Limitation on Sales of Assets and Subsidiary Stock. (a) Propco shall not, and shall not permit any of its Subsidiaries to, make any Asset Disposition unless: (i) Propco or such Subsidiary, 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company), of the securities and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking; (ii) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco or such Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and (iii) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects: (A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions, (B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or (C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars. (b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash: (i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition; (ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition; (iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and (iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and (v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value. (c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions. (d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (Macy's, Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco shall The Parent Guarantor will not, and shall will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco the Parent Guarantor or such Restricted Subsidiary, as the case may be, receives consideration (including by way at the time of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) such Asset Disposition at least equal to the fair market value Fair Market Value (such fair market value Fair Market Value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company), ) of the securities and shares or other assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii2) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the aggregate consideration received by the Parent Guarantor or such Restricted Subsidiary, as the case may be, from such Asset Disposition, together with Disposition and all other Asset Dispositions since the Issue Date (Date, on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco or such Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; Equivalents or Additional Assets, or any combination thereof;
(3) except as provided that, in the case of next paragraph, an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and
(iii) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt amount equal to 100% of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth belowis applied, within 365 days from the “Proceeds Application Period”), an amount equal to later of the date of such Asset Disposition or the receipt of such Net Available Cash (Cash, by the “Applicable Proceeds”) is applied, to the extent Propco Parent Guarantor or any such Restricted Subsidiary, as the case may be, elects:
(Aa) for to prepay, repay, redeem or purchase Pari Passu Indebtedness of the Company Parent Guarantor, the Issuer (including the Securities) or a Subsidiary Guarantor or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations Indebtedness (other than the Notes); provided Preferred Stock) of a Restricted Subsidiary that the Company or is not a Subsidiary shall use a ratable amount to offer Guarantor (in accordance with each case, excluding Indebtedness owed to the procedures set forth below for Parent Guarantor or an Asset Disposition Offer) to redeem a ratable amount Affiliate of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition OfferParent Guarantor), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateralthat, in each case applied (connection with any prepayment, repayment, redemption or committed to be applied) purchase of Indebtedness pursuant to this clause (ba), the Parent Guarantor or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) must be applied (or committed to be applied) permanently reduced in an amount equal to invest in other Distribution Center Collateral the principal amount so prepaid, repaid, redeemed or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documentspurchased; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause or
(b) to invest in Store Collateral or properties or assets constituting, part Additional Assets; and
(4) in the case of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination Capital Stock of the foregoing; provided that Propco (Issuer, unless the Issuer has consolidated with, merged or any Subsidiary of Propcoamalgamated with or into, as or wound up into, the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise Parent Guarantor in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Section 4.1, upon such Asset Disposition (the Issuer shall remain a Restricted Subsidiary of the Parent Guarantor provided that pending the final application of any such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and Net Available Cash in accordance with clause (a) or clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amountabove, the Parent Guarantor and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net Available Cash in any manner not prohibited by this Indenture. Any Net Available Cash from Asset Dispositions that is not applied or invested as provided in the preceding paragraph will be deemed to constitute “Excess Proceeds”).” Not later than the 366th day from the later of the date of such Asset Disposition or the receipt of such Net Available Cash, then if the Company or a Subsidiary shall aggregate amount of Excess Proceeds exceeds $20.0 million, the Issuer will make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes Securities and, if to the extent required by the terms of any Parity Lien Obligationsother Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Issuer to make an offer to purchase such Parity Lien Obligations Pari Passu Indebtedness with the proceeds from any Asset Disposition (“Pari Passu Securities”) to purchase the maximum principal amount of Securities and any such Notes and Parity Lien Obligations, on a pro rata basis, Pari Passu Securities to which the Asset Disposition Offer applies that may be purchased out of such the Excess Proceeds, if any, at an offer price, in the case of the Notes, price in cash in an amount equal to 100% of the principal amount thereof (or or, in the event such other Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), ) of the Securities and Pari Passu Securities plus accrued and unpaid interest, if any (or in respect of such Pari Passu Indebtedness, such lesser price with respect to Parity Lien Obligations price, if any, as may be provided for by the terms of such other Indebtedness), to, but not including, to the date fixed for of purchase (subject to the closing right of such offerHolders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the procedures set forth in this Indenture and Section 3.5 or the agreement agreements governing the Parity Lien Obligations Pari Passu Securities, as applicable, in each case in minimum denominations principal amount of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture2,000. If the aggregate principal amount (of Securities surrendered by Holders thereof and other Pari Passu Securities surrendered by holders or accreted valuelenders, as applicable) of the Notes orcollectively, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance OfferProceeds, the Advance Portion), Trustee shall select the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations Securities to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes Securities and Parity Lien Obligations; provided Pari Passu Securities. To the extent that no Notes or Parity Lien Obligations will be selected the aggregate principal amount of Securities and purchased Pari Passu Securities so validly tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the Parent Guarantor and its Restricted Subsidiaries may use any remaining Excess Proceeds for general corporate purposes, subject to the other covenants contained in an unauthorized denominationthis Indenture. Upon completion of any such Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion The Asset Disposition Offer will remain open for a period of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars20 Business Days following its commencement, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, except to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such a longer period is required by applicable law (the “Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received Disposition Offer Period”). No later than five Business Days after the Issue Date from Persons who are not the Company or any Subsidiary termination of the Company; and
Asset Disposition Offer Period (v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such the “Asset Dispositions having an aggregate fair market valueDisposition Purchase Date”), taken together with all other Designated Non-Cash Consideration received the Issuer will purchase the principal amount of Securities and Pari Passu Securities required to be purchased pursuant to this Section 3.5 (the “Asset Disposition Offer Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered and not properly withdrawn, all Securities and Pari Passu Securities validly tendered and not properly withdrawn in response to the Asset Disposition Offer. If the Asset Disposition Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest, 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 further interest will be payable to Holders who tender Securities pursuant to the Asset Disposition Offer. On or before the Asset Disposition Purchase Date, the Issuer will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Securities and Pari Passu Securities or portions of Securities and Pari Passu Securities so validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Securities and Pari Passu Securities so validly tendered and not properly withdrawn, in each case in minimum principal amount of $2,000 and integral multiples of $1,000 in excess of $2,000. The Issuer will deliver to the Trustee an Officers’ Certificate stating that is at such Securities or portions thereof were accepted for payment by the Issuer in accordance with the terms of this Section 3.5 and, in addition, the Issuer will deliver all certificates and notes required, if any, by the agreements governing the Pari Passu Securities. The Issuer or the paying agent, as the case may be, will promptly (but in any case not later than five Business Days after the termination of the Asset Disposition Offer Period) mail or deliver to each tendering Holder of Securities or holder or lender of Pari Passu Securities, as the case may be, an amount equal to the purchase price of the Securities or Pari Passu Securities so validly tendered and not properly withdrawn by such holder or lender, as the case may be, and accepted by the Issuer for purchase, and the Issuer will promptly issue a new Security, and the Trustee, upon delivery of an Officers’ Certificate from the Issuer, will authenticate and mail or deliver such new Security to such Holder, in a principal amount equal to any unpurchased portion of the Security surrendered; provided that time outstandingeach such new Security will be in a minimum principal amount of $2,000 or an integral multiple of $1,000 in excess of $2,000. In addition, the Issuer will take any and all other actions required by the agreements governing the Pari Passu Securities. Any Security not so accepted will be promptly mailed or delivered by the Issuer to exceed $50 millionthe Holder thereof. The Issuer will publicly announce the results of the Asset Disposition Offer on the Asset Disposition Purchase Date. The Issuer will comply with all applicable securities legislation in Canada and the United States, including, without limitation, with the fair market value requirements of each item Rule 14e-1 of Designated Non-Cash Consideration being measured at the time received Exchange Act and without giving effect any other securities laws or regulations in connection with the repurchase of Securities pursuant to subsequent changes in value.
(c) an Asset Disposition Offer. To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, regulations conflict with the provisions of this IndentureSection 3.5, the Company shall Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in under this Indenture by virtue of its compliance therewithwith such securities laws or regulations. For the purposes of clause (2) of the first paragraph of this Section 3.5, the following will be deemed to be cash consideration received by the Parent Guarantor or such Restricted Subsidiary:
(1) the assumption by the transferee of Indebtedness (other than Guarantor Subordinated Obligations or Disqualified Stock) of the Parent Guarantor or Indebtedness of a Restricted Subsidiary (other than Subordinated Obligations or Disqualified Stock of the Issuer and Guarantor Subordinated Obligations or Disqualified Stock of any Restricted Subsidiary that is a Subsidiary Guarantor) and the release of the Parent Guarantor or such Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset Disposition (in which case the Parent Guarantor will, without further action, be deemed to have applied such deemed cash to Indebtedness in accordance with clause (3)(a) of the first paragraph of this Section 3.5;
(2) with respect to any Asset Disposition of oil and gas properties by the Parent Guarantor or any Restricted Subsidiary, any agreement by the transferee (or an Affiliate thereof) to pay all or a portion of the costs and expenses related to the exploration, development, completion or production of such oil and gas properties and activities related thereto; and
(3) securities, notes or other obligations received by the Parent Guarantor or any Restricted Subsidiary from the transferee that are converted by the Parent Guarantor or such Restricted Subsidiary into cash within 180 days after receipt thereof. Notwithstanding the foregoing, the 75% limitation referred to in clause (2) of the first paragraph of this Section 3.5 shall be deemed satisfied with respect to any Asset Disposition in which the cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance with the foregoing provision on an after-tax basis, is equal to or greater than what the after-tax proceeds would have been had such Asset Disposition complied with the aforementioned 75% limitation. The Company may rely on any no-action letters issued requirement of clause (3)(b) of the first paragraph of this Section 3.5 shall be deemed to be satisfied if an agreement (including a lease, whether a capital lease or an operating lease) committing to make the acquisitions or expenditures referred to therein is entered into by the SEC indicating that Parent Guarantor or its Restricted Subsidiary within the staff of the SEC specified time period and such Net Available Cash is subsequently applied in accordance with such agreement within six months following such agreement. The Parent Guarantor will not, and will not recommend enforcement action permit any Restricted Subsidiary 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; and
(2) in the event such Asset Swap involves the transfer by the Parent Guarantor or any Restricted Subsidiary of assets having an aggregate Fair Market Value in excess of $20.0 million, the terms of such Asset Swap have been approved by a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent majority of the Holders of a majority in principal amount members of the Notes then outstandingBoard of Directors of the Parent Guarantor.
Appears in 1 contract
Sources: Indenture (Lone Pine Resources Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Parent Guarantor shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco the Parent Guarantor or such Restricted Subsidiary, 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company)Parent Guarantor, of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
(ii2) in any such Asset Disposition Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap)) with a purchase price in excess of $150 million and 15.0% of LTM EBITDA, at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), ) (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco the Parent Guarantor or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided thatprovided, in however, to the case of extent that any assets subject to an Asset Disposition of Real Property were Collateral, or of Equity the non-cash consideration received is pledged as Collateral of any Subsidiary of Propco that ownsunder the Collateral Documents substantially simultaneously with such sale, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy accordance with the requirements of a Permitted Asset Swapthis Indenture and the Collateral Documents; and
(iii3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied, either:
(i) within 365 450 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:Cash,
(A) for the Company or any Subsidiary of the Company (ia) to reduce, prepay, repay or purchase any Parity Indebtedness that is secured by a First Priority Lien Obligations (other than including, to the Notesextent secured by a First Priority Lien, the Indebtedness under the Credit Agreement or ABL Credit Agreement incurred pursuant to SECTION 3.2(a) (or any Refinancing Indebtedness in respect thereof)); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,or
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien reduce Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of under the Notes at such Holder’s registered address as provided under SECTION 5.7, through open market purchases or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (; or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent to prepay, repay or purchase Pari Passu Indebtedness; provided that the provisions of any securities laws Parent Guarantor or regulationssuch Restricted Subsidiary, including Rule 14e-1 as applicable, shall equally and ratably reduce Obligations under the Exchange ActNotes (A) through open market purchases, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture (B) by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the redeeming Notes as a result of provided under SECTION 5.7, or (C) by making an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.Offer; or
Appears in 1 contract
Sources: Indenture (iHeartMedia, Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco Parent shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, make directly or indirectly, consummate any Asset Disposition unless:
(i1) Propco Parent or such Subsidiary, as the case may be, Restricted Subsidiary receives consideration (including by way at the time of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) such Asset Disposition at least equal to the fair market Fair Market Value (including as to the value (such fair market value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than all non-cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company), consideration) of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii2) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) thereof received by Propco Parent or such Subsidiary, as the case may be, Restricted Subsidiary is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swapequivalents; and
(iii3) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt an amount equal to 100% of the Net Available Cash from such Asset Disposition (as may be extended is applied by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to Parent or such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco Restricted Subsidiary within 365 days after Parent’s or any Restricted Subsidiary’s receipt of the proceeds of any Asset Disposition, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company to repay (i) secured Indebtedness (and, if the Indebtedness repaid is revolving credit Indebtedness, to reducecorrespondingly reduce commitments with respect thereto), prepay(ii) Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor, repay (iii) the Notes or purchase any Parity Lien Obligations (iv) other Senior Indebtedness (other than the Notes); secured Indebtedness) (provided that if the Company Issuer or a Subsidiary any Guarantor shall use a ratable amount so reduce Obligations under other Senior Indebtedness pursuant to offer this subclause (iv) that does not constitute secured Indebtedness (which does not include Indebtedness described in accordance with subclauses (i), (ii) and (iii), even if such Indebtedness may also constitute Senior Indebtedness), the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Issuer will equally and ratably repurchase the Notes as described in Section 5.6 or purchase a ratable amount of Notes provided under Article III through open-market purchases (provided that such purchases are at or in privately negotiated transactions, above 100% of the principal amount thereof) or (ii) to make by making an offer (in accordance with the procedures set forth below in Section 4.06(b) for an Asset Disposition Excess Proceeds Offer) to all Holders to purchase a pro rata principal amount of Notes at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any), redeem Notes as described in Section 5.6 each case, other than Indebtedness owed to Parent or purchase Notes through open-market purchases or in privately negotiated transactions,an Affiliate of Parent;
(B) other than to the extent the Issuer elects (including with respect to Applicable Proceeds relating to an Asset Disposition the balance of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco such Net Available Cash after application (iif any) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents clause (including by means of an investment A)), to acquire , or make a capital expenditure in respect of, Additional Assets by Propco (or a Subsidiary to reimburse the cost of Propcoany acquisition of, or capital expenditure in respect of, Additional Assets made after the Asset Disposition was contractually committed); or (ii) to invest (including capital expenditures) in any , within one or more properties or assets that replace year from the properties and/or assets that are later of the subject date of such Asset Disposition and are or become Collateral the receipt of such Net Available Cash; and
(C) to the extent of the balance of such Net Available Cash after application (if any) in accordance with clauses (A) and (B), to make an offer to the Security DocumentsHolders (and to holders of other Senior Indebtedness of the Issuer or any Guarantor designated by Parent) to purchase Notes (and such other Senior Indebtedness of the Issuer or any Guarantor) pursuant to and subject to the conditions contained in this Indenture; provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness made to satisfy clause (A) or (C) above, Parent or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased. In the case of clause (B) above, a binding agreement commitment shall be treated as a permitted application of Applicable Proceeds the Net Available Cash from the date of such commitment with until the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days 18-month anniversary of the date of the receipt of such commitment Net Available Cash. Notwithstanding the foregoing provisions of this Section 4.06, (an “Acceptable Commitment”); provided further, that (xA) the 75% limitation referred to in Section 4.06(a)(2) shall not apply to any Applicable Proceeds relating to an Asset Disposition in which the cash or cash equivalents portion of any Distribution Center Collateral or High Store Collateralthe consideration received therefrom, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral determined in accordance with Section 4.06(a), is equal to or greater than what the Security Documents, after-tax proceeds would have been had such Asset Disposition complied with the aforementioned 75% limitation and (yB) Parent and the Restricted Subsidiaries will not be required to apply any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral Net Available Cash in accordance with this Section 4.06 except to the Security Documents; provided further extent that the aggregate amount of Applicable Proceeds Net Available Cash from an all Asset Disposition of Distribution Center Collateral Dispositions that may be is not applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause Section 4.06 (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”)) exceeds $25.0 million. Pending application of Net Available Cash pursuant to this Section 4.06, then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that Net Available Cash may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal applied to 100% of the principal amount thereof (temporarily reduce revolving credit indebtedness or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose manner not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of this Section 3.5(a)4.06, the following will be are deemed to be cashcash or cash equivalents:
(i1) the assumption or discharge of any liabilities (as shown on Parent’s or such Restricted Subsidiary’s most recent balance sheet or in the footnotes thereto) of Parent or such Restricted Subsidiary (other than liabilities that are by their terms subordinated in right of payment to the Notes and the Note Guarantees) that are assumed by the transferee of Indebtedness such assets or other liabilities, contingent that are otherwise cancelled or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability terminated in connection with the transaction with such Asset Dispositiontransferee;
(ii2) securities, notes securities or other obligations or assets received by Propco Parent or any Restricted Subsidiary from the transferee that are converted by Propco Parent or such Restricted Subsidiary within 180 days into cash or Cash Equivalentscash, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), received in each case, within 180 days following the closing of such Asset Dispositionthat conversion;
(iii3) all Temporary Cash Investments;
(4) Indebtedness of any Restricted Subsidiary of Propco that is no longer a Restricted Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco the Issuer and each other Restricted Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such the Asset Disposition; and;
(iv5) consideration consisting of Parity Lien Debt Indebtedness of the Issuer (other than Subordinated Indebtedness) received after the Issue Date from Persons who are not the Company Parent or any Subsidiary of the CompanyRestricted Subsidiary; and
(v6) any Designated Non-Cash Noncash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market valueFair Market Value that, when taken together with all other Designated Non-Cash Noncash Consideration previously received pursuant to this Section 3.5 that is at that time and then outstanding, does not to exceed $50 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 Non-Cash Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value) $35.0 million.
(b) In the event of an Asset Disposition that requires the purchase of Notes (and other Senior Indebtedness of the Issuer or any Guarantor) pursuant to Section 4.06(a)(3)(C), the Issuer shall purchase Notes tendered pursuant to an offer (an “Excess Proceeds Offer”) by the Issuer for the Notes (and such other Senior Indebtedness) at a purchase price of 100% of their principal amount (or, in the event such other Senior Indebtedness of the Issuer or a Guarantor was issued with a significant original issue discount, 100% of the accreted value thereof) without premium, plus accrued but unpaid interest (or, in respect of such other Senior Indebtedness of the Issuer or a Guarantor, such lesser price, if any, as may be provided for by the terms of such Senior Indebtedness) in accordance with the procedures (including prorating in the event of oversubscription) set forth in this Indenture. If the aggregate principal amount of Notes and other Senior Indebtedness of the Issuer or a Guarantor tendered exceeds the Net Available Cash allotted to their purchase, the Issuer shall select the Notes and such other Senior Indebtedness to be purchased on a pro rata basis based on the principal amount of the Notes or such other Senior Indebtedness but in round denominations, which in the case of the Notes will be denominations of $2,000 principal amount or any greater integral multiple of $1,000. To the extent that the aggregate amount of Notes and other Senior Indebtedness so tendered pursuant to an Excess Proceeds Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes, subject to the other covenants contained in this Indenture. The Issuer shall not be required to make such an offer to purchase Notes (and other Senior Indebtedness of the Issuer or a Guarantor) pursuant to this Section 4.06 if the Net Available Cash available therefor is less than $25.0 million (which lesser amount shall be carried forward for purposes of determining whether such an offer is required with respect to the Net Available Cash from any subsequent Asset Disposition). Upon completion of an Excess Proceeds Offer, the amount of Excess Proceeds shall be reset at zero.
(c) The Issuer 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 Notes pursuant to this Section 4.06. To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, regulations conflict with the provisions of this IndentureSection 4.06, the Company Issuer shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in under this Indenture Section 4.06 by virtue of its compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditionswith such securities laws or regulations.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Company shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, make directly or indirectly, consummate any Asset Disposition unless:
(i) Propco the Company or such Subsidiary, as the case may be, Restricted Subsidiary receives consideration at the time of such Asset Disposition (including by way or conclusion of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwisepayment schedule with respect to such Asset Disposition) at least equal to the fair market Fair Market Value (including as to the value (such fair market value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than all non-cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company), consideration) of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;Disposition; and
(ii) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Dispositionthereof, together with all other Asset Dispositions since the Issue Escrow Release Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco the Company or such Subsidiary, as the case may be, Restricted Subsidiary is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and
(iii) within 365 . Within 450 days from the later of (A) the date of such Asset Disposition and (B) after the receipt of the any Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth belowor, in the case of a Designated Foreign Asset Disposition, within the time period specified in the definition thereof), the “Proceeds Application Period”), an amount equal to such Net Available Cash (Company or the “Applicable Proceeds”) is applied, to the extent Propco or any applicable Restricted Subsidiary, as the case may be, electsshall apply the Net Available Cash from such Asset Disposition:
(A) for to the Company extent the assets or any Subsidiary property disposed of in the Company Asset Disposition constituted Collateral, to repay (i) Secured Notes Obligations, (ii) Senior Secured Credit Facilities Obligations or (iii) any Additional Equal Priority Obligations, and in each case, in the case of revolving obligations, to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes)correspondingly reduce commitments with respect thereto; provided that all reductions of Secured Notes Obligations shall be made pursuant to Section 5 of the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes Securities, through open-market purchases (to the extent such purchases are at or in privately negotiated transactions, above 100% of the principal amount thereof) or (ii) to make by making an offer (in accordance with the procedures set forth below for an in Section 4.06(b)) to all Holders to purchase their Securities at 100% of the principal amount thereof, plus accrued but unpaid interest, if any, on such Securities;
(B) to the extent the assets or property disposed of in the Asset Disposition Offer)did not constitute Collateral:
(i) to repay (x) Secured Notes Obligations, redeem (y) Senior Secured Credit Facilities Obligations or (z) any Additional Equal Priority Obligations, and in each case, in the case of revolving obligations, to correspondingly reduce commitments with respect thereto; provided that if the Issuer or any Restricted Subsidiary shall repay any Obligations pursuant to clause (z) above, the Issuer or such Restricted Subsidiary will either (I) reduce the aggregate principal amount of Secured Notes as described in Obligations on a ratable basis with any such Obligations under the Additional Equal Priority Obligations repaid pursuant to this clause (B)(i) by, at its option, (x) redeeming Securities pursuant to Section 5.6 5 of the Securities or purchase Notes (y) purchasing Securities through open-market purchases or in privately negotiated transactions,
(BII) other than with respect to Applicable Proceeds relating to make an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco offer (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents provisions set forth in Section 4.06(b)) to all Holders to purchase their Securities on a ratable basis with any Obligations under the Additional Equal Priority Obligations repaid pursuant to this clause (including by means B)(i) for no less than 100% of the principal amount thereof plus the amount of accrued and unpaid interest, if any, thereon (which offer shall be deemed to be an investment in Additional Assets by Propco or a Subsidiary of PropcoAsset Disposition Offer for purposes hereof); or or
(ii) to invest repay Obligations under any Senior Indebtedness (including capital expendituresother than any Senior Indebtedness referred to in clause (B)(i) above), and in the case of revolving obligations, to correspondingly reduce commitments with respect thereto; provided that the Issuer or such Restricted Subsidiary will either (I) reduce the aggregate principal amount of Secured Notes Obligations on an equal or ratable basis with any one such Senior Indebtedness repaid pursuant to this clause (B)(ii) by, at its option, (x) redeeming Securities pursuant to Section 5 of the Securities or more properties (y) purchasing Securities through open-market purchases or (II) make an offer (in accordance with the provisions set forth in Section 4.06(b) and for no less than 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, thereon) to all Holders to purchase their Securities on an equal or ratable basis with any Senior Indebtedness repaid pursuant to this clause (B)(ii) (which offer shall be deemed to be an Asset Disposition Offer for purposes hereof);
(C) to reduce the outstanding principal amount of Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor;
(D) to acquire Additional Assets or other assets that replace the properties and/or assets subject to such Asset Disposition;
(E) to make investments and capital expenditures that are used or useful in a Related Business; or
(F) for the subject avoidance of such Asset Disposition doubt, any combination of the foregoing, in the case of clauses (A), (B) and are (C) other than Indebtedness owed to the Company or become Collateral in accordance with an Affiliate of the Security DocumentsCompany; provided, however, provided that entering into and not abandoning or rejecting a binding agreement commitment to acquire assets or property or make investments or capital expenditures to satisfy clause (D) or (E) shall be treated as a permitted application of Applicable Proceeds Net Available Cash from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”)commitment; provided further, further that (x) any Applicable Proceeds relating to an such acquisition or capital expenditure is consummated within 545 days after the later of the receipt of such Net Available Cash or the date of such Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable if such acquisition or capital expenditure is not consummated within the period set forth in subclause (x), the Net Available Cash not so applied will be deemed to constitute Excess Proceeds relating to an Asset Disposition under Section 4.06(b). Pending the final application of any Non-High Store Collateralsuch Net Available Cash, the Company or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Available Cash in any manner not prohibited by this Indenture. Notwithstanding the foregoing provisions of Equity Collateral of this Section 4.06, the Company and the Restricted Subsidiaries shall not be required to apply any Subsidiary of Propco Net Available Cash in accordance with this Section 4.06 except to the extent that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, the aggregate Net Available Cash from all Asset Dispositions which is not applied in each case applied (or committed to be applied) pursuant to accordance with this clause Section 4.06 exceeds $100,000,000.
