Mandatory Offer Procedures Clause Samples
The Mandatory Offer Procedures clause sets out the requirements and steps that must be followed when a party is obligated to make an offer to purchase shares or assets, typically triggered by reaching a certain ownership threshold. In practice, this clause details the timeline, notification process, and terms under which the offer must be made, ensuring all relevant parties are informed and have the opportunity to respond. Its core function is to ensure fairness and transparency in transactions that could affect control or ownership, preventing any party from bypassing established procedures and protecting minority stakeholders.
Mandatory Offer Procedures. Any mandatory offer pursuant to Section 2.09(a) or Section 2.09(e) shall be made in accordance with the following procedures:
(i) not more than thirty (30) days after (x) in the event the Borrower does not exercise its Replacement Rights, receipt of the Casualty Event Offer Amount or, in the event the Borrower does exercise its Replacement Rights, the Replacement Deadline, or (y) in the event the Borrower does not exercise its Reinvestment Rights, receipt of the Disposition Offer Proceeds or, in the event the Borrower does exercise its Reinvestment Rights, the Reinvestment Deadline, as applicable (the “Offer Date”), the Borrower shall send a notice to the Administrative Agent for distribution to each Lender (such notice, the “Offer Notice” and the procedures set forth therein, the “Offer Procedures”) stating:
(A) that a prepayment offer is being made pursuant to Section 2.09(a) or Section 2.09(e), as applicable,
(B) the amount of Offer Proceeds subject to such offer,
(C) that any Lender that accepts such offer in accordance with this Section 2.09(f)(i) shall receive a prepayment of its Loans equal to its Proportional Share of the Offer Proceeds determined as of the Offer Payment Date, to be applied in accordance with Section 2.09(h) of this Agreement,
(D) the time and date by which such Lender must deliver to the Administrative Agent and Borrower written notice of its acceptance of such offer (which, in any case, shall not be less than five (5) Business Days nor longer than twenty (20) Business Days after the distribution of the Offer Notice) (the “Acceptance Deadline”),
(E) the date such prepayment is to occur (which, in any case, shall be no later than the next Interest Payment Date occurring after the Acceptance Deadline) (the “Offer Payment Date”),
(F) that any Lender accepting such offer shall be required to surrender the Notes (if any) held by such Lender to be so prepaid by no later than the Offer Payment Date (unless such requirement is waived by the Borrower in its sole discretion), if applicable, subject to receipt of, and only in exchange for, a replacement Note pursuant to clause (iii) below, and
(G) that any Lender that accepts the offer shall be entitled to withdraw its election if the Administrative Agent receives written notice thereof by no later than 5:00 p.m. New York City time on the date before the Offer Payment Date.
(ii) Any Loans held by a Lender that validly accepts such offer by the Acceptance Deadline will continue to accrue inte...