase date is after September 30, 2002;
(2) the purchase date, which shall be no earlier than 30 days and not later than 45 days from the date such notice is mailed;
(3) the instructions that would otherwise be prepaideach holder must follow in order to have such Securities purchased;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, the calculations used in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in determining the form amount of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Cash Available Asset Sale Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant applied to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereofpurchase of such Securities;
(5) to make an investment inthat if the Accreted Value of Securities tendered in the Asset Sale Offer exceeds the aggregate amount of Available Asset Sale Proceeds, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are Issuers shall select the subject to such Asset Sale; provided, that the assets acquired with the Net Cash Proceeds of a disposition shall not be Excluded Assets and are required Securities to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt by the Company or purchased on a Restricted Subsidiary thereof; orpro rata basis;
(6) that any combination Security not tendered will continue to accrete Accreted Value and accrue interest;
(7) that, unless the Issuers default in making payment therefor, any Security accepted for payment pursuant to the Asset Sale Offer shall cease to accrete Accreted Value and accrue interest after the purchase date;
(8) that Holders electing to have a Security purchased pursuant to the Asset Sale Offer will be required to surrender the Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceeds, the Company or a Restricted Subsidiary, as applicable, has entered into and not abandoned or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day period.
(c) Notwithstanding the foregoingSecurity completed, to the extent that repatriation Paying Agent at the address specified in the notice prior to the United States close of any business on the Asset Sale Offer purchase date;
(9) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Asset Sale Offer purchase date, a facsimile transmission or all letter setting forth the name of the Net Cash Proceeds Holder, the principal amount at maturity of any the Security the Holder delivered for purchase and a statement that such Holder is withdrawing his xxxxxxon to have such Security purchased; and
(10) that Holders whose Securities are purchased only in part will be issued new Securities in a principal amount at maturity equal to the unpurchased portion of the Securities surrendered. On or before the Asset Sales by a foreign Subsidiary Sale Offer purchase date, the Issuers shall (xi) is prohibited accept for payment Securities or delayed by applicable local law portions thereof tendered pursuant to the Asset Sale Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price, plus accrued interest, if any, of all Securities to be purchased and (iii) deliver to the Trustee Securities so accepted together with an Officers' Certificate stating the Securities or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined portions thereof being purchased by the Company in its sole discretion, the portion of such Net Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph Company. The Paying Agent shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation promptly mail to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation Holders of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, Securities so accepted payment in an amount equal to such Net Cash Proceeds will be promptly applied (net the purchase price, plus accrued interest, if any, thereon. For purposes of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant Section 4.13, the Trustee shall not start until such time act as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending Paying Agent. In the final application event of any such Net Cash Proceedsthe transfer of substantially all of the property and assets of the Issuers and their Subsidiaries as an entirety to a Person in a transaction permitted under Article Five, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale successor Person shall be deemed to have been applied sold the properties and assets of the Issuers and their Subsidiaries not so transferred for purposes of this covenant, and shall comply with the provisions of this covenant with respect to such deemed sale as required if it were an Asset Sale. The Issuers shall comply with all tender offer rules under state and federal securities laws, including, but not limited to, Section 14(e) under the Exchange Act and Rule l4e-1 thereunder, to the extent applicable to such offer. To the extent that the provisions of any securities laws or regulations conflict with the foregoing provisions of this Indenture, the Issuers shall comply with the applicable securities laws and regulations and shall not be deemed to be Excess Proceeds without regard to have breached its obligations under the extent to which such offer is accepted by the Holders. When the aggregate amount foregoing provisions of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale, to purchase the maximum principal amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, at an offer price in cash in an amount equal to 100.0% of the principal amount of the Notes and Pari Passu Indebtedness plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtedness, if any, as may be provided by the terms of such Indebtedness), in accordance with the procedures set forth in this Indenture or the agreements governing the Pari Passu Indebtedness, as applicableby virtue thereof.