(b) must be Any Net Available Cash that is not applied (or committed to be appliedinvested as provided in Section 4.06(a) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that shall constitute “Excess Proceeds”. When the aggregate amount of Applicable Excess Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than exceeds $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount100,000,000, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of Company or any Parity Lien ObligationsSubsidiary Guarantor elects, to all holders of such Parity Lien Equal Priority Obligations to purchase or redeem the maximum principal amount of the Securities and such Notes and Parity Lien Equal Priority Obligations, on a pro rata basisas applicable, that may be purchased out of the amount of such Excess Proceeds, if any, at an . The offer price, price in the case of the Notes, in cash in an amount any Asset Disposition Offer shall be equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), Securities or any such Equal Priority Obligations plus accrued and unpaid interest, if any (or such lesser price with respect interest to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offerpurchase, and shall be payable in cash in accordance with the procedures (including prorating in the event of oversubscription) set forth in this Indenture and or the agreement agreements governing the Parity Lien Obligations applicable Equal Priority Obligations. If the aggregate purchase price of Indebtedness tendered exceeds the amount of Excess Proceeds, the Trustee shall select the Indebtedness to be purchased on a pro rata basis but in minimum round denominations, which, in the case of the Securities, shall be denominations of $2,000 and in principal amount or integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any each Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To zero and, so long as all such Securities validly tendered and not withdrawn pursuant to such offer are purchased by the extent that Company in compliance with this Section 4.06, any portion of Net Available Cash or Applicable Proceeds payable in respect excess of the Notes is denominated in a currency other than Dollars, offer amount over the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting applied to purchase such portion into Dollars.
Securities (band such other Equal Priority Obligations) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will pursuant to such offer may be deemed to be cash:
(i) the assumption applied by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received Company for any purpose not prohibited by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Dispositionthis Indenture. The Company shall comply, to the extent that Propco applicable, with the requirements of Section 14(e) of the Exchange Act and each any other Subsidiary are released from any Guarantee of payment of such Indebtedness securities laws or regulations in connection with such Asset Disposition; and
(iv) consideration consisting the repurchase of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received Securities pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) 4.06. To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, regulations conflict with the provisions of this IndentureSection 4.06, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described under this Section 4.06 by virtue of its compliance with such securities laws or regulations. Nothing in this Indenture shall prevent the Company from making an Asset Disposition Offer earlier than required.
(c) (i) Promptly, and in any event within 10 days after the Company becomes obligated to make an Asset Disposition Offer, the Company shall be obligated to deliver to the Trustee and deliver electronically, in accordance with DTC procedures in the case of Global Securities, or send by virtue of compliance therewith. The Company first-class mail, to each Holder, a written notice stating that the Holder may rely on any no-action letters issued elect to have their Securities purchased by the SEC indicating that the staff of the SEC will not recommend enforcement action Company either in whole or in part (subject to prorating as described in 4.06(b) in the event the Asset Disposition Offer is oversubscribed) in integral multiples of $2,000 of principal amount or any whole integral multiple of $1,000 in excess thereof, at the applicable purchase price. The notice shall specify a tender offer satisfies certain conditions.
purchase date not less than 30 days nor more than 60 days after the date of such notice (dthe “Purchase Date”) The provisions and shall contain such information concerning the business of this Indenture relative the Company which the Company in good faith believes shall enable such Holders to make an informed decision (which at a minimum shall include (A) 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 and any Current Report on Form 8-K of the Company filed subsequent to such Quarterly Report, other than Current Reports describing Asset Dispositions otherwise described in the offering materials (or corresponding successor reports), (B) a description of material developments in the Company’s obligation business subsequent to make an offer the date of the latest of such reports, and (C) if material, appropriate pro forma financial information) and all instructions and materials necessary to repurchase tender Securities pursuant to the Notes as a result of an Asset Disposition may be waived or modified Offer, together with the written consent of the Holders of a majority address referred to in principal amount of the Notes then outstandingclause (iii) below.
Appears in 1 contract
Sources: Indenture (NCR Atleos, LLC)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco shall The Issuer and PNCC will not, and shall will not permit any of its their Restricted Subsidiaries to, make any Asset Disposition of Collateral unless:
(i) Propco PNCC, the Issuer or such Restricted Subsidiary, 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 Fair Market Value (such fair market value Fair Market Value to be determined on as of the date of contractually agreeing to such Asset Disposition), as determined in good faith by Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected Good Faith by the CompanyIssuer (including as to the value of all non-cash consideration), of the securities and assets Collateral subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 7585% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) Disposition received by Propco PNCC, the Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash or (A) cash, (B) Cash Equivalents; provided that, (C) Additional Assets of a type which would constitute (x) Notes Collateral in the case of an Asset Disposition of Real Property Collateral, or of Equity Notes Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not and (y) ABL Collateral in the form case of cash an Asset Disposition of ABL Collateral (which are thereupon with their acquisition added to the Collateral securing the Notes) or Cash Equivalents must satisfy (D) any combination of the requirements of a Permitted Asset Swap; andforegoing;
(iii) within 365 days from to the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash extent that any consideration from such Asset Disposition (as may be extended Dispositions received by an Acceptable Commitment as set forth belowPNCC, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco Issuer or any a Restricted Subsidiary, as the case may be, elects:constitutes securities or other assets that are of a type or class that constitute Collateral, such securities or other assets, including the assets of any Person that becomes a Guarantor as a result of such transaction, are concurrently with their acquisition added to the Collateral securing the Notes (as Notes Collateral or ABL Collateral, as applicable) in the manner provided for in this Indenture or any of the Collateral Documents; and
(Aiv) the Net Available Cash from any such Asset Disposition of Collateral is paid directly by the purchaser thereof to the Collateral Agent to be held in trust in a Collateral Account for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (application in accordance with this covenant. In the procedures set forth below for event that PNCC, the Issuer or a Restricted Subsidiary receives Net Available Cash from an individual Asset Disposition Offer) of Collateral relating to redeem a ratable the Collateral in an aggregate amount of Notes less than $10 million, and subject to the terms of the Intercreditor Agreements and the ABL Facility, any Net Available Cash deposited into the Collateral Account from such Asset Disposition of Collateral relating to Collateral (as described below) may be withdrawn by PNCC, the Issuer or a Restricted Subsidiary to be invested by PNCC, the Issuer or such Restricted Subsidiary in Section 5.6 or purchase a ratable amount Additional Assets that would constitute (x) Notes Collateral in the case of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco Notes Collateral and (iy) to invest (including capital expenditures) in Additional Assets that are or will become ABL Collateral in accordance with the Security Documents (including by means case of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; providedof ABL Collateral, however, that a binding agreement shall be treated as a permitted application within 365 days of Applicable Proceeds from the date of such commitment Asset Disposition, which Additional Assets are thereupon with their acquisition added to the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with securing the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination Notes. All of the foregoing; provided that Propco (Net Available Cash received by PNCC, the Issuer or any Subsidiary of Propcosuch Restricted Subsidiary, as the case may be) , from any Recovery Event relating to Collateral shall be deposited directly into the Collateral Account. Subject to the terms of the Intercreditor Agreements and the ABL Facility, any Net Available Cash deposited into the Collateral Account from any Recovery Event relating to Collateral may elect be withdrawn by PNCC, the Issuer or a Restricted Subsidiary to invest be invested by PNCC, the Issuer or such Restricted Subsidiary, as the case may be, to be invested in Additional Assets (which may include performance of a restoration of the affected Collateral) that are or become would constitute (x) Notes Collateral in accordance the case of a Recovery Event in respect of Notes Collateral and (y) ABL Collateral in the case of a Recovery Event in respect of ABL Collateral, within 365 days of the date of such Recovery Event, which Additional Assets are thereupon with their acquisition added to the Security Documents and otherwise in compliance with Collateral securing the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Notes. Any Net Available Cash from an individual Asset Disposition (provided of Collateral that such investment shall be made no earlier than the earliest of notice is equal to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds or in excess of $100 10.0 million (such amount, the shall be deemed “Excess Mandatory Offer Collateral Proceeds”), then the Company or a Subsidiary shall . The Issuer will be required to make an offer with any such Mandatory Offer Collateral Proceeds (an “Asset Mandatory Collateral Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders to purchase the maximum principal amount of the Notes (on a pro rata basis) and, if required by the terms of any Parity other Pari Passu Lien Obligations, to all the holders of such Parity Pari Passu Lien Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, (on a pro rata basis), to which the Mandatory Collateral Disposition Offer applies that may be purchased out of such Excess the Mandatory Offer Collateral Proceeds, if any, at an offer price, in the case of the Notes, price in cash in an amount equal to 100% of the principal amount thereof (or in of the event Notes and such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof)Pari Passu Lien Obligations, plus accrued and unpaid interest, if any (or such lesser price with respect interest to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offerpurchase, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations a principal amount of $2,000 and in or an integral multiples multiple of $1,000 in excess thereof. To thereof with respect to the Notes; provided, however, that to the extent that any Applicable the Mandatory Offer Collateral Proceeds from relate to an Asset Disposition are from of ABL Collateral, the Issuer may, prior to making a disposition Mandatory Collateral Disposition Offer, make a prepayment with respect to the maximum principal amount of Indebtedness that is secured by such ABL Collateral on a priority basis relative to the fair market value Notes that may be prepaid out of which exceeds $10.0 million such Mandatory Offer Collateral Proceeds (and to correspondingly reduce commitments with respect thereto), at a price in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant cash in an amount equal to clause (3) above or the immediately preceding paragraph and, in the case 100% of the immediately preceding paragraphprincipal amount of such Indebtedness, released plus accrued and unpaid interest to Propco or the date of prepayment, with any Subsidiary of Propco if remaining after consummation of the Asset Disposition Mandatory Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but Collateral Proceeds not more than 60 days before the purchase date used to each Holder of the Notes at prepay such Holder’s registered address or otherwise Indebtedness offered to Holders in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indentureparagraph. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations so validly tendered or otherwise surrendered in connection with an Asset and not properly withdrawn pursuant to a Mandatory Collateral Disposition Offer is less than the amount offered in an Asset Disposition Mandatory Offer (or, in the case of an Advance OfferCollateral Proceeds, the Advance Portion), the Company or any Subsidiary Issuer may use any remaining Excess Proceeds (or, such funds for general corporate purposes subject to the other covenants contained in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset such Mandatory Collateral Disposition Offer, the amount of Excess Mandatory Offer Collateral Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Senior Secured Notes Indenture (Postmedia Network Canada Corp.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco shall The Company will not, and shall will not permit any of its the Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco the Company or such Restricted Subsidiary, 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 Propco the Board of Directors or senior management of the Company (and, in including as to the case value of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than all non-cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Companyconsideration), of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii2) in any such Asset Disposition (except to the extent unless the Asset Disposition is a Permitted Asset Swap), at least 7575.0% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date Disposition (on a cumulative basis), (including excluding any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, other than Indebtedness) received by Propco the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and
(iii3) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt an amount equal to 100.0% of the Net Available Cash from such Asset Disposition is applied by the Company or such Restricted Subsidiary, as the case may be:
(as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”A) is applied, to the extent Propco the Company or any Restricted Subsidiary, as the case may be, elects:
elects (A) for or is required by the Company or terms of any Subsidiary of the Company (i) Indebtedness), to reduce, prepay, repay or purchase Senior Indebtedness of the Company, the Issuer (including the Notes) or any Parity Lien Obligations Subsidiary Guarantor or Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor (in each case other than the Notes); provided that Indebtedness owed to the Company or a Subsidiary shall use a ratable amount to offer (in accordance with an Affiliate of the procedures set forth below for an Company) within 365 days from the later of the date of such Asset Disposition Offeror the receipt of such Net Available Cash; provided, however, that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (A), the Company, the Issuer or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) to redeem a ratable be permanently reduced in an amount of Notes as described in Section 5.6 equal to the principal amount so prepaid, repaid or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,purchased; or
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco the extent the Company or any such Restricted Subsidiary of Propco (i) elects to invest (including capital expenditures) in or commit to invest in Additional Assets that are or will become Collateral in accordance with within 365 days from the Security Documents (including by means later of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject date of such Asset Disposition and are or become Collateral in accordance with the Security Documentsreceipt of such Net Available Cash; provided, however, that any such reinvestment in Additional Assets made pursuant to a binding definitive agreement shall be treated or a commitment approved by the Board of Directors or senior management of the Company that is executed or approved within such time will satisfy this requirement, so long as a permitted application of Applicable Proceeds from the date such investment is consummated within 6 months of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing365th day; provided that Propco (or pending the final application of any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and Net Available Cash in accordance with clause (bA) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicableB) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portionthis Section 4.10(a)(3), the Company or any such Restricted Subsidiary may use temporarily reduce Indebtedness or otherwise invest such Net Available Cash in any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose manner not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) Any Net Available Cash from Asset Dispositions that is not applied or invested or committed to be applied as provided in the preceding paragraph will be deemed to constitute “Excess Proceeds”. On the 366th day after an Asset Disposition, if the aggregate amount of Excess Proceeds exceeds £250.0 million, the Issuer will be required to make an Asset Disposition Offer in accordance with Section 3.12.
(c) For the purposes of clauses (i) and (ii) of this Section 3.5(a)4.10, the following will be deemed to be cash:
(i1) the assumption by the transferee of Indebtedness (other than Subordinated Obligations) of the Company or other liabilities, contingent any Subsidiary Guarantor or otherwise, Indebtedness of Propco or a Restricted Subsidiary that is not a Subsidiary or Guarantor and the release of Propco the Company, such Subsidiary Guarantor or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset DispositionDisposition (in which case the Issuer will, without further action, be deemed to have applied such deemed cash to Indebtedness in accordance with Section 4.10(a)(3)(A);
(ii2) securities, notes or other obligations received by Propco the Company or any Restricted Subsidiary from the transferee that are converted convertible by Propco the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii3) Indebtedness of any Restricted Subsidiary of Propco that is no longer a Restricted Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco the Company and each other Restricted Subsidiary are released from any Guarantee guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; and;
(iv4) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not Indebtedness of the Company or any Subsidiary of the Company; andRestricted Subsidiary;
(v5) any Designated Non-Cash Consideration received by Propco the Company or any Restricted Subsidiary in such Asset Dispositions Disposition having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, value not to exceed $50 million, 25.0% of the consideration from such Asset Disposition (excluding any consideration received from such Asset Disposition in accordance with clauses (1) to (4) of this Section 4.10(c)) (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value); and
(6) in addition to any Designated Non-Cash Consideration received pursuant to Section 4.10(c)(5), any Designated Non-Cash Consideration received by the Company or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 4.10(c)(6) that is at that time outstanding, not to exceed the greater of £250.0 million and 5.0% of Total Assets (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value).
(cd) The Issuer 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 this Indenture. To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, regulations conflict with the provisions of this IndentureSection 4.10, the Company shall Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in under this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditionsconflict.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (Liberty Global PLC)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Parent Guarantor shall not, and shall not permit the Company or any of its Subsidiaries other Restricted Subsidiary to, make consummate any Asset Disposition unless:
(i) Propco the consideration the Parent Guarantor or such Subsidiary, as the case may be, Restricted Subsidiary 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company), of the securities and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swapnot less than the Fair Market Value of the assets sold (as determined by the Board of Directors), unless ; and
(ii) at least 80% of the consideration the Parent Guarantor or the relevant Restricted Subsidiary receives in respect of such Asset Disposition occurred in connection with a governmental takingconsists of cash. For the purpose of this covenant, the following are deemed to be cash:
(i) cash or Temporary Cash Investments;
(ii) the assumption or discharge of Indebtedness of the Parent Guarantor or any Restricted Subsidiary (other than Indebtedness (A) between and among the Parent Guarantor and a Restricted Subsidiary, (B) owed to an Affiliate of the Parent Guarantor or (C) that is subordinated to the Notes or any Guarantee) and the release of the Parent Guarantor or any Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset Disposition;
(iii) Indebtedness (other than Indebtedness (A) between and among the Parent Guarantor and a Restricted Subsidiary, (B) owed to an Affiliate of the Parent Guarantor or (C) that is subordinated to the Notes or any Guarantee) of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition (except to the extent that the Asset Disposition is a Permitted Asset Swap)Parent Guarantor and the Restricted Subsidiaries, at least 75% of the consideration from following such Asset Disposition, together are released from any Guarantee of such Indebtedness in connection with all such Asset Disposition;
(iv) consideration consisting of Indebtedness of the Parent Guarantor or any Restricted Subsidiary or Preferred Stock of a Restricted Subsidiary that is either repaid in full or cancelled in connection with such Asset Disposition;
(v) securities or other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) obligations received by Propco the Parent Guarantor or any Restricted Subsidiary from the transferee that can be converted by the Parent Guarantor or such Subsidiary, as the case may be, is in the form of Restricted Subsidiary into cash or Temporary Cash Equivalents; provided thatInvestments within 90 days of receipt thereof, in to the case extent of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Temporary Cash Equivalents must satisfy the requirements of a Permitted Asset SwapInvestments actually received in that conversion; and
(iiivi) within 365 days from all or substantially all of the later of (A) the date of such assets of, or Capital Stock of, a Person received as consideration in an Asset Disposition and if, after giving effect to any such receipt of Capital Stock, the Person is or becomes a Restricted Subsidiary.
(Bb) Within 90 days after the receipt of the any Net Available Cash Proceeds from such an Asset Disposition (as may be extended by an Acceptable Commitment as set forth belowDisposition, the “Proceeds Application Period”), an amount equal to Parent Guarantor or such Restricted Subsidiary may use such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) Proceeds to make an offer (investment in accordance with or expenditure for Additional Assets. Any Net Cash Proceeds from Asset Dispositions that are not applied or invested as provided in the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,preceding paragraph shall be deemed to constitute “Excess Proceeds.”
(Bc) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that When the aggregate amount of Applicable Excess Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amountexceeds €5 million, the “Excess Proceeds”), then Parent Guarantor or the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes andshall, if required by the terms of any Parity Lien Obligationswithin 15 Business Days, to all holders of such Parity Lien Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, prepay on a pro rata basis, that may be purchased out basis to each Holder’s holdings thereof an aggregate principal amount of Notes (in a principal amount equal to 100% of such Excess Proceeds, if any, ) at an offer price, in the case of the Notes, a purchase price in cash in an amount equal to 100% of the principal amount thereof thereof; provided that
(or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 i) after €275 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder aggregate principal amount of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicablehave been repaid, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of subsequent Excess Proceeds shall be reset at zero. To applied pro rata to repay outstanding amounts under the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of Super-Priority Subscription Agreement Documents, the Notes is denominated in a currency other than Dollars, and the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;Senior Unsecured Notes; and
(ii) securitiesif a default occurs and is continuing under the Super-Priority Subscription Agreement Documents, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to Excess Proceeds shall be satisfied for cash and Cash Equivalents (applied to the extent repayment of debt under the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of Super-Priority Subscription Agreement Documents before any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary Notes are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received repaid pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions4.09.
(d) The provisions Parent Guarantor or the Company shall purchase the Notes in whole or in part in integral multiples of €1,000.
(e) All prepayments under this Indenture relative Section 4.09 shall be made together with accrued interest to the Company’s obligation to make an offer to repurchase date of such prepayment on the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount prepaid.
(f) Pending the final application of any Net Cash Proceeds pursuant to this Section 4.09, the Notes then outstandingParent Guarantor or applicable Restricted Subsidiary may apply such Net Proceeds temporarily to reduce Debt Outstanding under a revolving credit facility or otherwise invest such Net Proceeds in Temporary Cash Investments.
Appears in 1 contract
Sources: Senior Secured Facility Agreement (TPG Advisors IV, Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco shall The Company and any Permitted Affiliate Parent will not, and shall will not permit any of its the Restricted Subsidiaries to, without the consent of the Required Lenders, make any Asset Disposition unless:
(i1) Propco the Company, such Permitted Affiliate Parent or such Restricted Subsidiary, 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 conclusively in good faith by Propco the Board of Directors or senior management of the Company or such Permitted Affiliate Parent (and, in including as to the case value of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than all non-cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Companyconsideration), of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii2) in any such Asset Disposition (except to the extent unless the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date Disposition (on a cumulative basis), (including excluding any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, other than Indebtedness) received by Propco the Company, such Permitted Affiliate Parent or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and
(iii3) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco reinvested or any Subsidiary, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status andprepay the Loans, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicableSection 2.05(b)(ii) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into DollarsAgreement.
