The Marret Plan will proceed unless, by April 30, 2013, Cline implements a transaction which results in any of (i) a takeover bid of, or other business combination with, Cline in which any person or group of persons acting in concert acquires 50% or more of the equity securities of Cline, (ii) the sale of all or substantially all of the assets or business of Cline and its subsidiaries, or (iii) a recapitalization of Cline, subject to certain conditions including that as a result of such recapitalization Cline receives at least CDN$35,000,000 of gross cash proceeds from the issuance of equity securities or, as a result of such sale, Cline receives sufficient net proceeds to repay all amounts (including interest, premium, principal and other fees) owing on or under the Bonds and the other financing documents.
A detailed description of the Marret Plan and timing is set out in the Restructuring Announcement.
On the completion of the purchase of the New Bonds noted above, including the receipt of the various fees paid to the Company in Bonds, the Company's exposure to Cline will increase from approximately 6% to 8.7% of the net asset value of the Company ("NAV"). Assuming the completion of the Marret Plan, the Company's exposure to Cline will increase from an estimated 14% to 18% of NAV, depending on the amount taken up by the Company under the Standby Commitment and based on the current NAV.
The Company has adopted an investment restriction which provides that the net amount invested by the Company in the securities of any one issuer at the time of investment may not exceed 10% of NAV (the "10 Percent Investment Restriction"). To allow the Company to participate in the proposed Cline restructuring and the Marret Plan as outlined above, the non-Marret members of the board of directors of the Company have waived the application of the 10 Percent Investment Restriction in respect of the Company's participation in the proposed Cline restructuring.
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