(e) To the extent that the aggregate amount of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Appears in 1 contract
Limitation on Asset Sales. (a) The Company shall not, and shall not permit any of its Restricted Subsidiaries Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
unless (1a) the Company or any of its Restricted Subsidiaries, as the case may be, receives consideration at least equal to the Fair Market Value (as determined at the time of contractually agreeing to such Asset Sale) of the Capital Stock, assets or property sold or otherwise disposed of pursuant to such Asset Sale; and
(2) at least 75.0% of the consideration from such Asset Sale received by the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the Property subject to such Asset Sale; (b) at least 75% of the consideration paid to the Company or such Restricted Subsidiary in connection with such Asset Sale is in the form of cash or Cash Equivalents; provided, however, to cash equivalents or the extent that the assets sold in such Asset Sale were part of the Collateral, the assets received as non-cash consideration shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt assumption by the Company or a Restricted Subsidiary thereof. For purposes purchaser of this clause (2) the amount of:
(A) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto for which internal financial statements are available immediately preceding such date or, if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Company’s or such Restricted Subsidiary’s balance sheet or in the notes thereto if such incurrence or accrual had taken place on or prior to the date of such balance sheet in the good faith determination of the Company) of the Company or any Restricted Subsidiary (other than liabilities of the Company that are by their terms subordinated to the NotesSecurities) that are extinguished in connection with the transactions relating to such Asset Sale, or that are assumed by the transferee of any such assets, property or Capital Stock, in each case, pursuant to an agreement that releases or indemnifies the Company or such Restricted Subsidiary, as the case may be, from further liability therefor;
(B) any securities, notes or other obligations or other assets or property received by the Company or any Restricted Subsidiary from (including liabilities of a Restricted Subsidiary whose stock is acquired by such transferee that are converted by purchaser) as a result of which the Company or and the Restricted Subsidiaries are no longer liable for such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash or Cash Equivalents liabilities; and (c) the Company delivers an Officers' Certificate to the extent of the cash or Cash Equivalents received), in each case within 180 days following the receipt thereof; and
(C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in Trustee certifying that such Asset Sale having an aggregate Fair Market Value, taken together complies with all other Designated Noncash Consideration received pursuant to this subclause clauses (Ca) that is at that time outstanding, not to exceed 2.0% of Total Assets, calculated at the time of the receipt of such Designated Noncash Consideration and (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received without giving effect to subsequent changes in valueb); shall each be deemed to be Cash Equivalents.
(b) Within 365 days after the Company’s The Net Available Cash (or any Restricted Subsidiary’s receipt of the Net Cash Proceeds of any portion thereof) from Asset Sale, Sales may be applied by the Company or a Restricted Subsidiary, at its option, may apply an amount equal to the Net Cash Proceeds from extent the Company or such Asset Sale Restricted Subsidiary elects (or is required by the terms of any portion thereofDebt), (a) as follows:
(1) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateralto prepay, to repay, prepay, defease, redeem, reduce, legally defease or purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings): (x) Indebtedness Senior Debt of the Company (other than or Debt of any Disqualified Stock or Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness owed to an Affiliate of the Company) or (y) Indebtedness of a Restricted Subsidiary (other than any Disqualified Stock or Guarantor Subordinated Obligations) that is secured by a Lien on assets that do not constitute a part of the Collateral (other than Indebtedness excluding in each such case Debt owed to the Company or an Affiliate of the Company);
; or (2b) if such Net Cash Proceeds are from an Asset Sale that is not a disposition of Collateral, to reinvest in the case Additional Assets (including by means of an Asset Sale Investment in Additional Assets by a Restricted Subsidiary that is a Non-Guarantor Subsidiary, to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings) Indebtedness of such Restricted Subsidiary or any other Restricted Subsidiary that is a Non-Guarantor Subsidiary;
(3) to repay, prepay, defease, redeem, reduce, purchase or otherwise retire (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings other than commitments under the Revolving Facility), first, to repay outstanding borrowings under the Revolving Facility (without reducing commitments) and, thereafter on a pro rata basis: (x) Indebtedness or other Obligations under the Senior Credit Facilities and any Pari Passu Lien Obligations (other than Indebtedness owed to the Company or an Affiliate of the Company and the Notes) and (y) the Notes by, at its option (i) redeeming Notes as provided under Section 3.01, (ii) purchasing Notes through open market purchases (to the extent such purchases are at or above 100.0% of the principal amount thereof), or (iii) making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase their Notes at 100.0% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid;
(4) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets), properties or capital expenditures, in each case used or useful in a Similar Business or to make payments (including without limitation prepayments and progress payments) in connection with such investment, purchase or other acquisition; provided, that if such investment, purchase or acquisition is in the form of the acquisition of Capital Stock of a Person, such investment, purchase or acquisition results in such Person becoming a Restricted Subsidiary; provided, further, that the assets acquired with the Net Available Cash Proceeds of a disposition shall not be Excluded Assets and are required to be pledged as Collateral pursuant to the Security Documents reasonably promptly after receipt received by the Company or a another Restricted Subsidiary thereof;
(5) to make an investment in, purchase or otherwise acquire any one or more businesses, assets (other than working capital assets) or properties that replace the businesses, assets and/or properties that are the subject to such Asset SaleSubsidiary); provided, however, that the assets acquired in connection with the Net Cash Proceeds any prepayment, repayment, legal defeasance or purchase of a disposition shall not be Excluded Assets and are required to be pledged as Collateral Debt 53 45 pursuant to the Security Documents reasonably promptly after receipt by the Company or a Restricted Subsidiary thereof; or
(6) any combination of the foregoing, provided, that the Company and its Restricted Subsidiaries will be deemed to have complied with the provisions described in clause (4a) or (5) of this Section 4.10(b) if and to the extent that, within 365 days after the Company’s or any Restricted Subsidiary’s receipt of such Net Cash Proceedsabove, the Company or a such Restricted SubsidiarySubsidiary shall retire such Debt and shall cause the related loan commitment (if any) to be permanently reduced by an amount equal to the principal amount so prepaid, as applicablerepaid, has entered into and not abandoned legally defeased or rejected a binding agreement to make an investment, purchase or other acquisition in compliance with the provision described in clause (4) or (5) of this Section 4.10(b), and that investment, purchase or other acquisition is thereafter completed within 180 days after the end of such 365-day periodpurchased.