(b) For the purposes of clauses (i) and (ii) of this Section 3.5(a)4.10, the following will be deemed to be cash:
(i1) the assumption by the transferee of Indebtedness (other than Subordinated Obligations) of any Loan Party or other liabilities, contingent or otherwise, Indebtedness of Propco or a Restricted Subsidiary or that is not a Loan Party and the release of Propco such Loan Party or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii2) securities, notes or other obligations received by Propco the Company, a Permitted Affiliate Parent or any Restricted Subsidiary from the transferee that are converted convertible by Propco the Company, such Permitted Affiliate Parent or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii3) Indebtedness of any Restricted Subsidiary of Propco that is no longer a Restricted Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco the Company, any Permitted Affiliate Parent and each other Restricted Subsidiary are released from any Guarantee guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; and;
(iv4) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary Indebtedness of the Company; and, a Permitted Affiliate Parent or any Restricted Subsidiary;
(v5) any Designated Non-Cash Consideration received by Propco the Company, a Permitted Affiliate Parent or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, value not to exceed $50 million, 25.0% of the consideration from such Asset Disposition (excluding any consideration received from such Asset Disposition in accordance with Section 4.10(b)(1) to Section 4.10(b)(4)) (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.); and
(c6) To in addition to any Designated Non-Cash Consideration received pursuant to Section 4.10(b)(5), any Designated Non-Cash Consideration received by the extent Company, a Permitted Affiliate Parent or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 4.10(b)(6) that is at that time outstanding, not to exceed the provisions greater of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict $250.0 million and 5.0% of Total Assets (with the provisions fair market value of this Indenture, each item of Designated Non-Cash Consideration being measured at the Company shall not be deemed time received and without giving effect to have breached its obligations described subsequent changes in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditionsvalue).
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i) Propco : the Borrower or such Restricted Subsidiary, 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company), Borrower of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
(ii) ; in any such Asset Disposition Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap)) with a purchase price in excess of the (x) prior to the Conversion Date, $150.0 million and (y) after the Conversion Date, the greater of $150.0 million and 5.5% of LTM EBITDA, at least 7575.0% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Closing Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco the Borrower or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided thatEquivalents (which determination may be made by the Borrower, in the case of an Asset Disposition of Real Property Collateralat its option, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and
either (iiix) within 365 days from the later of (A) on the date of contractually agreeing to such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of time the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portionis completed). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes ; and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco the Borrower or a Restricted Subsidiary (other than Disqualified Stock, Subordinated Indebtedness of the Borrower or a Guarantor or Preferred Stock of a Guarantor) or the release of Propco the Borrower or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) ; securities, notes or other obligations received by Propco the Borrower or any Restricted Subsidiary from the transferee that are converted by Propco by, the Borrower or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 270 days following the closing of such Asset Disposition;
(iii) ; Indebtedness of any Restricted Subsidiary of Propco that is no longer a Restricted Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco the Borrower and each other Restricted Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt Indebtedness of the Borrower (other than Disqualified Stock or Subordinated Indebtedness) received after the Issue Conversion Date from Persons who are not the Company Borrower or any Subsidiary of the CompanyRestricted Subsidiary; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Libor Hardwire Transition Amendment (Frontier Communications Parent, Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco From and after the Escrow Release Date, the Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco the Issuer or such Restricted Subsidiary, as the case may beapplicable, 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company)Issuer, of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
(ii2) in any such Asset Disposition Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap), with a purchase price in excess of the greater of (x) $60.0 million and (y) 20.0% of LTM EBITDA, at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Escrow Release Date as to which this clause (2) applies (on a cumulative basis), received by the Issuer or such Restricted Subsidiary, as applicable, is in the form of cash or Cash Equivalents; provided that, for purposes of this clause (2), the following shall be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities (including by way of relief from, or by any other Person assuming responsibility for, any such Indebtedness or other liabilities, contingent or otherwise) of the Issuer or a Restricted Subsidiary (other than Subordinated Indebtedness of the Issuer or a Guarantor) or the release of the Issuer or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations or other property received by Propco the Issuer or any Restricted Subsidiary from the transferee that are converted by the Issuer or such Subsidiary, as the case may be, is in the form of Restricted Subsidiary into cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy received), in each case, within 365 days following the requirements closing of such Asset Disposition;
(iii) Indebtedness of any Restricted Subsidiary that is no longer a Permitted Restricted Subsidiary as a result of such Asset SwapDisposition, to the extent that, immediately following such Asset Disposition, neither the Issuer nor any other Restricted Subsidiary Guarantees the payment of such Indebtedness;
(iv) consideration consisting of Indebtedness of the Issuer (other than Subordinated Indebtedness) received after the Escrow Release Date from Persons who are not the Issuer or any Restricted Subsidiary; and
(iiiv) any Designated Non-Cash Consideration received by the Issuer or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this covenant that is at that time outstanding, not to exceed the greater of (x) $67.5 million and (y) 22.5% of LTM EBITDA, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value; and
(3) within 365 540 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to the Applicable Percentage of such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco the Issuer or any Restricted Subsidiary, as the case may beapplicable, elects:
(Ai) for the Company or any Subsidiary of the Company (ia) to reduce, prepay, repay or purchase any Parity Lien Obligations Secured Indebtedness, including Indebtedness under the Credit Agreement (other than the Notesor any Refinancing Indebtedness in respect thereof), (b) to reduce, prepay, repay or purchase Pari Passu Indebtedness; provided that in connection with this subclause (b), the Company or a Subsidiary shall use a ratable amount to offer Issuer ratably repays the Notes, (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (iic) to make an offer (in accordance with the procedures set forth below for pursuant to an Asset Disposition Offer) to redeem Notes pursuant to Section 5.07 or purchase Notes; or (d) to reduce, prepay, repay or purchase any Indebtedness of a Non-Guarantor (in each case, other than Indebtedness owed to the Issuer or any Restricted Subsidiary); provided that to the extent the Issuer or any Restricted Subsidiary makes an offer to reduce, prepay, repay or purchase any obligations pursuant to the foregoing subclauses (a)-(d) at a price no less than 100% of the principal amount thereof, to the extent the relevant creditors do not accept such offering, the Issuer and the Restricted Subsidiaries will be deemed to have applied an amount of the Applicable Proceeds equal to such amount not so accepted in such offer, and such amount shall not increase the amount of Excess Proceeds (and such amount shall instead constitute Declined Excess Proceeds); provided, however, that, in connection with any reduction, prepayment, repayment or purchase of Indebtedness pursuant to this clause (i), redeem Notes as described the Issuer or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (other than obligations in Section 5.6 respect of any asset-based credit facility to the extent the assets sold or purchase Notes through open-market purchases otherwise disposed of in connection with such Asset Disposition constituted “borrowing base assets”) to be reduced in an amount equal to the principal amount so reduced, prepaid, repaid or in privately negotiated transactions,purchased;
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (ia) to invest (including capital expenditures) in or commit to invest in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of PropcoRestricted Subsidiary); or (iib) to invest (including capital expenditures) in any one or more businesses, properties or assets that replace the businesses, properties and/or assets that are the subject of such Asset Disposition and are Disposition, with any such investment made by way of a capital or become Collateral in accordance with other lease valued at the Security Documentspresent value of the minimum amount of payments under such lease (as reasonably determined by the Issuer); provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days after the end of such commitment 540-day period (an “Acceptable Commitment”); provided further, that ;
(x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be appliediii) to invest in make any other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store CollateralInvestment; or
(Civ) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (1) pending the final application of the amount of any such Applicable Proceeds pursuant to this Section 3.05, the Issuer or the applicable Restricted Subsidiaries may apply such Applicable Proceeds temporarily to reduce Indebtedness (including under the Credit Facilities) or otherwise apply such Applicable Proceeds in any manner not prohibited by this Indenture, and (2) the Issuer (or any Subsidiary of PropcoRestricted Subsidiary, as the case may beapplicable) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (bii) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative remains Applicable Proceeds in excess of the greater of (i) $100 90.0 million and (ii) 30.0% of LTM EBITDA (such amountamount of Applicable Proceeds that are equal to the greater of (i) $90.0 million and (ii) 30.0% of LTM EBITDA, “Declined Excess Proceeds,” and such amount of Applicable Proceeds that are in excess of the greater of (i) $90.0 million and (ii) 30.0% of LTM EBITDA, “Excess Proceeds”), then subject to the Company or a Subsidiary limitations with respect to Foreign Dispositions set forth below, the Issuer shall make an offer (an “Asset Disposition Offer”) no later than ten business days Business Days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien ObligationsPari Passu Indebtedness, to all holders of such Parity Lien Obligations Pari Passu Indebtedness, to purchase the maximum principal amount of such Notes and Parity Lien ObligationsPari Passu Indebtedness, as appropriate, on a pro rata basis, that may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations Pari Passu Indebtedness, if any, as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations Pari Passu Indebtedness, as applicable, in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first first-class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address address, with a copy to the Trustee, or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary Issuer may satisfy the foregoing obligation with respect to any the Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. .
(b) To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations Pari Passu Indebtedness validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer made with Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion)) is less than the amount offered in an Asset Disposition Offer, the Company or any Subsidiary Issuer may use include any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “in Declined Excess Proceeds”) , and use such Declined Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations Pari Passu Indebtedness validly tendered pursuant to an any Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company Issuer shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations Pari Passu Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien ObligationsPari Passu Indebtedness; provided that no Notes or Parity Lien Obligations other Pari Passu Indebtedness will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Applicable Proceeds and Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco the Issuer upon converting such portion into Dollars.
(bc) For the purposes Notwithstanding any other provisions of clauses this Section 3.05, (i) and (ii) to the extent that any of Section 3.5(a), or all the following will be Net Available Cash or Applicable Proceeds of any Asset Disposition is received or deemed to be cash:
received by a Non-U.S. Subsidiary (i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a U.S. Subsidiary of a Non-U.S. Subsidiary) (a “Foreign Disposition”) giving rise to a prepayment event described above is (x) prohibited, restricted or the release delayed by applicable local law, rule or regulation (including, without limitation, (a) financial assistance and corporate benefit restrictions and (b) fiduciary and statutory duties of Propco any director or officer of such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
Subsidiaries), (iiy) securities, notes or other obligations received restricted by Propco applicable organizational documents or any Subsidiary from the transferee that are converted by Propco agreement or such Subsidiary into cash (z) subject to other onerous organizational or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received)administrative impediments, in each case, within 180 days following from being repatriated or otherwise paid to the closing Issuer or so prepaid, or such repatriation or payment or prepayment would present a material risk of liability for the applicable Subsidiary or its directors or officers (or gives rise to a material risk of breach of fiduciary or statutory duties by any director or officer), an amount equal to the portion of such Asset Disposition;
Net Available Cash so affected will not be required to be applied in compliance with this Section 3.05; and (iiiii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from the Issuer has determined in good faith that repatriation of any Guarantee of payment or all the Net Available Cash of any Foreign Disposition could have an adverse Tax consequence (which for the avoidance of doubt, includes, but is not limited to, any prepayment out of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting Net Available Cash whereby doing so the Issuer, any of Parity Lien Debt received after the Issue Date from Persons who are not the Company its Subsidiaries, any Parent Entity or any Subsidiary of their respective affiliates and/or equity owners would incur a Tax liability, including a taxable dividend) (as determined by the Issuer in good faith), an amount equal to the Net Available Cash so affected will not be required to be applied in compliance with this Section 3.05. The non-application of any prepayment amounts as a consequence of the Company; and
(v) any Designated Non-Cash Consideration received by Propco foregoing provisions will not, for the avoidance of doubt, constitute a Default or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value Event of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in valueDefault.
(cd) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company Issuer shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company Issuer may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(de) The provisions of this Indenture relative to the CompanyIssuer’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (Knife River Holding Co)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Issuer shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco the Issuer or such Restricted Subsidiary, 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 Propco (and, in the case Board of an Asset Disposition Directors of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company)Issuer, of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
(ii2) in any such Asset Disposition Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), Disposition (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco the Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided and
(3) the Issuer or any of its Restricted Subsidiaries, at its respective option, will apply such Net Available Cash from any Asset Disposition:
(a) (i) to prepay, repay or purchase any Indebtedness of a Non-Guarantor or that is secured by a Lien (in each case, other than Indebtedness owed to the Issuer or any Restricted Subsidiary) or Indebtedness under the Credit Agreement (or any Refinancing Indebtedness in respect thereof) within 450 days from the later of (a) the date of such Asset Disposition and (b) the receipt of such Net Available Cash; provided, however, that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (i), the case Issuer or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) to be reduced in an amount equal to the principal amount so prepaid, repaid or purchased; or (ii) to prepay, repay or purchase Pari Passu Indebtedness; provided, further, that, to the extent the Issuer redeems, repays or repurchases Pari Passu Indebtedness pursuant to this clause (ii), the Issuer shall equally and ratably reduce Obligations under the Notes as provided under Section 5.7, 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 Asset Disposition Offer) to all Holders to purchase their Notes at 100% of Real Property Collateralthe principal amount thereof, or plus the amount of Equity Collateral accrued but unpaid interest, if any, on the amount of any Subsidiary of Propco Notes that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swapwould otherwise be prepaid; andor
(iiib) to invest in or commit to invest in Additional Assets (including by means of an investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received by the Issuer or another Restricted Subsidiary) within 365 450 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security DocumentsCash; provided, however, that any such reinvestment in Additional Assets made pursuant to a definitive binding agreement shall be treated or a commitment approved by the Board of Directors of the Issuer that is executed or approved within such time will satisfy this requirement, so long as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment investment is consummated within 180 365 days of such commitment (an “Acceptable Commitment”)450th day; provided furtherthat, that (x) any Applicable Proceeds relating to an Asset Disposition pending the final application of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and Net Available Cash in accordance with clause (bi) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million or clause (such amountii) above, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum principal amount of such Notes Issuer and Parity Lien Obligations, on a pro rata basis, that its Restricted Subsidiaries may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other temporarily reduce Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise use such Net Available Cash in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose manner not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (Churchill Downs Inc)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Parent Guarantor shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco the Parent Guarantor or such Restricted Subsidiary, 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company)Parent Guarantor, of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
(ii2) in any such Asset Disposition Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap)) with a purchase price in excess of $100 million and 10.0% of LTM EBITDA, at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), Disposition (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco the Parent Guarantor or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided thatprovided, in however, to the case of extent that any assets subject to an Asset Disposition of Real Property were Collateral, or of Equity the non-cash consideration received is pledged as Collateral of any Subsidiary of Propco that ownsunder the Collateral Documents substantially simultaneously with such sale, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy accordance with the requirements of a Permitted Asset Swapthis Indenture and the Collateral Documents; and
(iii3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied, either:
(i) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:Cash,
(A) for the Company or any Subsidiary of the Company (ia) to reduce, prepay, repay or purchase any Parity Indebtedness that is secured by a First Priority Lien (including, to the extent secured by a First Priority Lien, the Indebtedness under the Credit Agreement or ABL Credit Agreement incurred pursuant to SECTION 3.2(a) (or any Refinancing Indebtedness in respect thereof)); or
(b) to reduce Obligations under the Notes as provided under SECTION 5.7, through open market purchases or by making an Asset Disposition Offer; or
(other than the Notes)c) to prepay, repay or purchase Pari Passu Indebtedness; provided that the Company Parent Guarantor or a Subsidiary such Restricted Subsidiary, as applicable, shall use a ratable amount to offer equally and ratably reduce Obligations under the Notes (in accordance with the procedures set forth below for A) through open market purchases, (B) by redeeming Notes as provided under SECTION 5.7, or (C) by making an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or ; or
(ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco extent the Parent Guarantor or any Restricted Subsidiary of Propco (i) elects to invest (including capital expenditures) in or commit to invest in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco a Restricted Subsidiary equal to the amount of Net Available Cash received by the Parent Guarantor or a Subsidiary another Restricted Subsidiary) within 365 days from the later of Propco); or (iia) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject date of such Asset Disposition and are or become Collateral in accordance with (b) the Security Documentsreceipt of such Net Available Cash; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds Net Available Cash from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds Net Available Cash will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition event of any Non-High Store CollateralAcceptable Commitment is later cancelled or terminated for any reason before such amount is applied in connection therewith, the Parent Guarantor or such Restricted Subsidiary enters into another Acceptable Commitment (a “Second Commitment”) within 180 days of Equity Collateral of any Subsidiary of Propco that owns, directly such cancellation or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documentstermination; provided further that if any Second Commitment is later cancelled or terminated for any reason before such amount is applied, then such Net Available Cash shall constitute Excess Proceeds; provided that, (1) pending the aggregate final application of the amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral any such Net Available Cash in accordance with clauses (i) and (ii) of SECTION 3.5(a)(3), the Security Documents shall be no greater than $180 million after the Issue DateParent Guarantor and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise use such Net Available Cash in any manner not prohibited by this Indenture; and provided further that (2) the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco Parent Guarantor (or any Subsidiary of PropcoRestricted Subsidiary, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds Net Available Cash attributable to any given Asset Disposition (provided that if the assets subject to the disposition constituted Collateral, such Additional Assets are pledged as Collateral under the Collateral Documents substantially simultaneously with such acquisition in accordance with the requirements of this Indenture and the Collateral Documents) such investment shall be made no earlier than the earliest of written notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (bSECTION 3.5(a)(3)(ii) above with respect to such Asset Disposition. If, with respect .
(b) The amount of any Net Available Cash from Asset Dispositions that is not applied or invested or committed to any Asset Disposition, at be applied or invested as provided in the expiration of the Proceeds Application Period with respect preceding paragraph will be deemed to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the constitute “Excess Proceeds”)” under this Indenture. On the day following 18 months after the later of an Asset Disposition or the receipt of such Net Available Cash, then or earlier if the Company or a Subsidiary shall Parent Guarantor elects, if the aggregate amount of Excess Proceeds under this Indenture exceeds $75 million, the Parent Guarantor will within 10 Business Days be required to make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes issued under this Indenture and, if required by to the terms of any Parity Lien Obligationsextent the Parent Guarantor elects, to all holders of such Parity Lien Obligations other outstanding Pari Passu Indebtedness, to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, any such Pari Passu Indebtedness to which the Asset Disposition Offer applies that may be purchased out of such the Excess Proceeds, if any, at an offer price, price in the case respect of the Notes, in cash Notes in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof)Notes and Pari Passu Indebtedness, in each case, plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness)any, to, but not including, the date fixed for the closing of such offerpurchase, in accordance with the procedures set forth in this Indenture and or the agreement agreements governing the Parity Lien Obligations Pari Passu Indebtedness, as applicable, and, with respect to the Notes, in minimum denominations of $2,000 100.00 and in integral multiples of $1,000 in excess thereof1.00. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition The Parent Guarantor will deliver notice of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (orelectronically or by first-class mail, in with a copy to the case of an Advance OfferTrustee, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at the address of such Holder’s registered address Holder appearing in the security register or otherwise in accordance with the applicable procedures of DTC, describing the transaction or transactions that constitute the Asset Disposition and offering to repurchase the Notes for the specified purchase price on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is delivered, pursuant to the procedures required by this Indenture and described in such notice. The Company or a Subsidiary Parent Guarantor may satisfy the foregoing obligation obligations with respect to any Applicable Proceeds Net Available Cash from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all Net Available Cash within the relevant 365 day period (or a part of the Applicable Proceeds such longer period provided above) or with respect to any unapplied Excess Proceeds.
(the “Advance Portion”c) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations and Pari Passu Indebtedness so validly tendered or otherwise surrendered in connection with and not properly withdrawn pursuant to an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance OfferExcess Proceeds, the Advance Portion), the Company or any Subsidiary Parent Guarantor may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an surrendered in any Asset Disposition Offer by Holders and other Pari Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds (orProceeds, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds shall be allocated among the Notes and Parity Lien Obligations Pari Passu Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; Pari Passu Indebtedness, provided that no Notes or Parity Lien Obligations other Pari Passu Indebtedness will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. Additionally, the Parent Guarantor may, at its option, make an Asset Disposition Offer using proceeds from any Asset Disposition at any time after the consummation of such Asset Disposition. Upon consummation or expiration of any Asset Disposition Offer, any remaining Net Available Cash shall not be deemed Excess Proceeds and the Parent Guarantor may use such Net Available Cash for any purpose not prohibited by this Indenture.
(d) To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco the Parent Guarantor upon converting such portion into Dollars. Notwithstanding any other provisions of SECTION 3.5,
(i) (A) to the extent that any of or all the Net Available Cash of any Asset Disposition by a Foreign Subsidiary (a “Foreign Disposition”) is prohibited or delayed by applicable local law or subject to other onerous organizational or administrative impediments (as determined in good faith by the Parent Guarantor), from being repatriated to the United States, the portion of such Net Available Cash 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 so long, but only so long, as the applicable local law, documents or administrative impediments will not permit repatriation to the United States, provided that the Parent Guarantor hereby agrees to use reasonable efforts to otherwise cause the applicable Foreign Subsidiary to within one year following the date on which the respective payment would otherwise have been required, promptly take all actions reasonably required by the applicable local law or other impediment to permit such repatriation; and (B) if within one year following the date on which the respective payment would otherwise have been required, such repatriation of any of such affected Net Available Cash is permitted under the applicable local law or other impediment, such repatriation will be promptly effected and the amount of such repatriated Net Available Cash will be promptly (and in any event not later than five (5) Business Days after such repatriation could be made) applied (whether or not repatriation actually occurs) in compliance with this covenant; and
(ii) to the extent that the Parent Guarantor has determined in good faith that repatriation of any of or all the Net Available Cash of any Foreign Disposition would have an adverse Tax consequence (which for the avoidance of doubt, includes, but is not limited to, any prepayment whereby doing so the Parent Guarantor, any Restricted Subsidiary, or any of their respective affiliates and/or equity owners would incur a tax liability, including as a result of a tax dividend, deemed dividend or a withholding tax, but taking into account any corresponding or related foreign tax credit or other similar benefit that may be available, the Net Available Cash so affected may be retained by the applicable Foreign Subsidiary. The non-application of any prepayment amounts as a consequence of the foregoing provisions will not, for the avoidance of doubt, constitute a Default or an Event of Default.
(be) For the purposes of clauses (iSECTION 3.5(a)(2) and (ii) of Section 3.5(a)hereof, the following will be deemed to be cash:
(i1) the assumption by the transferee of Indebtedness or other liabilities, liabilities contingent or otherwise, otherwise of Propco the Parent Guarantor or a Restricted Subsidiary (other than Subordinated Indebtedness of the Parent Guarantor, the Company or a Guarantor) and the release of Propco the Parent Guarantor or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii2) securities, notes or other obligations received by Propco the Parent Guarantor or any Restricted Subsidiary of the Parent Guarantor from the transferee that are converted by Propco the Parent Guarantor or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii3) Indebtedness (other than the Subordinated Indebtedness) of any Restricted Subsidiary of Propco that is no longer a Restricted Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco the Parent Guarantor and each other Restricted Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and;
(iv4) consideration consisting of Parity Lien Debt Indebtedness of the Parent Guarantor or any Restricted Subsidiary (other than Subordinated Indebtedness) received after the Issue Date from Persons who are not the Company Parent Guarantor or any Subsidiary of the CompanyRestricted Subsidiary; and
(v5) any Designated Non-Cash Consideration received by Propco the Parent Guarantor or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section SECTION 3.5 that is at that time outstanding, not to exceed the greater of $50 million, 150 million and 15.0% of LTM EBITDA (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value).
