Limitation on Asset Dispositions Clause Samples
A Limitation on Asset Dispositions clause restricts a party’s ability to sell, transfer, or otherwise dispose of significant assets without meeting certain conditions or obtaining prior consent. Typically, this clause applies to key assets such as property, equipment, or intellectual property, and may require the party to maintain a minimum asset base or to use sale proceeds in a specified manner. Its core function is to protect the interests of lenders or other stakeholders by preventing the unauthorized reduction of the asset base that could undermine the financial stability or value of the business.
Limitation on Asset Dispositions. (a) Level 3 shall not, and shall not permit any Restricted Subsidiary to, make any Asset Disposition unless: (i) Level 3 or the Restricted Subsidiary, as the case may be, receives consideration for such disposition at least equal to the Fair Market Value for the Property sold or disposed of as determined by the Board of Directors of Level 3 in good faith and evidenced by a Board Resolution of Level 3; and (ii) at least 75% of the consideration for such disposition consists of cash or Cash Equivalents or the assumption of Indebtedness of the Borrower or any Borrower Restricted Subsidiary (other than Indebtedness of the Borrower that is subordinated to the Obligations or Indebtedness of any Borrower Restricted Subsidiary that is subordinated to the Obligations of such Borrower Restricted Subsidiary) and release of the Borrower and all Borrower Restricted Subsidiaries from all liability on the Indebtedness assumed (or if less than 75%, the remainder of such consideration consists of Telecommunications/IS Assets); provided, however, that, to the extent such disposition involves Special Assets, all or any portion of the consideration may, at Level 3’s election, consist of Property other than cash, Cash Equivalents or the assumption of Indebtedness or Telecommunications/IS Assets.
(b) If the Net Available Proceeds from any Asset Disposition (or any series of related Asset Dispositions) consisting of Property that is Collateral or Property that would be required to become Collateral following the satisfaction of the Guarantee Permit Condition and the Collateral Permit Condition exceed $20,000,000, the Borrower shall deposit an amount in cash or cash equivalents equal to such Net Available Proceeds (which such amount shall thereafter constitute the Net Available Proceeds of such Asset Disposition or related Asset Dispositions) into a deposit account in which the Collateral Agent has a perfected security interest in favor of the Lenders. Prior to the time a Notice of Default shall have been delivered to the Borrower pursuant to Article VII, the Borrower may withdraw such Net Available Proceeds, and the Collateral Agent, at the Request of the Borrower, shall take all actions necessary, at the expense of the Borrower, to promptly release the security interest in such Net Available Proceeds (i) to permit ▇▇▇▇▇ ▇ or a Restricted Subsidiary to reinvest such Net Available Proceeds in Telecommunications/IS Assets, (ii) to permit the Borrower to repay the Loans in accordan...
Limitation on Asset Dispositions. No Borrower will, nor will it permit any of its Subsidiaries to, make any Asset Disposition (including, without limitation, in connection with any Sale and Leaseback Transaction), in one transaction or a series of transactions, unless (a) no Default or Event of Default shall exist on the date of, or shall result from, any such transaction (including after giving effect to such transaction on a pro forma basis); and (b) the assets so disposed of or transferred in connection with all such Asset Dispositions in any Fiscal Year did not contribute, in the aggregate, more than 20% of Consolidated Operating Profit for the immediately preceding Fiscal Year.
Limitation on Asset Dispositions. (a) The Guarantor may not, and may not permit any Restricted Subsidiary of the Guarantor to, make any Asset Disposition in one or more related transactions unless: (i) the Guarantor or the Restricted Subsidiary, as the case may be, receives consideration for such disposition at least equal to the fair market value for the assets sold or disposed of as determined by the Board of Directors in good faith and, in the case of an Asset Disposition in an amount greater than $5 million, evidenced by a resolution of the Board of Directors filed with the Trustee; and (ii) at least 75% of the consideration for such disposition consists of (1) cash or readily marketable cash equivalents or the assumption of Debt of the Guarantor (other than Debt that is subordinated to the Securities) or of a Restricted Subsidiary and release from all liability on the Debt assumed, or (2)
Limitation on Asset Dispositions. The Company shall not, and shall not permit any Restricted Subsidiary to, make any Asset Disposition unless: (i) the Company or the Restricted Subsidiary, as the case may be, receives consideration for such disposition at least equal to the Fair Market Value for the Property sold or disposed of as determined by the Board of Directors in good faith and evidenced by a Board Resolution filed with the Trustee; and (ii) at least 75% of the consideration for such disposition consists of cash or Cash Equivalents or the assumption of Debt of the Company or any Restricted Subsidiary (other than Debt that is subordinated to the Securities or any applicable Restricted Subsidiary Guarantee) and release of the Company and all Restricted Subsidiaries from all liability on the Debt assumed (or if less than 75%, the remainder of such consideration consists of Telecommunications/IS Assets); provided, however, -------- ------- that, to the extent such disposition involves Special Assets, all or any portion of the consideration may, at the Company's election, consist of Property other than cash, Cash Equivalents, the assumption of Debt or Telecommunications/IS Assets.
Limitation on Asset Dispositions. The Borrower will not sell, lease, transfer or otherwise dispose of (in one transaction or a series of transactions and including by means of any merger, Equity Issuance of Capital Stock or otherwise) all or substantially all of its assets, on a consolidated basis, (whether now owned or hereafter acquired) except as permitted in Sections 8.04, except for any such disposition of assets which results from the merger, Equity Issuance of Capital Stock or other transaction between the Borrower and its Subsidiaries so long as the surviving entity remains a Subsidiary of the Borrower.