(c) Notwithstanding Any Net Available Cash from an Asset Sale not applied in accordance with the foregoing, to preceding paragraph within twelve months from the extent that repatriation to the United States of any or all date of the Net Cash Proceeds of any Asset Sales by a foreign Subsidiary (x) is prohibited or delayed by applicable local law or (y) would have a material adverse tax consequence (taking into account any foreign tax credit or other net benefit actually realized in connection with such repatriation that would not otherwise be realized), as determined by the Company in its sole discretion, the portion receipt of such Net Available Cash Proceeds so affected will not be required to be applied in compliance with this covenant; provided that clause (x) of this paragraph shall apply to such amounts so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Company hereby agreeing to use commercially reasonable efforts to cause the applicable foreign Subsidiary to take all actions reasonably required by the applicable local law, applicable organizational impediments or other impediment to permit such repatriation), and if such repatriation of any of such affected Net Cash Proceeds is permitted under the applicable local law and is not subject to clause (y) of this paragraph, then, an amount equal to such Net Cash Proceeds will be promptly applied (net of additional taxes that would be payable or reserved against as a result of repatriating such amounts) in compliance with this covenant. The time periods set forth in this covenant shall not start until such time as the Net Cash Proceeds may be repatriated (whether or not such repatriation actually occurs).
(d) Pending the final application of any such Net Cash Proceeds, the Company and its Restricted Subsidiaries may temporarily reduce Indebtedness (including under a revolving Debt Facility) or otherwise invest or utilize such Net Cash Proceeds in any manner not prohibited by this Indenture. Any amount of Net Cash Proceeds from any Asset Sale that is not applied or invested as provided and within the time period set forth in Section 4.10(b) will be deemed to constitute “"Excess Proceeds”; provided, that any amount of proceeds offered to Holders pursuant to clause (3) of Section 4.10(b) or pursuant to an Asset Sale Offer made at any time after the Asset Sale shall be deemed to have been applied as required and shall not be deemed to be Excess Proceeds without regard to the extent to which such offer is accepted by the Holders". When the aggregate amount of Excess Proceeds exceeds $50.0 million5,000,000 (taking into account income earned on such Excess Proceeds, if any), the Company will be required to make an offer (“Asset Sale Offer”) to all Holders of Notes and, to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company (or the Subsidiary Guarantor, as applicable) to make an offer to purchase such Pari Passu Indebtedness with (the proceeds from any Asset Sale, to purchase "Prepayment Offer") the maximum principal Securities which offer shall be in the amount of Notes and any such Pari Passu Indebtedness to which the Asset Sale Offer applies that may be purchased out of the Excess Proceeds, on a pro rata basis according to principal amount, at an offer a purchase price in cash in an amount equal to 100.0100% of the principal amount of the Notes and Pari Passu Indebtedness thereof plus accrued and unpaid interest to (but not including) the date of purchase (or such lesser price with respect to the Pari Passu Indebtednessthereon, if any, as may be provided by to the terms Purchase Date, subject to the right of such Indebtedness)holders of record on the relevant record date to receive interest due on the relevant interest payment date, in accordance with the procedures (including prorating in the event of oversubscription) set forth herein. To the extent that any portion of the amount of Net Available Cash remains after compliance with the preceding sentence and provided that all holders of Securities have been given the opportunity to tender their Securities for purchase in accordance with Section 4.07(d), the Company or such Restricted Subsidiary may use such remaining amount for any purpose permitted by this Indenture and the amount of Excess Proceeds will be reset to zero.