(cf) To Upon the extent that the provisions commencement of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenturean Asset Disposition Offer, the Company shall send, or cause to be sent, a written notice to the Trustee and to each Holder at its registered address, or deliver otherwise in accordance with the applicable procedures of the Depositary. The notice shall contain all instructions and materials necessary to enable such Holder to tender Notes pursuant to the Asset Disposition Offer. Any Asset Disposition Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Disposition Offer, shall state:
(1) that the Asset Disposition Offer is being made pursuant to this SECTION 3.5 and that, to the extent lawful, all Notes tendered and not withdrawn shall be deemed accepted for payment (unless prorated);
(2) the Asset Disposition payment amount, the Asset Disposition offered price, and the date on which Notes tendered and accepted for payment shall be purchased, which date shall be at least 30 days and not later than 60 days from the date such notices are delivered (the “Asset Sale Payment Date”);
(3) that any Notes not tendered or accepted for payment shall continue to accrue interest in accordance with the terms thereof;
(4) that, unless the Company default in making such payment, any Notes accepted for payment pursuant to the Asset Disposition Offer shall cease to accrue interest on and after the Asset Sale Payment Date;
(5) that Holders electing to have breached its obligations described in this Indenture by virtue any Notes purchased pursuant to any Asset Disposition Offer shall be required to surrender the Notes, with the form entitled “Option of compliance therewith. The Company may rely Holder to Elect Purchase” on any no-action letters issued by the SEC indicating that the staff reverse of the SEC will not recommend enforcement action Note completed, to the Paying Agent at the address specified in the event a tender offer satisfies certain conditions.notice at least three Business Days before the Asset sale Payment Date;
(d6) The provisions of this Indenture relative that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than two Business Days prior to the Company’s obligation to make an offer to repurchase Asset Sale Payment Date, a notice setting forth the Notes as a result of an Asset Disposition may be waived or modified with the written consent name of the Holders of a majority in Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing its election to have such Note purchased;
(7) that if the aggregate principal amount of Notes then outstanding.surrendered by Holders exceeds the Asset Disposition payment amount, 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 minimum denominations of $100.00 or integral multiples of $1.00 shall be purchased); and
(8) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrende
Appears in 1 contract
Sources: Indenture (iHeartMedia, Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition following the Issue Date unless:
(i) Propco the Company or such Restricted Subsidiary, 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 as of the date of contractually agreeing to such Asset Disposition), as determined in good faith by Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected Good Faith by the CompanyCompany (including as to the value of all non-cash consideration), of the securities and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) Disposition received by Propco the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash EquivalentsEquivalents or Replacement Assets or a combination thereof; provided that, and
(iii) in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any the remaining consideration from such Asset Disposition that is not in the form of cash or Cash Equivalents must satisfy is thereupon with its acquisition pledged as Collateral to secure the requirements Notes.
(b) Any Net Available Cash received by the Company or any Restricted Subsidiary from any Asset Disposition:
(1) in the case of a Permitted any Asset SwapDisposition of Collateral, (A) shall be reinvested within 365 days in Replacement Assets; provided that to the extent the assets subject to such Asset Disposition were Collateral, such newly acquired assets shall also be Collateral, or (B) shall otherwise be used to make an Asset Disposition Offer (as defined below) in accordance with Section 3.7(c); and
(iii2) in the case of any Asset Disposition of assets not constituting Collateral, may be applied (A) as provided in the immediately preceding clause (1) above or (B) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco permanently reduce any Indebtedness constituting Indebtedness of a Non-Guarantor Subsidiary or to permanently reduce any Subsidiary, as the case may be, elects:
(A) for unsubordinated Indebtedness of the Company or any Subsidiary Guarantor (in each case owing to a Person other than the Company or any Affiliate of the Company) (and, if the obligation repaid is revolving credit Indebtedness, to correspondingly reduce loan commitments with respect thereto). Pending the final application of any such Net Available Cash, the Company (i) to reduce, prepay, repay may temporarily reduce Indebtedness or purchase otherwise invest such Net Available Cash in any Parity Lien Obligations manner (other than to make a Restricted Payment) that is not prohibited by this Indenture.
(c) All Net Available Cash that is not applied or invested as provided in Section 3.7(b) within the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures time periods set forth below for an Asset Disposition Offertherein (or earlier if elected by the Company) shall be deemed to redeem a ratable constitute “Excess Proceeds.” When the aggregate amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactionsExcess Proceeds exceeds $20.0 million, or (ii) the Issuer shall be required to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to purchase from all Holders of Notes and, if required by the terms applicable, from holders of any Parity Lien Obligations, to all holders of such Parity other First Lien Obligations the provisions of which are similar to purchase the maximum those set forth in this Indenture with respect to Asset Dispositions, in an aggregate principal amount of such Notes and Parity such other First Lien Obligations, on a pro rata basis, that may be purchased out Obligations equal to the amount of such Excess Proceeds, if any, at an . The offer price, price in the case of the Notes, in cash in an amount any Asset Disposition Offer shall be equal to 100% of the principal amount thereof of the Notes (or in the event such other Indebtedness was issued with original issue discount, and 100% of the principal amount or, if different, the accreted value thereof), of any other First Lien Obligations) plus accrued and unpaid interest, if any (or such lesser price with respect interest to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offerpurchase, and shall be payable in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereofcash. To the extent that If any Applicable Excess Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining remain after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary Issuer may use any remaining those Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture and such remaining amount shall not be added to any subsequent Excess Proceeds for any purpose under this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes and principal amount or, if applicabledifferent, Parity accreted value of other First Lien Obligations validly tendered pursuant to an into such Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance OfferProceeds, the Advance Portion), the Company Trustee shall allocate the Excess Proceeds among select the Notes and Parity other First Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denominationbasis. Upon completion of any each Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To .
(i) The Asset Disposition Offer shall remain open for a period of 20 Business Days following its commencement, except to the extent that a longer period is required by applicable law (the “Asset Disposition Offer Period”). No later than five Business Days after the termination of the Asset Disposition Offer Period (the “Asset Disposition Purchase Date”), the Issuer shall purchase the principal amount of Notes required to be purchased pursuant to this Section 3.7 (the “Asset Disposition Offer Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered, all Notes validly tendered in response to the Asset Disposition Offer.
(ii) If the Asset Disposition Purchase Date is on or after an interest Record Date and on or before the related Interest Payment Date, any portion accrued and unpaid interest shall be paid on such Asset Disposition Purchase Date to the Person in whose name a Note is registered at the close of Net Available Cash business on such Record Date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Disposition Offer.
(iii) On or Applicable Proceeds payable before the Asset Disposition Purchase Date, the Issuer shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Notes or portions of Notes validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Notes validly tendered and not properly withdrawn, in respect each case in denominations of $1,000 (except that no Note shall be purchased in part if the remaining principal amount would be less than $2,000). The Issuer or the Paying Agent, as the case may be, shall promptly (but in any case not later than five Business Days after termination of the Asset Disposition Offer Period) mail or deliver to each tendering Holder of Notes an amount equal to the purchase price of the Notes is denominated validly tendered and not properly withdrawn by such holder and accepted by the Issuer for purchase, and the Issuer shall promptly issue a new Note, and the Trustee, upon delivery of an Officer’s Certificate from the Issuer, shall authenticate and mail or deliver such new Note to such Holder, in a currency other than Dollars, the principal amount thereof payable in respect equal to any unpurchased portion of the Notes Note surrendered; provided that each such new Note shall not exceed the net be in a principal amount of funds $2,000 or an integral multiple of $1,000 in Dollars that is actually received excess thereof. Any Note not so accepted shall be promptly mailed or delivered by Propco or a Subsidiary of Propco upon converting such portion into Dollarsthe Issuer to the Holder thereof.
(be) For the purposes of clauses (i) and (ii) of this Section 3.5(a)3.7, the following will be are deemed to be cash:
: (ix) except in the case of an Asset Disposition of Collateral, the assumption by the transferee of Indebtedness of the Company (other than Disqualified Stock or Subordinated Obligations) or Indebtedness of any of its Restricted Subsidiaries (other liabilities, contingent than Guarantor Subordinated Indebtedness or otherwise, Disqualified Stock of Propco or a any Subsidiary or Guarantor) and the full and unconditional release of Propco the Company or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
Disposition and (iiy) securities, notes or other similar obligations received by Propco the Company or any Subsidiary of its Restricted Subsidiaries from the transferee that are converted within 180 days by Propco the Company or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;.
(iiif) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset DispositionThe Company and the Issuer shall comply, to the extent that Propco applicable, with the requirements of Section 14(e) of the Exchange Act and each any other Subsidiary are released from any Guarantee of payment of such Indebtedness securities laws or regulations in connection with such Asset Disposition; and
(iv) consideration consisting the repurchase of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received Notes pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) 3.7. To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, regulations conflict with the provisions of this IndentureSection 3.7, the Company and the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in Company and the event a tender offer satisfies certain conditionsIssuer described under this Section 3.7.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (American Axle & Manufacturing Holdings Inc)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Borrower shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, make any Asset Disposition unless:
(i) Propco the Borrower or such Subsidiary, as the case may be, Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming sole responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the fair market value (such fair market value to be determined on Fair Market Value of the date of contractually agreeing shares and assets subject to such Asset Disposition),
(ii) at least 75% of the consideration thereof received by the Borrower or such Restricted Subsidiary is in the form of cash or Additional Assets; provided, as determined in good faith by Propco (andhowever, that in the case of an Asset Disposition of Real Property Collateralany Collateral or Excluded Securities, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected Additional Assets received by the Company)Borrower and any Restricted Subsidiary are added, substantially concurrently with their acquisition, to the Collateral securing (with the same priority as the assets disposed of) the Obligations and the Subsidiary Guarantees; provided further, however, that the 75% consideration requirement of this Section 5.06(a)(ii) shall not apply to any Specified Asset Sale, and
(iii) an amount equal to 100% of the securities and assets subject to such Asset Disposition (including, for the avoidance of doubt, if Net Available Cash from such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
applied by the Borrower (ii) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco or such Restricted Subsidiary, as the case may be):
(A) first, to the extent the Borrower elects (or is required by the terms of any Applicable Indebtedness) (i) to prepay, repay, purchase, repurchase, redeem, retire, defease or otherwise acquire for value Applicable Indebtedness, (ii) to cause any loan commitment that is available to be drawn under the applicable credit facility and to be Incurred under Section 5.03 and that when drawn would constitute a Priority Lien Obligation, to be permanently reduced by the amount of Net Available Cash or (iii) to make Designated L▇ ▇▇▇▇ Collaterizations, in each case, other than Indebtedness owed to the form Borrower or an Affiliate of cash the Borrower and other than obligations in respect of Disqualified Stock, within 365 days after the later of the date of such Asset Disposition or Cash Equivalentsthe receipt of such Net Available Cash;
(B) second, to acquire Additional Assets (or otherwise to make capital expenditures), in each case within 365 days after the later of the date of such Asset Disposition or the receipt of such Net Available Cash; provided provided, however, that, in the case of an Asset Disposition of Real Property Collateralany Collateral or Excluded Securities, or of Equity such Additional Assets are added, substantially concurrently with their acquisition, to the Collateral of any securing (with the same priority as the assets disposed of) the Obligations and the Subsidiary of Propco that ownsGuarantees or, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form case of cash capital expenditures, such capital expenditures are used to improve or Cash Equivalents must satisfy maintain assets that constitute Collateral or real property or fixtures thereon owned by the requirements of Borrower or a Permitted Asset Swap; andSubsidiary Guarantor;
(iiiC) within 365 days from third, to the later of (A) the date of such Asset Disposition and (B) the receipt extent of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to balance of such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (after application in accordance with the procedures set forth below for an Asset Disposition OfferSection 5.06(a)(iii)(A) to redeem a ratable amount of Notes as described in and Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions5.06(a)(iii)(B), or (ii) to make an offer Offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described defined in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
5.06 (B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (ic)) to invest (including capital expenditures) in Additional Assets that are prepay or will become Collateral in accordance with repay Loans pursuant to and subject to the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propcoconditions set Section 5.06(c); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from if the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied Borrower elects (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if is required by the terms of any Parity Lien Obligationsother Senior Indebtedness), such Offer may be made ratably to prepay the Loans and any Applicable Senior Indebtedness, and
(D) fourth, to all holders the extent of the balance of such Parity Lien Obligations Net Available Cash after application in accordance with 5.06(a)(iii)(A), Section 5.06(a)(iii)(B) and Section 5.06(a)(iii)(C), for any general corporate purpose permitted by the terms of this Agreement; provided, however that in connection with any prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value of Indebtedness pursuant to purchase Section 5.06(a)(iii)(A) or Section 5.06(a)(iii)(C), the maximum principal amount of Borrower or such Notes Restricted Subsidiary shall retire such Indebtedness and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, shall cause the related loan commitment (if any, at an offer price, in the case of the Notes, in cash ) to be permanently reduced in an amount equal to 100% of the principal amount thereof (so prepaid, repaid, purchased, repurchased, redeemed, retired, defeased or in otherwise acquired for value. Notwithstanding the event such other Indebtedness was issued with original issue discount, 100% foregoing provisions of the accreted value thereofthis Section 5.06(a)(iii), plus accrued the Borrower and unpaid interest, if its Restricted Subsidiaries will not be required to apply any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, Net Available Cash in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant Section 5.06 except to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered Net Available Cash from all Asset Dispositions that is not applied in connection accordance with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this IndentureSection 5.06 exceeds $25,000,000. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion Pending application of Net Available Cash pursuant to this 5.06, such Net Available Cash may be used or Applicable Proceeds payable invested in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars any manner that is actually received not prohibited by Propco or a Subsidiary of Propco upon converting such portion into Dollarsthis Agreement.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a)this covenant, the following will be are deemed to be cash:
(i) the assumption by of Applicable Indebtedness of the transferee Borrower (other than obligations in respect of Indebtedness Disqualified Stock of the Borrower) or any Restricted Subsidiary (other liabilities, contingent or otherwise, than obligations in respect of Propco or Disqualified Stock and Preferred Stock of a Restricted Subsidiary or that is Subsidiary Guarantor) and the release of Propco the Borrower or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Noncash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market valueFair Market Value that, when taken together with all other Designated Non-Cash Noncash Consideration received pursuant to this Section 3.5 that is at that time clause and then outstanding, does not to exceed $50 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 Non-Cash Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value.) the greater of (A) $200,000,000 and (B) 1.5% of the total Consolidated assets of the Borrower as shown on the most recent balance sheet of the Borrower filed with the SEC;
(ciii) To the extent that the provisions of any securities laws securities, notes or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its similar obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued received by the SEC indicating Borrower or any Restricted Subsidiary from the transferee that are promptly converted by the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived Borrower or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.such Restricted Subsidiary into cash; and
Appears in 1 contract
Sources: Third Lien Credit Agreement (Goodyear Tire & Rubber Co /Oh/)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Restricted Parent Guarantor shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, make any Asset Disposition unless:
(i1) Propco the Restricted Parent Guarantor or such Restricted Subsidiary, 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 Propco the Board of Directors of the Restricted Parent Guarantor (and, or in the case of an Asset Disposition to an Affiliate involving aggregate value in excess of Real Property Collateral$30 million, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company), an Independent Financial Advisor) of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii2) in any such Asset Disposition (except to the extent the Disposition, or series of related Asset Disposition is a Permitted Asset Swap)Dispositions, at least 75100% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), Disposition (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco the Restricted Parent Guarantor or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided and
(3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied:
(i) to the extent the Restricted Parent Guarantor or any Restricted Subsidiary, as the case may be, elects (or is required by the terms of any Indebtedness), (A) to prepay, repay or purchase any Indebtedness of a Non-Guarantor or that is secured by a Lien (in each case, other than Indebtedness owed to the Restricted Parent Guarantor or any Restricted Subsidiary) or any Senior Priority Obligations, including Indebtedness under the Credit Agreement or the Senior Priority Notes (or any Refinancing Indebtedness in respect thereof) within 360 days from the later of (1) the date of such Asset Disposition and (2) the receipt of such Net Available Cash; provided, however, that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (i), the case Restricted Parent Guarantor or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) to be reduced in an amount equal to the principal amount so prepaid, repaid or purchased; or (B) to prepay, repay or purchase Pari Passu Indebtedness at a price of no more than 100% of the principal amount of such Pari Passu Indebtedness plus accrued and unpaid interest to the date of such prepayment, repayment or purchase; provided further that, to the extent the Issuer redeems, repays or repurchases Pari Passu Indebtedness pursuant to this clause (B), the Issuer shall equally and ratably reduce Obligations under the Notes as provided under Section 5.7, 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 Asset Disposition Offer) to all Holders to purchase their Notes at 100% 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; provided further, that, in addition to the foregoing, the Net Available Cash from an Asset Disposition of Real Property Collateral may not be applied to prepay, repay or purchase any Indebtedness other than Senior Priority Obligations, Notes or Pari Passu Indebtedness of the Issuer or a Guarantor secured by a Lien on such Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; andand/or
(iiiii) to the extent the Restricted Parent Guarantor or any Restricted Subsidiary elects, to invest in or commit to invest in Additional Assets (including by means of an investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received by the Restricted Parent Guarantor or another Restricted Subsidiary) within 365 360 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security DocumentsCash; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Net Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable such Net Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each casethe event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Proceeds are applied in connection therewith, that become Collateral in accordance with the Security Documents, and Restricted Parent Guarantor or such Restricted Subsidiary enters into another Acceptable Commitment (ya “Second Commitment”) any Applicable Proceeds relating to an Asset Disposition within 180 days of any Non-High Store Collateral, such cancellation or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documentstermination; provided further that the aggregate amount of Applicable if any Second Commitment is later cancelled or terminated for any reason before such Net Proceeds from an are applied, then such Net Proceeds shall constitute Excess Proceeds; and
(4) if such Asset Disposition involves the disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral Collateral, the Restricted Parent Guarantor or properties or assets constituting, part of or related to a retail store that become Collateral in accordance such Subsidiary has complied with the Security Documents shall be no greater than $180 million after provisions of this Indenture and the Issue DateCollateral Documents; and provided further that that, pending the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value final application of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and Net Available Cash in accordance with clause (i) or clause (ii) in Section 3.5(a)(3), the Restricted Parent Guarantor and the Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise use such Net Available Cash in any manner not prohibited by this Indenture.
(b) above with respect Any Net Available Cash from Asset Dispositions that is not applied or invested or committed to such Asset Disposition. If, with respect be applied or invested as provided in the preceding paragraph will be deemed to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the constitute “Excess Proceeds”)” under this Indenture. On the 361 day after an Asset Disposition or the receipt of such Net Available Cash, then if the Company aggregate amount of Excess Proceeds under this Indenture exceeds (i) $15 million, in the case of a single transaction or a Subsidiary shall series of related transactions, or (ii) $30 million aggregate amount in any fiscal year, the Issuer will within 10 Business Days be required to make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes issued under this Indenture and, if required by to the terms of any Parity Lien Obligationsextent the Issuer elects, to all holders of such Parity Lien Obligations other outstanding Pari Passu Indebtedness, to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, any such Pari Passu Indebtedness to which the Asset Disposition Offer applies that may be purchased out of such the Excess Proceeds, if any, at an offer price, price in the case respect of the Notes, in cash Notes in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof)Notes and Pari Passu Indebtedness, in each case, plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness)any, to, but not including, the date fixed for the closing of such offerpurchase, in accordance with the procedures set forth in this Indenture and or the agreement agreements governing the Parity Lien Obligations Pari Passu Indebtedness, as applicable, and, with respect to the Notes, in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition The Issuer will deliver notice of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (orelectronically or by first-class mail, in with a copy to the case of an Advance OfferTrustee, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at the address of such Holder’s registered address Holder appearing in the security register or otherwise in accordance with the applicable procedures of DTC. The Company , describing the transaction or a Subsidiary may satisfy transactions that constitute the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior and offering to repurchase the Notes for the specified purchase price on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is delivered, pursuant to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being procedures required to do so by this Indenture. Indenture and described in such notice.
(c) To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations and Pari Passu Indebtedness so validly tendered or otherwise surrendered in connection with and not properly withdrawn pursuant to an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance OfferExcess Proceeds, the Advance Portion), the Company or any Subsidiary Issuer may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an surrendered in any Asset Disposition Offer by Holders and other Pari Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds (orProceeds, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds shall be allocated among the Notes and Parity Lien Obligations Pari Passu Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; Pari Passu Indebtedness provided that no Notes or Parity Lien Obligations other Pari Passu Indebtedness will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. .
(d) To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than DollarsU.S. dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars U.S. dollars that is actually received by Propco or a Subsidiary of Propco the Issuer upon converting such portion into DollarsU.S. dollars.
(be) For the purposes of clauses (iSection 3.5(a)(2) and (ii) of Section 3.5(a)hereof, the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, liabilities contingent or otherwise, otherwise of Propco the Restricted Parent Guarantor or a Restricted Subsidiary (other than Subordinated Indebtedness of the Issuer or a Guarantor or Indebtedness or liabilities incurred in contemplation of such Asset Disposition) and the release of Propco the Restricted Parent Guarantor or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco the Restricted Parent Guarantor or any Restricted Subsidiary from the transferee that are converted by Propco the Restricted Parent Guarantor or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Restricted Subsidiary of Propco that is no longer a Restricted Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco the Restricted Parent Guarantor and each other Restricted Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt Indebtedness of the Restricted Parent Guarantor (other than Subordinated Indebtedness) received after the Issue Date from Persons who are not the Company the Restricted Parent Guarantor or any Subsidiary Restricted Subsidiary.
(f) Upon the commencement of an Asset Disposition Offer, the Issuer shall send, or cause to be sent, by first class mail, a notice to the Trustee and to each Holder at its registered address. The notice shall contain all instructions and materials necessary to enable such Holder to tender Notes pursuant to the Asset Disposition Offer. Any Asset Disposition Offer shall be made to all Holders. The notice, which shall govern the terms of the Company; andAsset Disposition Offer, shall state:
(v1) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such that the Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received Disposition Offer is being made pursuant to this Section 3.5 and that, to the extent lawful, all Notes tendered and not withdrawn shall be accepted for payment (unless prorated);
(2) the Asset Disposition payment amount, the Asset Disposition offered price, and the date on which Notes tendered and accepted for payment shall be purchased, which date shall be at least 30 days and not later than 60 days from the date such notices is mailed (the “Asset Sale Payment Date”);
(3) that is at any Notes not tendered or accepted for payment shall continue to accrue interest in accordance with the terms thereof;
(4) that, unless the Issuer defaults in making such payment, any Notes accepted for payment pursuant to the Asset Disposition Offer shall cease to accrue interest on and after the Asset Sale Payment Date;
(5) that time outstanding, not Holders electing to exceed $50 millionhave any Notes purchased pursuant to any Asset Disposition Offer shall be required to surrender the Notes, with the fair market value form entitled “Option of each item Holder to Elect Purchase” on the reverse of Designated Non-Cash Consideration being measured the Note completed, to the Paying Agent at the time received address specified in the notice at least three Business Days before the Asset sale Payment Date;
(6) that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than two Business Days prior to the Asset Sale Payment Date, a notice setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and without giving effect a statement that such Holder is withdrawing its election to subsequent changes have such Note purchased;
(7) that if the aggregate principal amount of Notes surrendered by Holders exceeds the Asset Disposition payment amount, the Issuer shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Issuer so that only Notes in valuedenominations of $2,000 or integral multiples of $1,000 in excess thereof shall be purchased); and
(8) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry).
