MERRIMACK, N.H., Oct. 6 /PRNewswire/ -- Brookstone Company Inc. has agreed to purchase all of its 12% Second Lien Senior Secured Notes due 2012 that have been or are validly tendered in response to Brookstone's Amended Offer to Purchase or Exchange and Consent Solicitation and Brookstone has waived all conditions to its obligation to acquire the 2012 Notes that are validly tendered before the Amended Offer expires, including the condition that at least 95% in principal amount of the 2012 Notes be validly tendered and not withdrawn (which Brookstone waived with the consent of holders of more than 66 2/3% of the 2012 Notes that were tendered by 5:00 New York City time on October 1, 2010).
The time to elect to receive cash was to expire at 5:00 New York City time on October 1, 2010 and the Amended Offer was scheduled to expire in its entirety at 5:00 New York City time on October 18, 2010. However, Brookstone has now extended its Amended Offer until 5:00 p.m. New York City time on October 21, 2010, and will permit holders to elect to receive cash (subject to proration) until that time.
Tenders of 2012 Notes included consents to amend the Indenture that governs the 12% Notes to eliminate all the covenants other than those requiring payment of principal and interest on the 2012 Notes when it is due, to eliminate all the Events of Default other than those relating to failure to pay principal and interest on the 2012 Notes when it is due, and to release the collateral for the 2012 Notes. Because those consents have been received from holders of more than 66 2/3% of the outstanding 2012 Notes and Brookstone has agreed to acquire all the 2012 Notes that are validly tendered and have not been withdrawn, Brookstone expects within the next day or two to execute a Supplemental Indenture effecting the amendments to the Indenture. Those amendments will become operative when Brookstone delivers the cash and new notes that are the consideration for the tendered Old Notes, which will happen shortly after the Amended Offer expires on October 21, 2010 (unless it is extended).
When the collateral for the 2012 Notes, which is a second lien on substantially all the assets of Brookstone and its subsidiaries, is released, it will become collateral for the at least $120.4 million of 2014 Notes that will be issued as the major part of the consideration for the tendered 2012 Notes. The 2012 Notes will thereafter no longer be secured.
Brookstone has offered to purchase 2012 Notes for $975 in cash for each $1,000 of 2012 Notes that are tendered or to issue 13% Second Lien Senior Secured Notes due 2014 in exchange for tendered 2012 Notes at the rate of $900 principal amount of 2014 Notes for each $1,000 principal amount of 2012 Notes. However, only $20 million is available for cash purchases, and to the extent that sum is not sufficient to purchase all the 2012 Notes that are tendered for cash, the $20 million will be prorated among holders who elect to receive cash in proportion to the principal amounts of 2012 Notes as to which they elect to receive cash, and they will receive 2014 notes with a principal amount equal to 90% of the remaining principal amount of those 2012 Notes.
At 5:00 p.m. on October 5, 2010, $154,278,000 principal amount of 2012 Notes had been validly tendered in response to Brookstone's Amended Offer and not withdrawn. Of this, holders of $151,066,000 principal amount had elected to receive cash. Holders who do not elect to receive cash will receive 2014 Notes with a principal amount equal to 90% of the principal amount of the 2012 Notes they tendered.
Philip Roizin, EVP, Operations and Chief Financial Officer
SOURCE Brookstone Company, Inc.