Limitation on Asset Dispositions. (a) The Company may not, and may not permit any Restricted Subsidiary to, make any Asset Disposition in one or more related transactions occurring within any 12-month period unless:
(i) the Company or the Restricted Subsidiary, as the case may be, receives consideration for such disposition at least equal to the fair market value for the assets sold or disposed of as determined by the Board of Directors in good faith and evidenced by a Board Resolution filed with the Trustee, which determination shall be conclusive;
(ii) at least 75% of the consideration for such disposition consists of:
(1) cash or readily marketable cash equivalents or the assumption of Debt or other obligations of the Company (other than Debt that is subordinated to the Securities) or of the Restricted Subsidiary and release from all liability on the Debt or other obligations assumed;
(2) Telecommunications Assets; or
(3) shares of publicly-traded Voting Stock of any Person engaged in the Telecommunications Business in the United States; and
(iii) all Net Available Proceeds, less any amounts invested in Telecommunications Assets (within 180 days prior to and 360 days following such disposition), are applied within 360 days of such disposition
(1) first, to the permanent repayment or reduction of Debt then outstanding under any Bank Credit Agreement or Vendor Financing Facility, to the extent such agreements would require such application or prohibit payments pursuant to clause (2) following,
(2) second, to the extent of remaining Net Available Proceeds, to make an Offer to Purchase outstanding Securities at 100% of their principal amount plus accrued interest to the date of purchase and, to the extent required by the terms thereof, any other Debt of the Company that is PARI PASSU with the Securities at a price no greater than 100% of the principal amount thereof plus accrued interest to the date of purchase (or 100% of the accreted value in the case of original issue discount Debt) and
(3) third, to the extent of any remaining Net Available Proceeds following the completion of the Offer to Purchase, to the repayment of other Debt of the Company or Debt of a Restricted Subsidiary of the Company, to the extent permitted under the terms thereof. To the extent any Net Available Proceeds remain after such uses, the Company and its Restricted Subsidiaries may use such amounts for any purposes not prohibited by this Indenture.
(b) The Company will mail the Offer for an Offer to Purchase requir...
Limitation on Asset Dispositions. The Issuer may not, and may not permit any Issuer Restricted Subsidiary to, make any Asset Disposition consisting of Property that is Collateral unless the Issuer or the Issuer Restricted Subsidiary, as the case may be, receives consideration for such disposition at least equal to the Fair Market Value for the Property sold or disposed of as determined by the Issuer in good faith and evidenced by a resolution of the board of directors of the Issuer (or a duly authorized committee thereof) filed with the Trustee.
Limitation on Asset Dispositions. (a) The Issuer shall not, and shall not permit PropCo to, make any Asset Disposition unless:
(i) the Issuer or PropCo, as the case may be, receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at least equal to the fair market value (such fair market value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by the Issuer, of the Equity Interests, property or assets subject to such Asset Disposition;
(ii) in any such Asset Disposition, or series of related Asset Dispositions, at least 75% of the consideration from such Asset Disposition (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise), received by the Issuer or PropCo, as the case may be, is in the form of cash, cash equivalents or other Permitted Investments; and
(iii) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied within 365 days after the receipt thereof (or, if the Issuer or PropCo enters into a binding commitment to acquire such long-term assets within 365 days of receipt of such Net Available Cash, within 540 days of receipt thereof) at the option of the Issuer:
(A) to repay, redeem, repurchase or otherwise acquire or retire: (1) the Notes; (2) any other Parity Lien Obligations; provided that in the case of clause (2), the Issuer shall equally and ratably reduce the Notes Obligations (x) through open market purchases (to the extent such purchases are at or above 100% of the principal amount of the Notes, (y) as provided under Section 5.7 or (z) by making an Asset Disposition Offer; or
(B) by PropCo to acquire Real Estate Assets that would constitute and are pledged in favor of the Parity Lien Obligations as, Collateral; or
(C) any combination of the foregoing; provided that, pending the final application of the amount of any such Net Available Cash in accordance with clause (iii) of this Section 3.5(a), the Issuer and PropCo may temporarily reduce Indebtedness or otherwise use such Net Available Cash in any manner not prohibited by this Indenture. For purposes of the 75% cash, cash equivalents or other Permitted Investments requirement set forth in clause (ii) above, the following shall be deemed to be “cash”: (I) any liabilities (as shown on the Issuer’s or PropCo’s most recent balance sheet or in the footnotes thereto which sha...
Limitation on Asset Dispositions. The Company will not, and will not permit any Subsidiary of the Company to, make any Asset Disposition in one or more related transactions unless:
Limitation on Asset Dispositions. The Issuer shall not, and shall not permit any of the other Obligors, directly or indirectly, to, make any Asset Disposition unless either (i) the Issuer or other Obligor, as the case may be, received consideration at the time of such Asset Disposition at least equal to 90% of the fair market value of the assets that are the subject of the Asset Disposition, (ii) both the book value of the assets which are the subject of the Asset Disposition and the consideration received at the time of such Asset Disposition are less than $7.5 million, (iii) the Finance Committee shall have given its advance approval to such Asset Disposition or (iv) the terms of such Asset Disposition were approved by either (A) the Bankruptcy Court for the District of Delaware or (B) the Official Unsecured Creditors Committee.