(cg) If the Asset Sale Payment Date is on or after a record date and on or before the related interest payment date, any accrued and unpaid 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 pursuant to the Asset Disposition Offer.
(h) On the Asset Sale Payment Date, the Issuer will, to the extent permitted by law,
(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Asset Disposition Offer,
(2) deposit with the Paying Agent an amount equal to the aggregate Asset Disposition payment in respect of all Notes or portions thereof so tendered, and
(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.
(i) The Issuer will comply, to the extent applicable, 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 Notes pursuant to this Section 3.5. To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, regulations conflict with the provisions of this Indenture, the Company Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in under this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditionsthereof.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (Essar Steel Algoma Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco shall Hanover will not, and shall will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
unless (i1) Propco Hanover or such Restricted Subsidiary, as the case may be, receives consideration (including by way at the time of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) such Asset Disposition 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)value, as determined in good faith by Propco the Board of Directors (and, in including as to the case value of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than all non-cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Companyconsideration), of the securities shares and assets subject to such Asset Disposition Disposition; (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
(ii2) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 7580% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) Disposition received by Propco Hanover or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and
(iii) within 365 days from the later of (A) the date of such Asset Disposition and (B3) the receipt an amount equal to 100% of the Net Available Cash from such Asset Disposition (as may be extended is applied by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to Hanover or such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Restricted Subsidiary, as the case may be, elects:
(A) for first, to the Company extent Hanover or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of PropcoRestricted Subsidiary, as the case may be) may elect to invest in Additional Assets that are , elects (or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if is required by the terms of any Parity Lien ObligationsSenior Indebtedness) to prepay, repay or purchase Senior Indebtedness or Indebtedness (other than any Preferred Stock or Guarantor Subordinated Obligation) of a Restricted Subsidiary that is a Subsidiary Guarantor (in each case other than Indebtedness owed to all holders Hanover or an Affiliate of Hanover); provided, however, that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (A), Hanover or such Parity Lien Obligations to purchase Restricted Subsidiary will retire such Indebtedness and will cause the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, related commitment (if any, at an offer price, in the case of the Notes, in cash ) to be permanently reduced in an amount equal to 100% of the principal amount thereof so prepaid, repaid or purchased; and (or in B) second, to the event such other Indebtedness was issued with original issue discount, 100% extent of the accreted value thereofbalance of such Net Available Cash after application in accordance with clause (A), plus to the extent Hanover or such Restricted Subsidiary elects to invest in Additional Assets within 360 days from the later of the date of such Asset Disposition or the receipt of such Net Available Cash.
(b) Any Net Available Cash from Asset Dispositions that is not applied or invested as provided in Section 9.6(a) will be deemed to constitute "Excess Proceeds." On the 361st day after an Asset Disposition, if the aggregate amount of Excess Proceeds exceeds $25.0 million, Hanover will notify the Lessor and the 2001B Lessor that it will, upon notice by the Indenture Trustee and/or the 2001B Indenture Trustee, cause the Lessee to purchase Equipment having a Termination Value and/or a 2001B Termination Value equal to or less than such excess amount. Concurrently with the repurchase, if any, of the Securities described in Section 3.3 of the Indenture, (A) the Lessee will purchase the amount of Equipment, at such Equipment's Termination Value necessary to generate sufficient proceeds for the Lessor to prepay a proportionate amount of the Certificates and (B) the Lessee will make a payment of Supplemental Rent to the Lessor sufficient for the Lessor to pay any accrued and unpaid interestinterest on the Securities being repurchased and Certificate Holder Yield on the Certificates being prepaid, as well as any applicable redemption premium. Using the proceeds from the Equipment purchase by the Lessee, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not includingany, the date fixed for the closing of such offer, in accordance Lessor shall promptly comply with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case under Section 3.3 of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of this Section 3.5(a)9.6, the following will be deemed to be cash:
(i) the assumption by the transferee of Senior Indebtedness of Hanover or Indebtedness (other liabilitiesthan Guarantor Senior Subordinated Indebtedness, contingent Guarantor Subordinated Obligations or otherwise, Preferred Stock) of Propco or a any Restricted Subsidiary or of Hanover and the release of Propco Hanover or such Restricted Subsidiary from all liability on such Senior Indebtedness or other liability Indebtedness in connection with such Asset Disposition;Disposition (in which case Hanover will, without further action, be deemed to have applied such deemed cash to Indebtedness in accordance with Section 9.6(a)(3)(A) above); and
(ii) securities, notes or other obligations received by Propco Hanover or any Restricted Subsidiary of Hanover from the transferee that are promptly converted by Propco Hanover or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in valuecash.
(c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i) Propco the Borrower or such Subsidiary, as the case may be, Restricted Subsidiary receives consideration (including by way at the time of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) such Asset Disposition 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)value, as determined in good faith by Propco the Borrower's senior management or the Board of Directors (and, in including as to the case value of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than all non-cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Companyconsideration), of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii) in any such Asset Disposition at least (except A) prior to the extent Initial Maturity Date, 90% and (B) on or after the Asset Disposition is a Permitted Asset Swap)Initial Maturity Date, at least 7580% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) thereof received by Propco the Borrower or such Subsidiary, as the case may be, Restricted Subsidiary is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swapequivalents; and
(iii) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Borrower (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to or such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Restricted Subsidiary, as the case may be, elects:):
(A) for first, to the Company extent the Borrower or any Restricted Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied elects (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if is required by the terms of any Parity Lien ObligationsSenior Indebtedness), to all holders prepay, repay or purchase (x) Senior Indebtedness or (y) Indebtedness (other than Preferred Stock) of a Wholly-Owned Subsidiary (in each case other than Indebtedness owed to the Borrower) within (I) sixty (60) days for the period prior to the Initial Maturity Date and (II) 365 days, for Asset Dispositions occurring on or after the Initial Maturity Date, from the later of the date of such Parity Lien Obligations to purchase Asset Disposition or the maximum principal amount receipt of such Notes and Parity Lien ObligationsNet Available Cash;
(B) second, for any Asset Disposition which occurs on a pro rata basisor after the Initial Maturity Date, that may be purchased out within 365 days from the receipt of such Excess ProceedsNet Available Cash, if anyto the extent of the balance of such Net Available Cash after application in accordance with clause (A), at an offer pricethe Borrower's election either (x) to the investment in or acquisition of Additional Assets or (y) to prepay, repay or purchase (1) Senior Indebtedness or (2) Indebtedness (other than Preferred Stock) of a Wholly-Owned Subsidiary (in each case other than Indebtedness owed to the case Borrower);
(C) third, (I) for any Asset Disposition which occurs prior to the Initial Maturity Date, within sixty (60) days after the application of Net Available Cash in accordance with clause (A) or (II) for any Asset Disposition which occurs on or after the Initial Maturity Date, after the later of the Notesapplication of Net Available Cash in accordance with clauses (A) and (B) and the date that is 365 days from the receipt of such Net Available Cash, in cash in an amount equal to 100% the extent of the principal amount thereof balance of such Net Available Cash after application in accordance with clauses (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereofA) and (B), to redeem the Loans and Exchange Notes at par plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness)any, to, but not including, the date fixed for the closing of such offer, thereon in accordance with Section 2.5(d); and
(D) fourth, for any Asset Disposition which occurs on or after the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To Initial Maturity Date, to the extent that of the balance of such Net Available Cash after application in accordance with clauses (A), (B) and (C), to (w) the investment in or acquisition of Additional Assets, (x) the making of Temporary Cash Investments, (y) the prepayment, repayment or purchase of Indebtedness of the Borrower or Indebtedness of any Applicable Proceeds from an Asset Disposition are from a disposition Restricted Subsidiary (other than Indebtedness owed to the Borrower) or (z) any other purpose otherwise permitted under this Agreement. provided, however, that, in connection with any prepayment, repayment or purchase of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application Indebtedness pursuant to clause (3A), (B), (C) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance OfferD), the Advance Portion)Borrower or such Restricted Subsidiary shall retire such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased. Notices of an Asset Disposition Offer Notwithstanding the foregoing provisions, the Borrower and its Restricted Subsidiaries shall not be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date required to each Holder of the Notes at such Holder’s registered address or otherwise apply any Net Available Cash in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect herewith except to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable from all Asset Dispositions which are not applied in respect of accordance with this covenant exceeds (1) $2,500,000 prior to the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
Initial Maturity Date and (b2) $5,000,000 thereafter. For the purposes of clauses (i) and (ii) of Section 3.5(a)this covenant, the following will be deemed to be cash:
: (ix) the assumption by the transferee of Senior Indebtedness of the Borrower or other liabilities, contingent or otherwise, Indebtedness of Propco or a any Restricted Subsidiary or of the Borrower and the release of Propco the Borrower or such Restricted Subsidiary from all liability on such Senior Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
Disposition (iv) consideration consisting of Parity Lien Debt received after in which case the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market valueBorrower shall, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstandingwithout further action, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described applied 66 61 such assumed Indebtedness in this Indenture by virtue accordance with clause (A) of compliance therewith. The Company may rely on any no-action letters issued the preceding paragraph) and (y) securities received by the SEC indicating that the staff Borrower or any Restricted Subsidiary of the SEC will not recommend enforcement action in Borrower from the event a tender offer satisfies certain conditionstransferee that are promptly converted by the Borrower or such Restricted Subsidiary into cash.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Senior Subordinated Credit Agreement (Federal Mogul Corp)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Parent Guarantor shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco the Parent Guarantor or such Restricted Subsidiary, 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company)Parent Guarantor, of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
(ii2) in any such Asset Disposition Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap)) with a purchase price in excess of $100 million and 10.0% of LTM EBITDA, at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), Disposition (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco the Parent Guarantor or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided thatprovided, in however, to the case of an extent that any assets subject to such Asset Disposition of Real Property were Collateral, or of Equity the non-cash consideration received is pledged as Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not under the Collateral Documents in the form of cash or Cash Equivalents must satisfy accordance with the requirements of a Permitted Asset Swapthis Indenture; and
(iii3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied, either:
(i) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:Cash,
(A) for the Company or any Subsidiary of the Company (ia) to reduce, prepay, repay or purchase any Parity Indebtedness that is secured by a First Priority Lien (including, to the extent secured by a First Priority Lien, the Indebtedness under the Credit Agreement or ABL Credit Agreement incurred pursuant to SECTION 3.2(a) (or any Refinancing Indebtedness in respect thereof)); or
(b) to reduce Obligations under the Notes as provided under SECTION 5.7, through open market purchases or by making an Asset Disposition Offer; or
(other than the Notes)c) to prepay, repay or purchase Pari Passu Indebtedness; provided that the Company Parent Guarantor or a Subsidiary such Restricted Subsidiary, as applicable, shall use a ratable amount equally and ratably reduce to offer reduce Obligations under the Notes (in accordance with the procedures set forth below for A) through open market purchases, (B) by redeeming Notes as provided under SECTION 5.7, or (C) by making an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or ; or
(ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco extent the Parent Guarantor or any Restricted Subsidiary of Propco (i) elects to invest (including capital expenditures) in or commit to invest in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco a Restricted Subsidiary equal to the amount of Net Available Cash received by the Parent Guarantor or a Subsidiary another Restricted Subsidiary) within 365 days from the later of Propco); or (iia) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject date of such Asset Disposition and are or become Collateral in accordance with (b) the Security Documentsreceipt of such Net Available Cash; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds Net Available Cash from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds Net Available Cash will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition event of any Non-High Store CollateralAcceptable Commitment is later cancelled or terminated for any reason before such amount is applied in connection therewith, the Parent Guarantor or such Restricted Subsidiary enters into another Acceptable Commitment (a “Second Commitment”) within 180 days of Equity Collateral of any Subsidiary of Propco that owns, directly such cancellation or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documentstermination; provided further that if any Second Commitment is later cancelled or terminated for any reason before such amount is applied, then such Net Available Cash shall constitute Excess Proceeds; provided that, (1) pending the aggregate final application of the amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral any such Net Available Cash in accordance with clauses (i) and (ii) of SECTION 3.5(a)(3), the Security Documents shall be no greater than $180 million after the Issue DateParent Guarantor and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise use such Net Available Cash in any manner not prohibited by this Indenture; and provided further that (2) the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco Parent Guarantor (or any Subsidiary of PropcoRestricted Subsidiary, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds Net Available Cash attributable to any given Asset Disposition (provided that if the assets subject to the disposition constituted Collateral, such Additional Assets are pledged as Collateral in accordance with the requirements of this Indenture) such investment shall be made no earlier than the earliest of written notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (bSECTION 3.5(a)(3)(ii) above with respect to such Asset Disposition. If, with respect .
(b) The amount of any Net Available Cash from Asset Dispositions that is not applied or invested or committed to any Asset Disposition, at be applied or invested as provided in the expiration of the Proceeds Application Period with respect preceding paragraph will be deemed to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the constitute “Excess Proceeds”)” under this Indenture. On the day following 18 months after the later of an Asset Disposition or the receipt of such Net Available Cash, then or earlier if the Company or a Subsidiary shall Parent Guarantor elects, if the aggregate amount of Excess Proceeds under this Indenture exceeds $75 million, the Parent Guarantor will within 10 Business Days be required to make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes issued under this Indenture and, if required by to the terms of any Parity Lien Obligationsextent the Parent Guarantor elects, to all holders of such Parity Lien Obligations other outstanding Pari Passu Indebtedness, to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, any such Pari Passu Indebtedness to which the Asset Disposition Offer applies that may be purchased out of such the Excess Proceeds, if any, at an offer price, price in the case respect of the Notes, in cash Notes in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof)Notes and Pari Passu Indebtedness, in each case, plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness)any, to, but not including, the date fixed for the closing of such offerpurchase, in accordance with the procedures set forth in this Indenture and or the agreement agreements governing the Parity Lien Obligations Pari Passu Indebtedness, as applicable, and, with respect to the Notes, in minimum denominations of $2,000 100.00 and in integral multiples of $1,000 in excess thereof1.00. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition The Parent Guarantor will deliver notice of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (orelectronically or by first-class mail, in with a copy to the case of an Advance OfferTrustee, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at the address of such Holder’s registered address Holder appearing in the security register or otherwise in accordance with the applicable procedures of DTC, describing the transaction or transactions that constitute the Asset Disposition and offering to repurchase the Notes for the specified purchase price on the date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is delivered, pursuant to the procedures required by this Indenture and described in such notice. The Company or a Subsidiary Parent Guarantor may satisfy the foregoing obligation obligations with respect to any Applicable Proceeds Net Available Cash from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all Net Available Cash within the relevant 365 day period (or a part of the Applicable Proceeds such longer period provided above) or with respect to any unapplied Excess Proceeds.
(the “Advance Portion”c) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations and Pari Passu Indebtedness so validly tendered or otherwise surrendered in connection with and not properly withdrawn pursuant to an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance OfferExcess Proceeds, the Advance Portion), the Company or any Subsidiary Parent Guarantor may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an surrendered in any Asset Disposition Offer by Holders and other Pari Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds (orProceeds, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds shall be allocated among the Notes and Parity Lien Obligations Pari Passu Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; Pari Passu Indebtedness, provided that no Notes or Parity Lien Obligations other Pari Passu Indebtedness will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. Additionally, the Parent Guarantor may, at its option, make an Asset Disposition Offer using proceeds from any Asset Disposition at any time after the consummation of such Asset Disposition. Upon consummation or expiration of any Asset Disposition Offer, any remaining Net Available Cash shall not be deemed Excess Proceeds and the Parent Guarantor may use such Net Available Cash for any purpose not prohibited by this Indenture.
(d) To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco the Parent Guarantor upon converting such portion into Dollars. Notwithstanding any other provisions of SECTION 3.5,
(i) (A) to the extent that any of or all the Net Available Cash of any Asset Disposition by a Foreign Subsidiary (a “Foreign Disposition”) is prohibited or delayed by applicable local law or subject to other onerous organizational or administrative impediments (as determined in good faith by the Parent Guarantor), from being repatriated to the United States, the portion of such Net Available Cash 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 so long, but only so long, as the applicable local law, documents or administrative impediments will not permit repatriation to the United States, provided that the Parent Guarantor hereby agrees to use reasonable efforts to otherwise cause the applicable Foreign Subsidiary to within one year following the date on which the respective payment would otherwise have been required, promptly take all actions reasonably required by the applicable local law or other impediment to permit such repatriation; and (B) if within one year following the date on which the respective payment would otherwise have been required, such repatriation of any of such affected Net Available Cash is permitted under the applicable local law or other impediment, such repatriation will be promptly effected and the amount of such repatriated Net Available Cash will be promptly (and in any event not later than five (5) Business Days after such repatriation could be made) applied (whether or not repatriation actually occurs) in compliance with this covenant; and
(ii) to the extent that the Parent Guarantor has determined in good faith that repatriation of any of or all the Net Available Cash of any Foreign Disposition would have an adverse Tax consequence (which for the avoidance of doubt, includes, but is not limited to, any prepayment whereby doing so the Parent Guarantor, any Restricted Subsidiary, or any of their respective affiliates and/or equity owners would incur a tax liability, including as a result of a tax dividend, deemed dividend or a withholding tax, but taking into account any corresponding or related foreign tax credit or other similar benefit that may be available, the Net Available Cash so affected may be retained by the applicable Foreign Subsidiary. The non-application of any prepayment amounts as a consequence of the foregoing provisions will not, for the avoidance of doubt, constitute a Default or an Event of Default.
(be) For the purposes of clauses (iSECTION 3.5(a)(2) and (ii) of Section 3.5(a)hereof, the following will be deemed to be cash:
(i1) the assumption by the transferee of Indebtedness or other liabilities, liabilities contingent or otherwise, otherwise of Propco the Parent Guarantor or a Restricted Subsidiary (other than Subordinated Indebtedness of the Parent Guarantor, the Company or a Guarantor) and the release of Propco the Parent Guarantor or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii2) securities, notes or other obligations received by Propco the Parent Guarantor or any Restricted Subsidiary of the Parent Guarantor from the transferee that are converted by Propco the Parent Guarantor or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii3) Indebtedness (other than the Subordinated Indebtedness) of any Restricted Subsidiary of Propco that is no longer a Restricted Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco the Parent Guarantor and each other Restricted Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and;
(iv4) consideration consisting of Parity Lien Debt Indebtedness of the Parent Guarantor or any Restricted Subsidiary (other than Subordinated Indebtedness) received after the Issue Date from Persons who are not the Company Parent Guarantor or any Subsidiary of the CompanyRestricted Subsidiary; and
(v5) any Designated Non-Cash Consideration received by Propco the Parent Guarantor or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section SECTION 3.5 that is at that time outstanding, not to exceed the greater of $50 million, 150 million and 15.0% of LTM EBITDA (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value).
(cf) To Upon the extent that the provisions commencement of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenturean Asset Disposition Offer, the Company shall send, or cause to be sent, a written notice to the Trustee and to each Holder at its registered address, or deliver otherwise in accordance with the applicable procedures of the Depositary. The notice shall contain all instructions and materials necessary to enable such Holder to tender Notes pursuant to the Asset Disposition Offer. Any Asset Disposition Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Disposition Offer, shall state:
(1) that the Asset Disposition Offer is being made pursuant to this SECTION 3.5 and that, to the extent lawful, all Notes tendered and not withdrawn shall be deemed accepted for payment (unless prorated);
(2) the Asset Disposition payment amount, the Asset Disposition offered price, and the date on which Notes tendered and accepted for payment shall be purchased, which date shall be at least 30 days and not later than 60 days from the date such notices are delivered (the “Asset Sale Payment Date”);
(3) that any Notes not tendered or accepted for payment shall continue to accrue interest in accordance with the terms thereof;
(4) that, unless the Company default in making such payment, any Notes accepted for payment pursuant to the Asset Disposition Offer shall cease to accrue interest on and after the Asset Sale Payment Date;
(5) that Holders electing to have breached its obligations described in this Indenture by virtue any Notes purchased pursuant to any Asset Disposition Offer shall be required to surrender the Notes, with the form entitled “Option of compliance therewith. The Company may rely Holder to Elect Purchase” on any no-action letters issued by the SEC indicating that the staff reverse of the SEC will not recommend enforcement action Note completed, to the Paying Agent at the address specified in the event a tender offer satisfies certain conditions.notice at least three Business Days before the Asset sale Payment Date;
(d6) The provisions of this Indenture relative that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than two Business Days prior to the Company’s obligation to make an offer to repurchase Asset Sale Payment Date, a notice setting forth the Notes as a result of an Asset Disposition may be waived or modified with the written consent name of the Holders of a majority in Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing its election to have such Note purchased;
(7) that if the aggregate principal amount of Notes then outstandingsurrendered by Holders exceeds the Asset Disposition payment amount, 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 minimum denominations of $100.00 or integral multiples of $1.00 shall be purchased); and
(8) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry).