(1) Within five Business Days after the Company is obligated to make a Prepayment Offer as described in Section 4.07(c), the Company shall send a written notice, by first class mail, to the Trustee and the holders of Securities (the "Prepayment Offer Notice"), accompanied by such information regarding the Company and its Subsidiaries as the Company in good faith believes will enable such holders to make an informed decision with respect to such Prepayment Offer (which at a minimum shall include (i) the most recently filed Annual Report on Form 10-K (including audited consolidated financial statements) of the Company, the most recent subsequently filed Quarterly Report on Form 10-Q of the Company and any Current Report on Form 8-K of the Company filed subsequent to such Quarterly Report, other than Current Reports describing Asset Sales otherwise described in the offering materials, or corresponding successor reports (or, during any time that the Company is not subject to the reporting requirements of Section 13 or 54 46 15(d) of the Exchange Act, corresponding reports prepared pursuant to Section 4.02), (ii) a description of material developments in the Company's business subsequent to the date of the latest of such reports and (iii) if material, appropriate pro forma financial information). The Prepayment Offer Notice shall state, among other things, (a) that a Prepayment Offer is being made pursuant to this Section 4.07 and that all Securities timely tendered will be accepted for payment (subject to proration), (b) that any Security (or any portion thereof) accepted for payment (and duly paid on the Purchase Date) pursuant to the Prepayment Offer shall cease to accrue interest after the Purchase Date, (c) the purchase price and purchase date, which shall be a Business Day no earlier than 30 days nor later than 60 days from the date the Prepayment Offer Notice is mailed (the "Purchase Date"), (d) the aggregate principal amount of Securities (or portions thereof) to be purchased, (e) that any Securities (or portions thereof) not tendered will continue to accrue interest and (f) the procedures that holders of Securities must follow in order to tender their Securities (or portions thereof) for payment and the procedures that holders of Securities must follow in order to withdraw an election to tender Securities (or portions thereof) for payment.
(2) Not later than the date upon which written notice of a Prepayment Offer is delivered to the Trustee as provided above, the Company shall deliver to the Trustee an Officers' Certificate as to (i) the amount of the Prepayment Offer (the "Offer Amount"), (ii) the allocation of the Net Available Cash from the Asset Sales pursuant to which such Prepayment Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.07(b). On such date, the Company shall also irrevocably deposit with the Trustee or with the Paying Agent (or, if the Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust) in Temporary Cash Investments (other than in those enumerated in clause (b) of the definition of Temporary Cash Investments), maturing on the last day prior to the Purchase Date or on the Purchase Date if funds are immediately available by open of business, an amount equal to the Offer Amount to be held for payment in accordance with the provisions of this Section. Upon the expiration of the period for which the Prepayment Offer remains open (the "Offer Period"), the Company shall deliver to the Trustee for cancelation the Securities or portions thereof which have been properly tendered to and are to be accepted by the Company. The Trustee or the agreements governing Paying Agent shall, on the Pari Passu IndebtednessPurchase Date, mail or deliver payment to each 55 47 tendering Holder in the amount of the purchase price. In the event that the aggregate purchase price of the Securities delivered by the Company to the Trustee is less than the Offer Amount, the Trustee or the Paying Agent shall deliver the excess to the Company immediately after the expiration of the Offer Period for application in accordance with this Section.
(3) Holders electing to have a Security purchased shall be required to surrender the Security, with an appropriate form duly completed, to the Company or its agent at the address specified in the notice at least three Business Days prior to the Purchase Date. Holders shall be entitled to withdraw their election if the Trustee or the Company receives not later than one Business Day prior to the Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Security which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Security purchased. If at the expiration of the Offer Period the aggregate principal amount of Securities surrendered by Holders exceeds the Offer Amount, the Company shall select the Securities to be purchased on a pro rata basis (with such adjustments as applicablemay be deemed appropriate by the Company so that only Securities in denominations of $1,000, or integral multiples thereof, shall be purchased). Holders whose Securities are purchased only in part shall be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee which are to be accepted for purchase, the Company shall also deliver an Officers' Certificate stating that such Securities are to be accepted by the Company pursuant to and in accordance with the terms of this Section. A Security shall be deemed to have been accepted for purchase at the time the Trustee or the Paying Agent mails or delivers payment therefor to the surrendering Holder.
(e) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Section. To the extent that the aggregate amount provisions of Notes and Pari Passu Indebtedness so properly tendered and not withdrawn pursuant to an Asset Sale Offer is less than the Excess Proceedsany securities laws or regulations conflict with provisions of this Section, the Company may use any remaining Excess Proceeds for any purpose shall comply with the applicable securities laws and regulations and shall not prohibited be deemed to 56 48 have breached its obligations under this Section by this Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Indebtedness surrendered by Holders or lenders, collectively, exceeds the amount of Excess Proceeds, selection of Notes for purchase will be made by the Company in accordance with Section 3.04(f). Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zerovirtue thereof.
Appears in 1 contract
Samples: Indenture (Dii Group Inc)