(g) If the Asset Sale Payment Date is on or after a record date and on or before the related interest payment date, any accrued and unpai
Appears in 1 contract
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco Holdings or such Restricted Subsidiary, 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company)Holdings, of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
(ii2) in any such Asset Disposition Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 7575.0% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Existing Secured Notes Issue Date (on a cumulative basis), ) (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) ), received by Propco Holdings or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and
(iii3) within 365 540 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth belowCommitment, the “Proceeds Application Period”), an amount equal to such the Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco Holdings or any Restricted Subsidiary, as the case may be, elects:
(i) (x) to the extent such Net Available Cash is from an Asset Disposition of Collateral, (A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity First Lien Obligations (other than the Notes), including Indebtedness under the First Lien Credit Agreement (or any Refinancing Indebtedness in respect thereof); provided that provided, however, that, to the extent Holdings or the Company reduces, prepays, repays or a Subsidiary purchases such First Lien Obligations pursuant to this clause (A), the Company shall use a ratable amount equally and ratably reduce Obligations under the Notes pursuant to Section 5.7 through open market purchases or in privately negotiated transactions or by making an offer (in accordance with the procedures set forth below for an a Collateral Asset Disposition Offer) to redeem a ratable all Holders to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactionsthat would otherwise be prepaid, or (iiB) to make an offer (in accordance with the procedures set forth below for an a Collateral Asset Disposition Offer), to redeem Notes as described in pursuant to Section 5.6 5.7 or to purchase Notes through open-open market purchases or in privately negotiated transactions,
, or (BC) to reduce, prepay, repay or purchase any Indebtedness of a Non-Guarantor Subsidiary (in each case, other than with respect Indebtedness owed to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco Holdings or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of PropcoRestricted Subsidiary); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateralthat, in each case applied (connection with any prepayment, repayment or committed to be applied) purchase of Indebtedness pursuant to this clause (bi)(x), Holdings or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (other than obligations in respect of any asset-based credit facility to the extent the assets sold or otherwise disposed of in connection with such Asset Disposition constituted “borrowing base assets”) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash reduced in an amount equal to 100% of the principal amount thereof (so prepaid, repaid or in the event such other Indebtedness was issued with original issue discountpurchased; provided, 100% of the accreted value thereof)further, plus accrued and unpaid interest, that if any (or such lesser price with respect offer to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that purchase any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregateNotes is made, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (repaid to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing amount of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result offer, whether or not accepted by the holders of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset DispositionNotes; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (Wayfair Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (aA) Propco shall The Issuer will not, and shall will not permit any of its Subsidiaries Restricted Subsidiary to, make directly or indirectly, consummate any Asset Disposition unless:
(i) Propco the Issuer or such Subsidiary, as the case may be, Restricted Subsidiary receives consideration (including by way at the time of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) such Asset Disposition at least equal to the fair market value (such fair market including as to the value to be determined on the date of contractually agreeing to such Asset Dispositionall noncash consideration), as determined in good faith by Propco (and, in members of the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company)Issuer’s senior management, of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least seventy five percent (75% %) of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) thereof received by Propco the Issuer or such Subsidiary, as the case may be, Restricted Subsidiary is in the form of cash or cash equivalents, Temporary Cash EquivalentsInvestments or Replacement Assets or a combination of cash and cash equivalents, Temporary Cash Investments, and Replacement Assets; provided thatprovided, in however, that with respect to the case sale of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiariesreal estate properties or related property, Real Property Collateralplant and equipment, any or loans secured by real estate, up to seventy five percent (75%) of the consideration that may consist of Indebtedness of the purchaser of such real estate properties or related property, plant and equipment, or loans secured by real estate, so long as such Indebtedness is not in secured by a first or second priority Lien on the form of cash real estate property or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; andproperties or related property, plant and equipment, or loans secured by real estate, sold;
(iii) within 365 days from the later of an amount equal to one hundred percent (A100%) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition is applied by the Issuer (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to or such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Restricted Subsidiary, as the case may be, elects:):
(Aa) for first, to the Company extent the Issuer elects (or is required by the terms of any Indebtedness), to prepay, repay, redeem or purchase secured Indebtedness of the Issuer or any Restricted Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations Indebtedness (other than Disqualified Stock) of any other Wholly Owned Subsidiary (in each case other than Indebtedness owed to the Notes); provided that Issuer or an Affiliate of the Company Issuer) within one (1) year from the later of the date of such Asset Disposition or a Subsidiary shall use a ratable amount the receipt of such Net Available Cash;
(b) second, to offer (the extent of the balance of such Net Available Cash after application in accordance with clause (a), to the procedures set forth below for an extent the Issuer elects, to make a capital expenditure or to acquire Replacement Assets within one (1) year from the later of the date of such Asset Disposition Offeror the receipt of such Net Available Cash; and
(c) third, to redeem a ratable amount the extent of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactionsthe Excess Proceeds, or (ii) to make an offer to the Holders of the Notes (in accordance with and to holders of other Senior Indebtedness of the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or Issuer designated by the Issuer) to purchase Notes through open-market purchases or (and such other Senior Indebtedness of the Issuer) pursuant to and subject to the conditions contained in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security DocumentsIndenture; provided, however, that a binding agreement in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (a) or (c) above (excluding temporary reductions of revolving credit indebtedness made pursuant to the last sentence of Section 4.05(B)), the Issuer or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment (if any) to be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that permanently reduced in an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”)the principal amount so prepaid, repaid or purchased; provided further, that (x) any Applicable Proceeds relating however, the Issuer will be deemed to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance have complied with clause (b) above with respect if and to such Asset Disposition. Ifthe extent that, with respect to any Asset Disposition, at within three hundred and sixty five (365) days after the expiration later of the Asset Disposition or the receipt of Net Available Cash, the Issuer or any of its Restricted Subsidiaries has entered into and not abandoned or rejected a binding agreement to make a capital expenditure or to acquire Replacement Assets, and that such capital expenditure or acquisition is thereafter completed within one hundred and eighty (180) days after the end of such three hundred and sixty five (365) day period.
(B) The Net Available Cash of an Asset Disposition not applied pursuant to Section 4.05(A)(iii)(a) or Section 4.05(A)(iii)(b) above constitute “Excess Proceeds.” Excess Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable of less than ten million dollars ($10,000,000) will be carried forward and accumulated. When accumulated Excess Proceeds in excess of $100 million (equal or exceed such amount, the “Issuer must, within thirty (30) days, make an offer to purchase the Notes, in accordance with Section 4.05(A)(iii)(c). Pending application of Net Available Cash pursuant to this Section 4.05, such Net Available Cash shall be invested in Temporary Cash Investments or applied to temporarily reduce revolving credit indebtedness.
(C) In the event the Issuer make an offer to purchase the Notes pursuant to Section 4.05(A)(iii)(c), (i) if Notes in an aggregate principal amount less than or equal to the applicable Excess Proceeds”)Proceeds are duly tendered pursuant to such offer to purchase, then the Company or a Subsidiary shall make Issuer will purchase all such tendered Notes, and (ii) if Notes in an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration aggregate principal amount in excess of the applicable Excess Proceeds Application Period are duly tendered pursuant to all Holders of such offer to purchase, then the Issuer will purchase tendered Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum having an aggregate principal amount of such Notes and Parity Lien Obligations, equal to the applicable Excess Proceeds on a pro rata basis, with adjustments so that may be purchased out of such Excess Proceeds, if any, at an offer price, only Notes in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in a minimum denominations denomination of $2,000 and in principal amount or any integral multiples multiple of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds thereof will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollarspurchased.
(bD) For the purposes of clauses (i) and (ii) of this Section 3.5(a)4.05, the following will be are deemed to be cashcash or cash equivalents:
(i) the assumption by the transferee of Indebtedness of the Issuer or other liabilities, contingent or otherwise, of Propco or a any Restricted Subsidiary or and the release of Propco the Issuer or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(ivii) consideration consisting of Parity Lien Debt securities received after by the Issue Date from Persons who are not the Company Issuer or any Restricted Subsidiary from the transferee that are converted by the Issuer or such Restricted Subsidiary into cash within 180 days of receipt.
(E) In the event of an Asset Disposition that requires the purchase of Notes (and other Senior Indebtedness of the Company; and
Issuer) pursuant to Section 4.05(A)(iii)(c), the Issuer will purchase Notes tendered pursuant to an offer by the Issuer for the Notes (vand such other Senior Indebtedness of the Issuer) any Designated Non-at a purchase price of one hundred percent (100%) of their principal amount (or, in the event such other Senior Indebtedness of the Issuer was issued with significant original issue discount, one hundred percent (100%) of the accreted value thereof), without premium, plus accrued but unpaid interest, if any, (or, in respect of such other Senior Indebtedness of the Issuer, such lesser price, if any, as may be provided for by the terms of such Senior Indebtedness of the Issuer) in accordance with the procedures (including prorating in the event of oversubscription) set forth in the Indenture. If the aggregate purchase price of the securities tendered exceeds the Net Available Cash Consideration received by Propco allotted to their purchase, the Issuer will select the securities to be purchased on a pro rata basis but in round denominations, which in the case of the Notes will be denominations of $2,000 in principal amount or any Subsidiary integral multiple of $1,000 in excess thereof. The Issuer shall not be required to make such Asset Dispositions having an aggregate fair market value, taken together with all offer to purchase Notes (and other Designated Non-Cash Consideration received Senior Indebtedness of the Issuer) pursuant to this Section 3.5 that 4.05 if the Excess Proceeds are less than five million dollars ($5,000,000) (which lesser amount shall be carried forward for purposes of determining whether such an offer is at that time outstandingrequired with respect to the Net Available Cash from any subsequent Asset Disposition).
(F) The Issuer will comply, not to exceed $50 millionthe extent applicable, with the fair market value requirements of each item Section 14(e) of Designated Non-Cash Consideration being measured at the time received Exchange Act and without giving effect any other securities laws or regulations in connection with the purchase of Notes pursuant to subsequent changes in value.
(c) this Section 4.05. To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, regulations conflict with the provisions of this IndentureSection 4.05, the Company shall Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in under this Indenture Section 4.05 by virtue of its compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditionswith such securities laws or regulations.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Supplemental Indenture (Kennedy-Wilson Holdings, Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco shall The Company and Parent will not, and shall will not permit any of its the Restricted Subsidiaries of Parent to, make any Asset Disposition of Collateral unless:
(i) Propco the Company, Parent or such Restricted Subsidiary, 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 Fair Market Value (such fair market value Fair Market Value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by Propco (andParent’s management, in the case of an or if such Asset Disposition involves consideration in excess of Real Property Collateral$15.0 million, or by a resolution of Equity Collateral the Board of any Subsidiary Directors set forth in an Officers’ Certificate delivered to the Trustee (including as to the value of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than all non-cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Companyconsideration), of the securities and assets Collateral subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) Disposition received by Propco the Company, Parent or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that, Equivalents and 100% of the portion of the Net Proceeds from Asset Dispositions relating to the First Priority Collateral in excess of $10.0 million in the case aggregate (to the extent not applied or invested as provided below) is deposited directly into the Collateral Account or becomes the subject of an a Net Proceeds Letter of Credit promptly upon the receipt of such Net Proceeds; and
(iii) the remaining consideration from such Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy is thereupon with its acquisition pledged as the requirements First Priority Collateral to secure the Notes, in the case of a Permitted an Asset Swap; and
Disposition of the First Priority Collateral, or as ABL Collateral, in the case of an Asset Disposition of ABL Collateral. For purposes of clause (iiiii) within 365 days from of the later of preceding paragraph, the following shall be deemed to be cash: (Aa) the date repayment or assumption of such Asset Disposition Indebtedness secured by Liens with a priority senior or equal to the Liens in favor of the Notes and the Note Guarantees and (Bb) any securities, notes or other obligations received by the receipt Company, Parent or any such Restricted Subsidiary from such transferee that are, within 180 days of the Net Available closing of the disposition of Collateral, converted by the Company, Parent or such Restricted Subsidiary into cash or Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is appliedEquivalents, to the extent Propco or any Subsidiary, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay cash or purchase Cash Equivalents received in that conversion. Any Net Proceeds from any Parity Lien Obligations (other than Asset Dispositions of First Priority Collateral deposited into the Notes); provided that Collateral Account or the subject of a Net Proceeds Letter of Credit may be invested by the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) Guarantor in Additional Assets that are or will become constituting First Priority Collateral (including, without limitation, through capital expenditures in accordance with domestic assets constituting First Priority Collateral) within 360 days of the Security Documents (including by means date of an investment in the receipt of any Net Proceeds from such Asset Disposition, which Additional Assets by Propco or a Subsidiary of Propco)are thereupon with their acquisition added to the First Priority Collateral securing the Notes; or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, provided that a binding agreement commitment entered into with such 360-day period shall be treated as a permitted application of Applicable the Net Proceeds from the date of so long as such commitment with the good faith expectation that an amount equal to Applicable Net Proceeds will shall be applied to satisfy such commitment within 180 days of the date of such commitment; provided further that Additional Assets shall not include the Capital Stock of Foreign Subsidiaries for purposes of this requirement unless the relevant Asset Disposition consisted of the sale of the Capital Stock of a Foreign Subsidiary. All of the Net Proceeds received from any Recovery Event in respect of First Priority Collateral shall be deposited directly into the Collateral Account or become the subject of a Net Proceeds Letter of Credit promptly upon the receipt of such Net Proceeds and may be invested by the Company or a Guarantor in Additional Assets constituting First Priority Collateral (which may include performance of a restoration of the affected Collateral) within 360 days of the date of the receipt of any Net Proceeds from such Recovery Event, which Additional Assets are thereupon with their acquisition added to the First Priority Collateral securing the Notes; provided that a binding commitment entered into with such 360-day period shall be treated as a permitted application of the Net Proceeds so long as such Net Proceeds shall be applied to satisfy such commitment (an “Acceptable Commitment”)within 180 days of the date of such commitment; provided further, further that (x) any Applicable the Company shall not be required to deposit in the Collateral Account or make the subject of a Net Proceeds relating to Letter of Credit in an aggregate amount of $5.0 million or less and (y) Additional Assets shall not include the Capital Stock of Foreign Subsidiaries for purposes of this requirement, unless the relevant Recovery Event involved the Capital Stock of a Foreign Subsidiary. Any Net Proceeds from Asset Disposition Dispositions of any Distribution Center Collateral or High Store CollateralRecovery Events deposited into the Collateral Account may be withdrawn, or and any Net Proceeds Letter of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to Credit may be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status andreduced and/or terminated, in each case, in the amount to be invested or applied by the Company or a Guarantor in accordance with this Indenture. Any Net Proceeds from Asset Dispositions of Collateral or Recovery Events that become Collateral are not deposited (or made subject to a Net Proceeds Letter of Credit), applied or invested as provided in this subsection (a) within the applicable timeframe or in accordance with the Security Documents, and (y) any Applicable Proceeds relating Collateral Documents will be deemed to an Asset Disposition of any Non-High Store Collateral, or of Equity constitute “Excess Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that Proceeds.” When the aggregate amount of Applicable Excess Collateral Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constitutingexceeds $10.0 million, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amountwithin 30 days thereof, the “Excess Proceeds”), then the Company or a Subsidiary shall will be required to make an offer (an “Asset Collateral Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to and all holders of such Parity other Pari Passu Lien Obligations Indebtedness containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of Collateral to purchase the maximum principal amount of such the Notes and Parity such Pari Passu Lien Obligations, Indebtedness (on a pro rata basis, ) to which the Collateral Disposition Offer applies that may be purchased out of such the Excess Collateral Proceeds, if any, at an offer price, in the case of the Notes, price in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof)Notes, plus accrued and unpaid interest, if any (or such lesser price with respect interest to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offerpurchase, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To Indenture; provided, that to the extent the Excess Collateral Proceeds relate to Asset Dispositions of ABL Collateral, the Company may, prior to making a Collateral Disposition Offer, make a prepayment with respect to the maximum principal amount of Indebtedness and Obligations that any Applicable Proceeds from is secured by ABL Collateral on a first-priority basis that may be prepaid out of such Excess Collateral Proceeds, at a price in cash in an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant amount equal to clause (3) above or the immediately preceding paragraph and, in the case 100% of the immediately preceding paragraphprincipal amount of such Indebtedness and Obligations, released plus accrued and unpaid interest, to Propco or the date of prepayment, with any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but Excess Collateral Proceeds not more than 60 days before the purchase date used to each Holder of the Notes at prepay such Holder’s registered address or otherwise Indebtedness offered to Holders in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indentureparagraph. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any and other Parity Pari Passu Lien Obligations Indebtedness so validly tendered or otherwise surrendered in connection with an Asset and not properly withdrawn pursuant to a Collateral Disposition Offer is less than the amount offered Excess Collateral Proceeds (after giving effect to the prepayment of Indebtedness secured on a first-priority basis in the case of an Asset Disposition of ABL Collateral), the Company may use any remaining Excess Collateral Proceeds for general corporate purposes, subject to the other covenants contained in this Indenture. If the aggregate principal amount of Notes surrendered by Holders and Pari Passu Lien Indebtedness tendered pursuant to such Collateral Disposition Offer exceeds the amount of Excess Collateral Proceeds, the Notes and Pari Passu Lien Indebtedness to be purchased shall be selected on a pro rata basis. Upon completion of such Collateral Disposition Offer, the amount of Excess Collateral Proceeds shall be reset at zero.
(b) the Company and Parent will not, and will not permit any Restricted Subsidiary of Parent to, make any Asset Disposition (other than Asset Dispositions of Collateral which shall be treated in the manner set forth in paragraph (a) above) unless:
(1) the Company, Parent or the Restricted Subsidiary, as the case may be, receives consideration at the time of the Asset Disposition at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of;
(2) least 75% of the consideration received in the Asset Disposition by the Company, Parent or the Restricted Subsidiary, as the case may be, is in the form of cash. For purposes of this provision, each of the following will be deemed to be cash:
(A) Cash Equivalents;
(B) any liabilities, as shown on the most recent consolidated balance sheet of the Company, Parent or any Restricted Subsidiary of Parent (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantee) that are assumed, or from which the Company, Parent or such Restricted Subsidiary of Parent is released, by the transferee of any such assets pursuant to a customary agreement that releases the Company, Parent or such Restricted Subsidiary from further liability;
(C) any securities, notes or other obligations received by the Company, Parent or any such Restricted Subsidiary from such transferee that are, within 180 days of the closing of such Asset Disposition, converted by the Company, Parent or such Restricted Subsidiary into cash or Cash Equivalents, to the extent of the cash or Cash Equivalents received in that conversion;
(D) accounts receivable of a business retained by the Company, Parent or such Restricted Subsidiary, 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; and
(E) all other forms of consideration (except cash and Cash Equivalents) received for all Asset Dispositions since the date of this Indenture to the extent that the Fair Market Value of all such other forms of consideration does not exceed in the aggregate 5% of the Consolidated Tangible Assets of Parent on a consolidated basis at the time each determination is made. Within 360 days after the receipt of any Net Proceeds from an Asset Disposition, the Company, Parent or the applicable Restricted Subsidiary, as the case may be, may apply such Net Proceeds at its option:
(1) to repay Senior Debt (and, if the Senior Debt repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto) and Indebtedness of the applicable Restricted Subsidiary (or any other Restricted Subsidiary that guarantees such Indebtedness), other than Indebtedness owed to the Company, Parent or a Restricted Subsidiary of Parent;
(2) to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of Parent;
(3) to make capital expenditures;
(4) to acquire other assets that are used or useful in a Permitted Business or to make expenditures for maintenance, repair or improvement of existing properties and assets in accordance with the provisions of this Indenture; or
(5) any combination of the foregoing. provided that, in the case of clauses (2), (3) or (4) above, a binding commitment entered into with such 360-day period shall be treated as a permitted application of the Net Proceeds so long as such Net Proceeds shall be applied to satisfy such commitment within 180 days of the date of such commitment. Pending the final application of any Net Proceeds, the Company, Parent or the applicable Restricted Subsidiary may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by this Indenture. Any Net Proceeds from Asset Dispositions that are not applied or invested as provided above will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $30.0 million, within 30 days thereof, the Company will make an Advance offer (“Asset Disposition Offer”) to all Holders and, at the Company’s option, all holders of other Indebtedness that is pari passu with the Notes (“Pari Passu Indebtedness”) containing provisions similar to those set forth in this Indenture with respect to offers to purchase, prepay or redeem with the proceeds of sales of assets to purchase, prepay or redeem the maximum principal amount of Notes and such other Pari Passu Indebtedness (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith) that may be purchased out of the Excess Proceeds. The offer price in any Asset Disposition Offer will be equal to 100% of the principal amount, plus accrued and unpaid interest, if any, to, but not including, the date of purchase, prepayment or redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Disposition Offer, the Advance Portion)Company, Parent or the Company or any applicable Restricted Subsidiary may use any remaining those Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (of Notes and other Pari Passu Indebtedness tendered in, or accreted valuerequired to be prepaid or redeemed in, as applicable) of the Notes orconnection with, if applicable, Parity Lien Obligations validly tendered pursuant to an such Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance OfferProceeds, the Advance Portion), the Company shall allocate the Excess Proceeds among Trustee will select the Notes and Parity Lien Obligations such other Pari Passu Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered except that any Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations represented by a note in global form will be selected and purchased in an unauthorized denominationby such method as DTC or its nominee or successor may require. Upon completion of any each Asset Disposition Offer, the amount of Excess Proceeds shall will be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To The Collateral Disposition Offer or Asset Disposition Offer will remain open for a period of 20 Business Days following its commencement, except to the extent that a longer period is required by applicable law (the provisions “Asset Disposition Offer Period”). No later than five Business Days after the termination of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with Asset Disposition Offer Period (the provisions of this Indenture“Asset Disposition Purchase Date”), the Company shall not will purchase the principal amount of Notes and other Indebtedness required to be deemed purchased pursuant to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by Section 3.05(a) and Pari Passu Indebtedness required to be purchased pursuant to Section 3.05(b) (the SEC indicating that “Asset Disposition Offer Amount”) or, if less than the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
Asset Disposition Offer Amount has been so validly tendered, all Notes (d) The provisions of this Indenture relative and other Indebtedness required to be purchased pursuant to the Company’s obligation last paragraph of Section 3.05(a)) and Pari Passu Indebtedness required to make an offer be purchased pursuant to repurchase Section 3.05(b), if applicable, validly tendered in response to the Notes as a result of an Collateral Disposition Offer or Asset Disposition may Offer, as applicable. If the Asset Disposition Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be waived paid on such Asset Disposition Purchase Date to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Notes pursuant to the Collateral Disposition Offer or modified with Asset Disposition Offer. Upon the written consent commencement of a Collateral Disposition Offer or Asset Disposition Offer, as applicable, the Company will deliver a notice to the Trustee and each of the Holders of a majority in principal amount the Notes. The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Collateral Disposition Offer or Asset Disposition Offer, as applicable. The notice, which will govern the terms of the Notes then outstanding.Collateral Disposition Offer or Asset Disposition Offer, as applicable, will state:
(1) that the Collateral Disposition Offer or Asset Disposition Offer is being made pursuant to this Section 3.05 and the length of time the Collateral Disposition Offer or Asset Disposition Offer will remain open;
(2) the Asset Disposition Offer Amount, the purchase price and the Asset Disposition Purchase Date;
(3) that any Security not tendered or accepted for payment will continue to accrue inter
Appears in 1 contract
Sources: Indenture (EM Holdings LLC)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco shall [Reserved].
(b) Following the Completion Date, the Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco the Issuer or such Restricted Subsidiary, 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 Propco (and, in an Officer or the case Board of an Asset Disposition Directors of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company)Issuer, of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;; and
(ii2) in any such Asset Disposition Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Disposition or such series of related Asset Dispositions since the Issue Date (on a cumulative basis), (including excluding any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, other than Indebtedness) received by Propco the Issuer or such Restricted Subsidiary, as the case may be, is in the form of cash cash, Cash Equivalents or Temporary Cash Equivalents; provided thatInvestments.
(c) After the receipt of Net Available Cash from an Asset Disposition, in the Issuer or a Restricted Subsidiary, as the case of an Asset Disposition of Real Property Collateralmay be, or of Equity Collateral of any Subsidiary of Propco that owns, may apply such Net Available Cash directly or indirectly throughout one (at the option of the Issuer or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; andsuch Restricted Subsidiary):
(iii1) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay repay, purchase or redeem any Indebtedness incurred under Section 4.04(b)(1); provided, however, that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this Section 4.08(c)(1), the Issuer or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) (except in the case of any Parity Lien Obligations revolving Indebtedness) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid, purchased or redeemed; (other ii) unless included in this Section 4.08(c)(1), to prepay, repay, purchase or redeem any Pari Passu Indebtedness of any of the Issuers at a price of no more than 100% of the Notes)principal amount of such Pari Passu Indebtedness plus accrued and unpaid interest to the date of such prepayment, repayment, purchase or redemption; provided that the Company Issuer or a Subsidiary the Co-Issuer, as applicable, shall use a ratable amount prepay, redeem, repay or repurchase Pari Passu Indebtedness that is Public Debt pursuant to this clause (ii) only if the Issuers make an offer (to the holders of the Notes to purchase their Notes in accordance with the procedures provisions set forth below for an Asset Disposition Offer) to redeem a ratable Offer for an aggregate principal amount of Notes as described in Section 5.6 or purchase a ratable at least equal to the proportion that (x) the total aggregate principal amount of Notes through open-market purchases outstanding bears to (y) the sum of the total aggregate principal amount of Notes outstanding plus the total aggregate principal amount outstanding of such Pari Passu Indebtedness; (iii) to prepay, repay, purchase or in privately negotiated transactions, redeem any Indebtedness of a Restricted Subsidiary or any Indebtedness that is secured on assets (other than Subordinated Indebtedness of any of the Issuers or Indebtedness owed to the Issuer or any Restricted Subsidiary); or (iiiv) to make purchase the Notes pursuant to an offer to all holders of Notes at a purchase price in cash equal to at least 100% of the principal amount of the Notes, plus accrued and unpaid interest to, but not including, the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date);
(2) to the extent the Issuer or such Restricted Subsidiary elects, to invest in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) commit to invest (including capital expenditures) in or purchase Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco a Restricted Subsidiary with Net Available Cash received by the Issuer or a Subsidiary another Restricted Subsidiary) within 365 days from the later of Propco); or (iii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject date of such Asset Disposition and are or become Collateral in accordance with (ii) the Security Documentsreceipt of such Net Available Cash; provided, however, that any such reinvestment in Additional Assets made pursuant to a definitive binding agreement shall be treated or a commitment approved by the Board of Directors of the Issuer that is executed or approved within such time will satisfy this requirement, so long as a permitted application of Applicable Proceeds from the date of such investment or commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment invest is consummated within 180 days of such commitment 365th day;
(an “Acceptable Commitment”)3) to make a capital expenditure within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt of such Net Available Cash; provided furtherprovided, however, that any such capital expenditure made pursuant to a definitive binding agreement or a commitment approved by the Board of Directors of the Issuer that is executed or approved within such time will satisfy this requirement, so long as such investment is consummated within 180 days of such 365th day; or
(x4) any Applicable Proceeds relating to an Asset Disposition combination of clauses (1) through (3), provided, that, pending the final application of any Distribution Center Collateral such Net Available Cash in accordance with clauses (1), (2), (3) or High Store Collateral(4) of Section 4.08(c), the Issuer and the Restricted Subsidiaries may temporarily reduce Indebtedness or of Equity Collateral of otherwise invest such Net Available Cash in any Subsidiary of Propco manner not prohibited by this Indenture.
(d) Any Net Available Cash from Asset Dispositions that owns, directly is not applied or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (invested or committed to be appliedapplied or invested as provided in Section 4.08(c) pursuant hereof will be deemed to this clause (b) must be applied constitute “Excess Proceeds”. On the 366th day (or the 546th day, in the case of any Net Available Cash committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related used pursuant to a distribution center definitive binding agreement or a retail store that has High Store Status and, in each case, that become Collateral in accordance with commitment approved by the Security Documents, Board of Directors of the Issuer pursuant to Section 4.08(c)(2) or Section 4.08(c)(3) hereof) after the later of (A) the date of such Asset Disposition and (yB) any Applicable Proceeds relating to an Asset Disposition the receipt of any Non-High Store Collateralsuch Net Available Cash, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that if the aggregate amount of Applicable Excess Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than exceeds $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount25 million, the “Excess Proceeds”), then the Company or a Subsidiary shall Issuers will be required within ten (10) Business Days thereof to make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders holders of Notes and, if to the extent the Issuer or the Co-Issuer, as applicable, elects, or the Issuer or the Co-Issuer, as applicable, is required by the terms of any Parity Lien Obligationsother outstanding Pari Passu Indebtedness, to all holders of such Parity Lien Obligations other outstanding Pari Passu Indebtedness to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, any such Pari Passu Indebtedness to which the Asset Disposition Offer applies that may be purchased out of such the Excess Proceeds, if any, at an offer priceprice in respect of the Notes in an amount equal to (and, in the case of the Notesany Pari Passu Indebtedness, in cash in an amount equal to offer price of no more than) 100% of the principal amount thereof (or in of the event such other Indebtedness was issued with original issue discount, Notes and 100% of the accreted value thereof)principal amount of Pari Passu Indebtedness, in each case, plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness)any, to, but not including, the date fixed for the closing of such offerpurchase, in accordance with the procedures set forth in this Indenture and or the agreement agreements governing the Parity Lien Obligations Pari Passu Indebtedness, as applicable, and in the case of the Notes, in minimum denominations of $2,000 200,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause .
(3e) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations and Pari Passu Indebtedness so validly tendered or otherwise surrendered in connection with and not properly withdrawn pursuant to an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance OfferExcess Proceeds, the Advance Portion), Issuer and the Company or any Subsidiary Restricted Subsidiaries may use any remaining Excess Proceeds (orfor general corporate purposes, in to the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose extent not otherwise prohibited by the other covenants contained in this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an surrendered in any Asset Disposition Offer by Holders and other Pari Passu Indebtedness surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds (orProceeds, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds shall be allocated among the Notes and Parity Lien Obligations Pari Passu Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided Pari Passu Indebtedness. For the purposes of calculating the principal amount of any such Indebtedness not denominated in dollars, such Indebtedness shall be calculated by converting any such principal amounts into their Dollar Equivalent determined as of a date selected by the Issuer that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denominationis within the Asset Disposition Offer Period (as defined below). Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. .
(f) To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollarsthe currency in which the relevant Notes are denominated, the amount thereof payable in respect of the such Notes shall not exceed the net amount of funds in Dollars the currency in which such Notes are denominated that is actually received by Propco or a Subsidiary of Propco the Issuer upon converting such portion of the Net Available Cash into Dollarssuch currency.
(bg) The Asset Disposition Offer, in so far as it relates to the Notes, will remain open for a period of not less than 20 Business Days following its commencement (the “Asset Disposition Offer Period”): No later than five (5) Business Days after the termination of the Asset Disposition Offer Period (the “Asset Disposition Purchase Date”), the Issuers will purchase the principal amount of Notes and, to the extent it elects, Pari Passu Indebtedness required to be purchased by it pursuant to this Section 4.08 (the “Asset Disposition Offer Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered, all Notes and Pari Passu Indebtedness validly tendered in response to the Asset Disposition Offer.
(h) On or before the Asset Disposition Purchase Date, the Issuers will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Notes and Pari Passu Indebtedness or portions of Notes and Pari Passu Indebtedness so validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Notes and Pari Passu Indebtedness so validly tendered and not properly withdrawn and, in the case of the Notes, in minimum denominations of $200,000 and in integral multiples of $1,000 in excess thereof.
(i) The Issuer will deliver to the Trustee an Officer’s Certificate stating that such Notes or portions thereof were accepted for payment by the Issuer in accordance with the terms of this covenant. The Issuers or the Paying Agent, as the case may be, will promptly (but in any case not later than five (5) Business Days after termination of the Asset Disposition Offer Period) mail or deliver to each tendering Holder of Notes an amount equal to the purchase price of the Notes so validly tendered and not properly withdrawn by such Holder, and accepted by the Issuers for purchase, and the Issuers will promptly issue a new Note (or, in the case of Global Notes, cause the Paying Agent to reduce the aggregate principal amount and amend the applicable Global Note pursuant to Section 2.06(g) hereof and in the case of Definitive Registered Notes, deliver or cause to be delivered to the relevant Registrar for cancellation all Definitive Registered Notes accepted for purchase by the Issuer), and the Trustee, upon receipt of an Officer’s Certificate from the Issuer, will, via an authenticating agent, authenticate and mail or deliver (or cause to be transferred by book-entry) such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered; provided that each such new Note will be in a principal amount with a minimum denomination of $200,000. Any Note not so accepted will be promptly mailed or delivered (or transferred by book-entry) by the Issuer to the Holder thereof.
(j) For the purposes of clauses (i) and (ii) of Section 3.5(a4.08(b)(2), the following will be deemed to be cash:
(i1) the assumption by the transferee (or other extinguishment in connection with the transactions relating to such Asset Dispositions) of Indebtedness and any other liabilities (as recorded on the balance sheet of the Issuer or other liabilities, contingent or otherwise, of Propco or a any Restricted Subsidiary or in the footnotes thereto, or if incurred or accrued subsequent to the date of such balance sheet, such liabilities that would have been reflected on the Issuer’s or such Restricted Subsidiary’s balance sheet or in the footnotes thereof if such incurrence or accrual had taken place on or prior to the date of such balance sheet, as determined in good faith by the Issuer) of the Issuer or any Restricted Subsidiary (other than Subordinated Indebtedness of any of the Issuers) and the release of Propco the Issuer or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii2) securities, notes or other obligations received by Propco the Issuer or any Restricted Subsidiary from the transferee that are converted by Propco the Issuer or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii3) Indebtedness of any Restricted Subsidiary of Propco that is no longer a Restricted Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco the Issuer and each other Restricted Subsidiary (as applicable) are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and;
(iv4) consideration consisting of Parity Lien Debt Indebtedness of any of the Issuers (other than Subordinated Indebtedness) received after the Issue Date from Persons who are not the Company Issuer or any Subsidiary of the CompanyRestricted Subsidiary; and
(v5) any Designated Non-Cash Consideration received by Propco the Issuer or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 covenant that is at that time outstanding, not to exceed the greater of $50 million, 110 million and 1.5% of Total Assets (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value).
(ck) The Issuers 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 this Indenture. To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, regulations conflict with the provisions of this IndentureSection 4.08, the Company shall Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in under this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditionsconflict.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (Altice USA, Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Company shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, make directly or indirectly, consummate any Asset Disposition of any assets that do not constitute ABL Priority Collateral (“Non-ABL Priority Collateral”) unless:
: (i1) Propco the Company or such Subsidiary, as the case may be, Restricted Subsidiary receives consideration (including by way at the time of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) such Asset Disposition at least equal to the fair market Fair Market Value (including as to the value (such fair market value to be determined on the date of contractually agreeing to such Asset Disposition), as determined in good faith by Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than all non-cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company), consideration) of the securities shares and other assets subject to such Asset Disposition Disposition; (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
(ii2) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) thereof received by Propco the Company or such Subsidiary, as the case may be, Restricted Subsidiary is in the form of cash or Temporary Cash EquivalentsInvestments; provided that(3) without limitation of the provisions described under Section 4.15, in to the case extent that any consideration received by the Company or any Restricted Subsidiary from such Asset Disposition consists of an assets that constitute Notes Priority Collateral, such assets, including any such assets of any Person that becomes a Subsidiary Guarantor as a result of such transaction, are concurrently with their acquisition added to the Notes Priority Collateral; (4) the Net Available Cash from any such Asset Disposition of Real Property Collateral, or of Equity Notes Priority Collateral of any Subsidiary of Propco that owns, is either (i) paid directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not by the purchaser thereof to the Noteholder Collateral Agent to be held in trust in the form of cash Asset Sale Proceeds Account or Cash Equivalents must satisfy (ii) deposited to the requirements of a Permitted Asset SwapSale Proceeds Account within five Business Days after receipt thereof, in each case, for application in accordance with this Section 4.06; and
(iii5) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to or such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Restricted Subsidiary, as the case may be, elects:
) within 365 days of the receipt of such Net Available Cash: (A) for to make one or more offers to the Company or any Subsidiary Holders (and, at the option of the Company (iCompany, the holders of Other Pari Passu Lien Obligations) to reducepurchase Securities (and such Other Pari Passu Lien Obligations) pursuant to and subject to the conditions contained in this Indenture (each, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an “Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer”), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application in connection with any prepayment, repayment or purchase of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) Indebtedness pursuant to this clause (A), the Company or such Restricted Subsidiary shall permanently retire such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid or purchased; provided further that if the
(b) must be applied The Company shall not, and shall not permit any Restricted Subsidiary to, make any Asset Disposition of any ABL Priority Collateral, unless: (1) the Company or such Restricted Subsidiary receives consideration at the time of such Asset Disposition at least equal to the Fair Market Value (including as to the value of all non-cash consideration) of the shares and other assets subject to such Asset Disposition;
(4) Any Net Available Cash from an Asset Disposition covered by this Section 4.06(b) that is not invested or applied, or committed to be invested or applied, as provided in Section 4.06(b)(3) will be deemed to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that constitute “Excess ABL Proceeds”. When the aggregate amount of Applicable Excess ABL Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constitutingexceeds $15,000,000, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amountwithin 30 days thereof, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “ABL Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes Holders, and, if required by the terms of any Parity Other Pari Passu Lien Obligations to the holders of such Other Pari Passu Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum aggregate principal amount of the Securities and any such Notes and Parity Other Pari Passu Lien Obligations, on a pro rata basis, that may be purchased out of such the Excess Proceeds, if any, ABL Proceeds at an offer price, in the case of the Notes, price in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof)Securities and Other Pari Passu Lien Obligations, in each case, plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness)any, to, but not including, the date fixed for of purchase, subject to, without duplication, the closing right of such offerHolders of record on the relevant record date to receive interest due on the relevant interest payment date, in accordance with the procedures set forth in this Indenture and or the agreement agreements governing the Parity Other Pari Passu Lien Obligations Obligations, as applicable, and, with respect to the Securities, in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from The Company shall commence an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the ABL Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess ABL Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (Us Concrete Inc)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco shall The Company and any Permitted Affiliate Parent will not, and shall will not permit any of its the Restricted Subsidiaries to, to make any Asset Disposition unless:
(i1) Propco the Company, such Permitted Affiliate Parent or such Restricted Subsidiary, 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), ) (including as determined in good faith by Propco (and, in to the case value of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than all non-cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company), consideration) of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii2) in any such Asset Disposition (except to the extent unless the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date Disposition (on a cumulative basis), (including excluding any consideration by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise, other than Indebtedness) received by Propco the Company, such Permitted Affiliate Parent or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and
(iii3) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco reinvested or any Subsidiary, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any prepay the Loans or Other Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status andIndebtedness, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicableSection 2.05(b)(i) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into DollarsAgreement.
(b) For the purposes of clauses (i) and (ii) of this Section 3.5(a)4.10, the following will be deemed to be cash:
(i1) the assumption by the transferee of Indebtedness (other than Subordinated Obligations) of any Loan Party or other liabilities, contingent or otherwise, Indebtedness of Propco or a Restricted Subsidiary or that is not a Loan Party and the release of Propco such Loan Party or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset DispositionDisposition (in which case the relevant Borrower will, without further action, be deemed to have applied such deemed cash to Indebtedness in accordance with Section 2.05(b)(i) of this Agreement);
(ii2) securities, notes or other obligations received by Propco the Company, a Permitted Affiliate Parent or any Restricted Subsidiary from the transferee that are converted convertible by Propco the Company, such Permitted Affiliate Parent or such Restricted Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii3) Indebtedness of any Restricted Subsidiary of Propco that is no longer a Restricted Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco the Company, any Permitted Affiliate Parent and each other Restricted Subsidiary are released from any Guarantee guarantee of payment of the principal amount of such Indebtedness in connection with such Asset Disposition; and;
(iv4) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary Indebtedness of the Company; and, a Permitted Affiliate Parent or any Restricted Subsidiary;
(v5) any Designated Non-Cash Consideration received by Propco the Company, a Permitted Affiliate Parent or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value not to exceed 25.0% of the consideration from such Asset Disposition (excluding any consideration received from such Asset Disposition in accordance with Section 4.10(b)(1) to Section 4.10(b)(4)) (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received or, at the option of the Company or any Permitted Affiliate Parent, at the time of contractually agreeing to such Asset Disposition, and without giving effect to subsequent changes in value); 95007615_1
(6) in addition to any Designated Non-Cash Consideration received pursuant to Section 4.10(b)(5), any Designated Non-Cash Consideration received by the Company, a Permitted Affiliate Parent or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 4.10(b)(6) that is at that time outstanding, not to exceed the greater of $50 million, 75.0 million and 5.0% of Total Assets (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received or, at the option of the Company or any Permitted Affiliate Parent, at the time of contractually agreeing to such Asset Disposition, and without giving effect to subsequent changes in value.);
(c7) To consideration consisting of securities or obligations issued, insured or unconditionally guaranteed by a government (or any agency or instrumentality thereof) of a country where the extent that the provisions of Company, a Permitted Affiliate Parent or any securities laws Restricted Subsidiary is organized or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on located; and
(8) any no-action letters issued by the SEC indicating that the staff Capital Stock or assets of the SEC will not recommend enforcement action kind referred to in the event a tender offer satisfies certain conditionsdefinition of “Additional Assets”.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Additional Facility Joinder Agreement (Liberty Latin America Ltd.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Company shall not, and shall not permit any of its Subsidiaries Restricted Subsidiary to, make any Asset Disposition unless:
unless (i) Propco the Company or such Restricted Subsidiary, as the case may be, receives consideration (including by way of relief from, or by any other Person assuming sole responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company), Fair Market Value of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
and (ii) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 7580% of the consideration thereof received by the Company or such Restricted Subsidiary is in the form of cash, Temporary Cash Investments or other Qualified Proceeds (provided that the aggregate Fair Market Value of Qualified Proceeds (other than cash and Temporary Cash Investments) shall not exceed $10 million since the Closing Date). Within 365 days after the receipt of any Net Available Cash from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco Company or such Subsidiary, as the case Restricted Subsidiary may be, is in the form of cash or Cash Equivalents; provided that, in the case of apply an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and
(iii) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt amount equal to 100% of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal w) to such Net Available Cash (the “Applicable Proceeds”) is appliedrepay or cash collateralize any Credit Agreement Obligations, to the extent Propco or any Subsidiary, as the case may be, elects:
(A) for repay Indebtedness of the Company or any of its Restricted Subsidiaries secured by assets not in the Collateral, or to repay any Indebtedness of any Restricted Subsidiary that is not a Guarantor; (x) to acquire all or substantially all of the Company assets of another Permitted Business; (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (iiy) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including a capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco)expenditure; or (iiz) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or acquire other long-term assets that are used or useful in the subject of such Asset Disposition and are or become Collateral in accordance with the Security DocumentsPermitted Business; provided, however, that a binding agreement in connection with any prepayment, repayment or purchase of Indebtedness pursuant to clause (x) above, the Company or such Restricted Subsidiary shall retire such Indebtedness and shall cause the related loan commitment (if any) to be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that permanently reduced in an amount equal to Applicable Proceeds will the principal amount so prepaid, repaid or purchased. For the purposes of clause (a)(ii) of this Section 4.06 only, the following are deemed to be applied to satisfy such commitment within 180 days of such commitment cash: (an “Acceptable Commitment”); provided further, that (xA) any Applicable Proceeds relating to an Asset Disposition the assumption of any Distribution Center Collateral liabilities (as shown on the Company's or High Store Collateral, a Restricted Subsidiary's most recent balance sheet) of the Company or of Equity Collateral of any such Restricted Subsidiary of Propco (other than contingent liabilities and liabilities that owns, directly are by their terms subordinated to the Notes or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be appliedNote Guarantee) pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability in connection with such Asset Disposition and (B) any securities or other obligations received by the Company or any Restricted Subsidiary from the transferee that are converted within 90 days of receipt by the Company or such Restricted Subsidiary into cash. Pending the final application of any Net Available Cash, the Company or such Restricted Subsidiary may temporarily reduce revolving credit borrowings or otherwise invest the Net Available Cash in any manner that is not prohibited by this clause Indenture.
(b) must be Any Net Available Cash from Asset Dispositions that are not applied (or committed to be applied) to invest invested as provided in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part the preceding paragraphs of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that Section 4.06 shall constitute "Excess Proceeds." When the aggregate amount of Applicable Excess Proceeds from exceeds $15.0 million, the Issuers shall make an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition the "Offer”") no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to and all holders of such Parity Lien Obligations other Indebtedness that is pari passu in right of payment with the Notes containing provisions similar to those set forth in Section 4.06(c) with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, such other pari passu Indebtedness that may be purchased out of such the Excess Proceeds, if any, at an . The offer price, price in the case of the Notes, in cash in an amount any Offer shall be equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, including Additional Interest, if any (or such lesser price with respect any, to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offerpurchase, and shall be payable in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereofcash. To the extent that If any Applicable Excess Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining remain after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary Issuers may use any remaining those Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly and other pari passu Indebtedness tendered pursuant to an Asset Disposition into such Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance OfferProceeds, the Advance Portion), the Company Trustee shall allocate the Excess Proceeds among select the Notes and Parity Lien Obligations such other pari passu Indebtedness to be purchased on a pro rata basis on basis; provided, however, that the basis Issuers shall not be obligated to purchase Notes in denominations other than integral multiples of the aggregate $1,000 principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denominationat maturity. Upon completion of any Asset Disposition each Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) Promptly, and in any event within 10 days after the assumption Company becomes obligated to make an Offer, the Company shall be obligated to deliver to the Trustee and send, by first-class mail to each Holder, a written notice stating that the Holder may elect to have his Notes purchased by the transferee Company either in whole or in part (subject to prorating as hereinafter described in the event the Offer is oversubscribed) in integral multiples of Indebtedness $1,000 of principal amount, at the applicable purchase price. The notice shall specify a purchase date not less than 30 days nor more than 60 days after the date of such notice (the "Purchase Date") and shall contain such information concerning the business of the Company which the Company in good faith believes will enable such Holders to make an informed decision (which at a minimum shall include (1) 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 and any Current Report on Form 8-K of the Company filed subsequent to such Quarterly Report, other than Current Reports describing Asset Dispositions otherwise described in the offering materials (or other liabilitiescorresponding successor reports), contingent or otherwise(2) a description of material developments in the Company's business subsequent to the date of the latest of such reports, of Propco or a Subsidiary or and (3) if material, appropriate pro forma financial information) and all instructions and materials necessary to tender Notes pursuant to the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability Offer, together with the address referred to in connection with such Asset Disposition;clause (iii).
(ii) securitiesNot later than the date upon which written notice of an Offer is delivered to the Trustee as provided above, notes or other obligations received by Propco or any Subsidiary the Company shall deliver to the Trustee an Officers' Certificate as to (1) the amount of the Offer (the "Offer Amount"), (2) the allocation of the Net Available Cash from the transferee that are converted by Propco Asset Dispositions pursuant to which such Offer is being made and (3) the compliance of such allocation with the provisions of Section 4.06(a) and (b). Not later than one Business Day before the Purchase Date, the Company shall also irrevocably deposit with the Trustee or such Subsidiary into cash or with a paying agent (or, if the Company is acting as its own paying agent, segregate and hold in trust) an amount equal to the Offer Amount with written instructions for investment in Temporary Cash Equivalents, or by their terms are required Investments and to be satisfied held for cash and Cash Equivalents payment in accordance with the provisions of this Section 4.06. Upon the expiration of the period for which the Offer remains open (the "Offer Period"), the Company shall deliver to the extent Trustee for cancelation the Notes or portions thereof that have been properly tendered to and are to be accepted by the Company. The Trustee (or the Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering Holder in the amount of the cash or Cash Equivalents received)purchase price. In the event that the Offer Amount delivered by the Company to the Trustee is greater than the purchase price of the Notes (and such other pari passu Indebtedness) tendered, the Trustee shall deliver the excess to the Company immediately after the expiration of the Offer Period for application in each case, within 180 days following the closing of such Asset Disposition;accordance with this Section 4.06.
(iii) Indebtedness of any Subsidiary of Propco that is no longer Holders electing to have a Subsidiary of Propco as a result of such Asset DispositionNote purchased shall be required to surrender the Note, with an appropriate form duly completed, to the extent Company 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 Note or Notes which were delivered by the Holder for purchase and a statement that Propco such Holder is withdrawing his election to have such Note or Notes purchased. If at the expiration of the Offer Period the aggregate principal amount of Notes and each any such other Subsidiary are released from any Guarantee of payment of pari passu Indebtedness included in the Offer surrendered by holders thereof exceeds the Offer Amount, the Company shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes and such other pari passu Indebtedness in connection with such Asset Disposition; anddenominations of $1,000, or integral multiples thereof, shall be purchased). 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
(iv) consideration consisting of Parity Lien Debt received after At the Issue Date from Persons who are not time the Company delivers Notes to the Trustee which are to be accepted for purchase, the Company shall also deliver an Officers' Certificate stating that such Notes are to be accepted by the Company pursuant to and in accordance with the terms of this Section. A Note shall be deemed to have been accepted for purchase at the time the Trustee, directly or any Subsidiary of through an agent, mails or delivers payment therefor to the Company; andsurrendering Holder.
(v) The Issuers shall comply in all material respects with the requirements of Rule 14e-1 under the Exchange Act and any Designated Non-Cash Consideration received by Propco or any Subsidiary other securities laws and regulations thereunder to the extent those laws and regulations are applicable in such Asset Dispositions having an aggregate fair market value, taken together connection with all other Designated Non-Cash Consideration received each repurchase of Notes pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) an Offer. To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, regulations conflict with the Asset Disposition provisions of this Indenture, the Company Issuers shall comply in all material respects with the applicable securities laws and regulations and shall not be deemed to have breached its their obligations described in under the Asset Disposition provisions of this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditionssuch conflict.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (On Semiconductor Corp)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Parent Guarantor shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco the Parent Guarantor or such Restricted Subsidiary, 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company)Parent Guarantor, of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
(ii2) in any such Asset Disposition Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap)) with a purchase price in excess of $150 million and 15.0% of LTM EBITDA, at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), ) (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco the Parent Guarantor or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided thatprovided, in however, to the case of extent that any assets subject to an Asset Disposition of Real Property were Collateral, or of Equity the non-cash consideration received is pledged as Collateral of any Subsidiary of Propco that ownsunder the Collateral Documents substantially simultaneously with such sale, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy accordance with the requirements of a Permitted Asset Swapthis Indenture and the Collateral Documents; and
(iii3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied, either:
(i) within 365 450 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:Cash,
(A) for the Company or any Subsidiary of the Company (ia) to reduce, prepay, repay or purchase any Parity Indebtedness that is secured by a First Priority Lien Obligations (other than including, to the Notesextent secured by a First Priority Lien, the Indebtedness under the Credit Agreement or ABL Credit Agreement incurred pursuant to SECTION 3.2(b)(1) (or any Refinancing Indebtedness in respect thereof)); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,or
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien reduce Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of under the Notes at such Holder’s registered address as provided under SECTION 5.7, through open market purchases or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (; or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) For the purposes of clauses (i) and (ii) of Section 3.5(a), the following will be deemed to be cash:
(i) the assumption by the transferee of Indebtedness or other liabilities, contingent or otherwise, of Propco or a Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent to prepay, repay or purchase Pari Passu Indebtedness; provided that the provisions of any securities laws Parent Guarantor or regulationssuch Restricted Subsidiary, including Rule 14e-1 as applicable, shall equally and ratably reduce Obligations under the Exchange ActNotes (A) through open market purchases, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture (B) by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the redeeming Notes as a result of provided under SECTION 5.7, or (C) by making an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.Offer; or
Appears in 1 contract
Sources: Indenture (iHeartMedia, Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco shall The Issuer will not, and shall will not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:
(i1) Propco the Issuer or such Restricted Subsidiary, as the case may be, receives consideration (including by way at the time of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) such Asset Disposition 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 Propco the Board of Directors (and, in including as to the case value of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than all non-cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Companyconsideration), of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental takingDisposition;
(ii2) in any such Asset Disposition (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco the Issuer or such Restricted Subsidiary, as the case may be, from such Asset Disposition is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property CollateralEquivalents or Additional Assets, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swapcombination thereof; and
(iii3) within 365 days from except as provided in the later of (A) the date of such Asset Disposition and (B) the receipt next paragraph an amount equal to 100% of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth belowis applied, within one year from the “Proceeds Application Period”), an amount equal to later of the date of such Asset Disposition or the receipt of such Net Available Cash Cash, by the Issuer or such Restricted Subsidiary, as the case may be:
(the “Applicable Proceeds”a) is applied, to the extent Propco the Issuer or any Restricted Subsidiary, as the case may be, elects:
elects (A) for or is required by the Company terms of any Indebtedness), to prepay, repay, redeem or any Subsidiary purchase Indebtedness of the Company (i) Issuer under the Senior Secured Credit Agreement, any other Indebtedness of the Issuer or a Subsidiary Guarantor that is secured by a Lien permitted to reduce, prepay, repay be Incurred under this Indenture or purchase any Parity Lien Obligations Indebtedness (other than the Notes); provided Disqualified Stock) of any Wholly-Owned Subsidiary that the Company or is not a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security DocumentsGuarantor; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateralthat, in each case applied (connection with any prepayment, repayment, redemption or committed to be applied) purchase of Indebtedness pursuant to this clause (ba), the Issuer or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) must be applied (or committed to be applied) permanently reduced in an amount equal to invest in other Distribution Center Collateral the principal amount so prepaid, repaid or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documentspurchased; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause or
(b) to invest in Store Collateral or properties or assets constituting, part Additional Assets; provided that pending the final application of or related to a retail store that become Collateral any such Net Available Cash in accordance with this Section 4.16, the Security Documents shall Issuer and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net Available Cash in any manner not prohibited by this Indenture. Any Net Available Cash from Asset Dispositions that is not applied or invested as provided in the preceding paragraph will be no greater deemed to constitute “Excess Proceeds.” Not later than $180 million after the Issue Date; and provided further day following the date that is one year from the later of the date of such Asset Disposition or the receipt of such Net Available Cash, if the aggregate amount of Applicable Excess Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than exceeds $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount15.0 million, the “Excess Proceeds”), then the Company or a Subsidiary shall Issuer will be required to make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if and to the extent required by the terms of any Parity Lien Obligationsother Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Issuer to make an offer to purchase such Parity Lien Obligations Pari Passu Indebtedness with the proceeds from any Asset Disposition (“Pari Passu Notes”), to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, any such Pari Passu Notes to which the Asset Disposition Offer applies that may be purchased out of such the Excess Proceeds, if any, at an offer price, in the case of the Notes, price in cash in an amount equal to 100% of the principal amount thereof (or or, in the event such other Pari Passu Indebtedness of the Issuer was issued with significant original issue discount, 100% of the accreted value thereof), ) of the Notes and Pari Passu Notes plus accrued and unpaid interestinterest and Liquidated Damages, if any any, (or in respect of such Pari Passu Indebtedness, such lesser price with respect to Parity Lien Obligations price, if any, as may be provided for by the terms of such other Indebtedness), to, but not including, ) to the date fixed for of purchase (subject to the closing right of such offerholders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the procedures set forth in this Indenture and or the agreement agreements governing the Parity Lien Obligations Pari Passu Notes, as applicable, in minimum denominations of $2,000 and each case in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture2,000. If the aggregate principal amount (of Notes surrendered by holders thereof and other Pari Passu Notes surrendered by holders or accreted valuelenders, as applicable) of the Notes orcollectively, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance OfferProceeds, the Advance Portion), the Company Trustee shall allocate the Excess Proceeds among select the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided Pari Passu Notes. To the extent that no the aggregate amount of Notes or Parity Lien Obligations will be selected and purchased Pari Passu Notes so validly tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for general corporate purposes, subject to the other covenants contained in an unauthorized denominationthis Indenture. Upon completion of any such Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. The Asset Disposition Offer will remain open for a period of 20 Business Days following its commencement, except to the extent that a longer period is required by applicable law (the “Asset Disposition Offer Period”). No later than five Business Days after the termination of the Asset Disposition Offer Period (the “Asset Disposition Purchase Date”), the Issuer will purchase the principal amount of Notes and Pari Passu Notes required to be purchased pursuant to this Section 4.16 (the “Asset Disposition Offer Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered, all Notes and Pari Passu Notes validly tendered in response to the Asset Disposition Offer. If the Asset Disposition 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 Liquidated Damages, 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 further interest or Liquidated Damages will be payable to holders who tender Notes pursuant to the Asset Disposition Offer. On or before the Asset Disposition Purchase Date, the Issuer will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Notes and Pari Passu Notes or portions of Notes and Pari Passu Notes so validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Notes and Pari Passu Notes so validly tendered and not properly withdrawn, in each case in integral multiples of $2,000. The Issuer will deliver to the Trustee an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Issuer in accordance with the terms of this Section 4.16 and, in addition, the Issuer will deliver all certificates and notes required, if any, by the agreements governing the Pari Passu Notes. The Issuer or the paying agent, as the case may be, will promptly (but in any case not later than five Business Days after the termination of the Asset Disposition Offer Period) mail or deliver to each tendering Holder or holder or lender of Pari Passu Notes, as the case may be, an amount equal to the purchase price of the Notes or Pari Passu Notes so validly tendered and not properly withdrawn by such holder or lender, as the case may be, and accepted by the Issuer for purchase, and the Issuer will promptly issue a new Note, and the Trustee, upon delivery of an Officers’ Certificate from the Issuer, will authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered; provided that each such new Note will be in a principal amount of $2,000 or an integral multiple of $2,000. In addition, the Issuer will take any and all other actions required by the agreements governing the Pari Passu Notes. Any Note not so accepted will be promptly mailed or delivered by the Issuer to the Holder thereof. The Issuer will publicly announce the results of the Asset Disposition Offer on the Asset Disposition Purchase Date. The Issuer will comply, to the extent applicable, with the requirements of Rule 14e-1 of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Indenture. To the extent that the provisions of any portion securities laws or regulations conflict with provisions of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollarsthis Section 4.16, the amount thereof payable in respect Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Indenture by virtue of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco its compliance with such securities laws or a Subsidiary of Propco upon converting such portion into Dollars.
(b) regulations. For the purposes of clauses clause (i) and (ii2) of the first paragraph of this Section 3.5(a)4.16, the following will be deemed to be cash:
(i1) the assumption by the transferee of Indebtedness (other than Subordinated Obligations or Disqualified Stock) of the Issuer or Indebtedness of a Restricted Subsidiary (other liabilities, contingent than Guarantor Subordinated Obligations or otherwise, Disqualified Stock of Propco or any Restricted Subsidiary that is a Subsidiary or Guarantor) and the release of Propco the Issuer or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;Disposition (or in lieu of such a release, the agreement of the acquirer or its parent company to indemnify and hold the Issuer or such Restricted Subsidiary harmless from and against any loss, liability or cost in respect of such assumed Indebtedness; provided, however, that such indemnifying party (or its long term debt securities) shall have an Investment Grade Rating (with no indication of a negative outlook or credit watch with negative implications, in any case, that contemplates such indemnifying party (or its long term debt securities) failing to have an Investment Grade Rating), in which case the Issuer will, without further action, be deemed to have applied such deemed cash to Indebtedness in accordance with clause (3)(a) of the first paragraph of this Section 4.16; and
(ii2) securities, notes or other obligations received by Propco the Issuer or any Restricted Subsidiary from the transferee that are converted by Propco the Issuer or such Restricted Subsidiary into cash or Cash Equivalentswithin 90 days after receipt thereof. Notwithstanding the foregoing, or by their terms are required the 75% limitation referred to in clause (2) of the first paragraph of this Section 4.16 shall be deemed satisfied for cash and Cash Equivalents (with respect to the extent of any Asset Disposition in which the cash or Cash Equivalents received)portion of the consideration received therefrom, determined in each caseaccordance with the foregoing provision on an after-tax basis, within 180 days following is equal to or greater than what the closing of after-tax proceeds would have been had such Asset Disposition;
Disposition complied with the aforementioned 75% limitation. The requirement of clause (iii3)(b) Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to first paragraph of this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company 4.16 above shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued be satisfied if an agreement (including a lease, whether a capital lease or an operating lease) committing to make the acquisitions or expenditures referred to therein is entered into by the SEC indicating that Issuer or its Restricted Subsidiary within the staff of the SEC will not recommend enforcement action specified time period and such Net Available Cash is subsequently applied in the event a tender offer satisfies certain conditionsaccordance with such agreement within six months following such agreement.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.
Appears in 1 contract
Sources: Indenture (Chaparral Energy, Inc.)
Limitation on Sales of Assets and Subsidiary Stock. (a) Propco The Borrower shall not, and shall not permit any of its the Restricted Subsidiaries to, make any Asset Disposition other than Dispositions contemplated on the Closing Date; provided that any such Dispositions in a principal amount in excess of $3.0 million is set forth on Schedule 7.05 to the Closing Date Certificate, unless:
: (i) Propco Holdings or such Restricted Subsidiary, 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 Propco (and, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, Real Property Collateral, in each case for consideration other than cash or Cash Equivalents, will be based on one or more broker opinions of value from a broker of national standing selected by the Company)Borrower, of the securities shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap), unless such Asset Disposition occurred in connection with a governmental taking;
; (ii) in any such Asset Disposition Disposition, or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap)) with a purchase price in excess of the greater of $32.0 million and 15.0% of LTM EBITDA, at least 7575.0% of the consideration from such Asset Disposition, together with all other Asset Dispositions since the Issue Closing Date (on a cumulative basis), (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Propco the Borrower or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; provided that, in the case of an Asset Disposition of Real Property Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly throughout one or more Subsidiaries, Real Property Collateral, any consideration that is not in the form of cash or Cash Equivalents must satisfy the requirements of a Permitted Asset Swap; and
and (iii) within 365 days from the later of (A) the date of such Asset Disposition and (B) the receipt of the Net Available Cash from such Asset Disposition (as may be extended by an Acceptable Commitment as set forth below, the “Proceeds Application Period”Borrower complies with Section 2.05(b)(ii), an amount equal to such Net Available Cash (the “Applicable Proceeds”) is applied, to the extent Propco or any Subsidiary, as the case may be, elects:
(A) for the Company or any Subsidiary of the Company (i) to reduce, prepay, repay or purchase any Parity Lien Obligations (other than the Notes); provided that the Company or a Subsidiary shall use a ratable amount to offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to redeem a ratable amount of Notes as described in Section 5.6 or purchase a ratable amount of Notes through open-market purchases or in privately negotiated transactions, or (ii) to make an offer (in accordance with the procedures set forth below for an Asset Disposition Offer), redeem Notes as described in Section 5.6 or purchase Notes through open-market purchases or in privately negotiated transactions,
(B) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, by Propco or any Subsidiary of Propco (i) to invest (including capital expenditures) in Additional Assets that are or will become Collateral in accordance with the Security Documents (including by means of an investment in Additional Assets by Propco or a Subsidiary of Propco); or (ii) to invest (including capital expenditures) in any one or more properties or assets that replace the properties and/or assets that are the subject of such Asset Disposition and are or become Collateral in accordance with the Security Documents; provided, however, that a binding agreement shall be treated as a permitted application of Applicable Proceeds from the date of such commitment with the good faith expectation that an amount equal to Applicable Proceeds will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”); provided further, that (x) any Applicable Proceeds relating to an Asset Disposition of any Distribution Center Collateral or High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Distribution Center Collateral or High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in other Distribution Center Collateral or High Store Collateral or properties or assets constituting, part of or related to a distribution center or a retail store that has High Store Status and, in each case, that become Collateral in accordance with the Security Documents, and (y) any Applicable Proceeds relating to an Asset Disposition of any Non-High Store Collateral, or of Equity Collateral of any Subsidiary of Propco that owns, directly or indirectly through one or more Subsidiaries, any Non-High Store Collateral, in each case applied (or committed to be applied) pursuant to this clause (b) must be applied (or committed to be applied) to invest in (1) other Store Collateral with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (2) properties or assets constituting, part of or related to a retail store with a rating from the Store Grader not lower than the rating assigned to such Non-High Store Collateral, (3) Distribution Center Collateral or (4) properties or assets constituting, part of or related to a distribution center, in each case, that become Collateral in accordance with the Security Documents; provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Distribution Center Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $180 million after the Issue Date; and provided further that the aggregate amount of Applicable Proceeds from an Asset Disposition of Store Collateral that may be applied pursuant to this clause (b) to invest in Store Collateral or properties or assets constituting, part of or related to a retail store that become Collateral in accordance with the Security Documents shall be no greater than $500 million after the Issue Date when aggregated with the fair market value of any Permitted Asset Swap after the Issue Date of Store Collateral for real property that will become Store Collateral; or
(C) other than with respect to Applicable Proceeds relating to an Asset Disposition of any Specified Real Estate Asset, any combination of the foregoing; provided that Propco (or any Subsidiary of Propco, as the case may be) may elect to invest in Additional Assets that are or become Collateral in accordance with the Security Documents and otherwise in compliance with the requirements set forth above prior to receiving the Applicable Proceeds attributable to any given Asset Disposition (provided that such investment shall be made no earlier than the earliest of notice to the Trustee of the relevant Asset Disposition, execution of a definitive agreement for the relevant Asset Disposition, and consummation of the relevant Asset Disposition) and deem the amount so invested to be applied pursuant to and in accordance with clause (b) above with respect to such Asset Disposition. If, with respect to any Asset Disposition, at the expiration of the Proceeds Application Period with respect to such Asset Disposition, there remain cumulative Applicable Proceeds in excess of $100 million (such amount, the “Excess Proceeds”), then the Company or a Subsidiary shall make an offer (an “Asset Disposition Offer”) no later than ten business days after the expiration of the Proceeds Application Period to all Holders of Notes and, if required by the terms of any Parity Lien Obligations, to all holders of such Parity Lien Obligations to purchase the maximum principal amount of such Notes and Parity Lien Obligations, on a pro rata basis, that may be purchased out of such Excess Proceeds, if any, at an offer price, in the case of the Notes, in cash in an amount equal to 100% of the principal amount thereof (or in the event such other Indebtedness was issued with original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or such lesser price with respect to Parity Lien Obligations as may be provided by the terms of such other Indebtedness), to, but not including, the date fixed for the closing of such offer, in accordance with the procedures set forth in this Indenture and the agreement governing the Parity Lien Obligations in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. To the extent that any Applicable Proceeds from an Asset Disposition are from a disposition of Collateral the fair market value of which exceeds $10.0 million in the aggregate, such Applicable Proceeds will be deposited with the Collateral Trustee and held as Collateral pending application pursuant to clause (3) above or the immediately preceding paragraph and, in the case of the immediately preceding paragraph, released to Propco or any Subsidiary of Propco if remaining after consummation of the Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion). Notices of an Asset Disposition Offer shall be sent by first class mail or sent electronically, at least 10 days but not more than 60 days before the purchase date to each Holder of the Notes at such Holder’s registered address or otherwise in accordance with the applicable procedures of DTC. The Company or a Subsidiary may satisfy the foregoing obligation with respect to any Applicable Proceeds from an Asset Disposition by making an Asset Disposition Offer prior to the expiration of the Proceeds Application Period (the “Advance Offer”) with respect to all or a part of the Applicable Proceeds (the “Advance Portion”) in advance of being required to do so by this Indenture. To the extent that the aggregate amount (or accreted value, as applicable) of Notes and, if applicable, any other Parity Lien Obligations validly tendered or otherwise surrendered in connection with an Asset Disposition Offer is less than the amount offered in an Asset Disposition Offer (or, in the case of an Advance Offer, the Advance Portion), the Company or any Subsidiary may use any remaining Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion) (the “Declined Excess Proceeds”) for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount (or accreted value, as applicable) of the Notes or, if applicable, Parity Lien Obligations validly tendered pursuant to an Asset Disposition Offer exceeds the amount of Excess Proceeds (or, in the case of an Advance Offer, the Advance Portion), the Company shall allocate the Excess Proceeds among the Notes and Parity Lien Obligations to be purchased on a pro rata basis on the basis of the aggregate principal amount (or accreted value, as applicable) of tendered Notes and Parity Lien Obligations; provided that no Notes or Parity Lien Obligations will be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. To the extent that any portion of Net Available Cash or Applicable Proceeds payable in respect of the Notes is denominated in a currency other than Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in Dollars that is actually received by Propco or a Subsidiary of Propco upon converting such portion into Dollars.
(b) [Reserved].
(c) [Reserved].
(d) [Reserved].
(e) [Reserved].
(f) For the purposes of clauses (iSection 7.05(a)(ii) and (ii) of Section 3.5(a)hereof, the following will shall be deemed to be cash:
: (i) the assumption by the transferee of Indebtedness or other liabilities, liabilities contingent or otherwise, otherwise of Propco the Borrower or a Restricted Subsidiary or the release of Propco or such Subsidiary from all liability on such Indebtedness or (other liability in connection with such Asset Disposition;
(ii) securities, notes or other obligations received by Propco or any Subsidiary from the transferee that are converted by Propco or such Subsidiary into cash or Cash Equivalents, or by their terms are required to be satisfied for cash and Cash Equivalents (to the extent of the cash or Cash Equivalents received), in each case, within 180 days following the closing of such Asset Disposition;
(iii) than Subordinated Indebtedness of any Subsidiary of Propco that is no longer a Subsidiary of Propco as a result of such Asset Disposition, to the extent that Propco and each other Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition; and
(iv) consideration consisting of Parity Lien Debt received after the Issue Date from Persons who are not the Company or any Subsidiary of the Company; and
(v) any Designated Non-Cash Consideration received by Propco or any Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
(c) To the extent that the provisions of any securities laws or regulations, including Rule 14e-1 under the Exchange Act, conflict with the provisions of this Indenture, the Company shall not be deemed to have breached its obligations described in this Indenture by virtue of compliance therewith. The Company may rely on any no-action letters issued by the SEC indicating that the staff of the SEC will not recommend enforcement action in the event a tender offer satisfies certain conditions.
(d) The provisions of this Indenture relative to the Company’s obligation to make an offer to repurchase the Notes as a result of an Asset Disposition may be waived or modified with the written consent of the Holders of a majority in principal amount of the Notes then outstanding.-171- #96501157v12
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