Merrimack, N.H. - October 4, 2010. Brookstone Company, Inc. announced that $154,263,000 principal amount of its 12% Second Lien Senior Secured Notes due 2012 had been tendered by 5:00 p.m. New York City time on October 1, 2010 in response to Brookstone's offer to purchase 2012 Notes for cash (subject to possible proration) or acquire them in exchange for new 13% Second Lien Senior Secured Notes due 2014. That is 90.74% of all of the outstanding 2012 Notes.
Brookstone's offer will not expire until October 18, 2010 (or a later date if it is extended). However, the time for tendering holders to elect to receive cash expired at 5:00 p.m., New York City time on October 1. All holders who tender 2012 Notes after that time will receive their consideration solely in the form of 2014 Notes, at the rate of $900 principal amount of 2014 Notes per $1,000 principal amount of 2012 Notes. Also, the right of tendering holders to withdraw tenders expires at that time.
One of the conditions to Brookstone's obligation to acquire 2012 Notes that are tendered in response to its offer is that at least 95% in principal amount of 2012 Notes be tendered. Tenders of an additional $7,237,000 of 2012 Notes before the offer expires would cause the 95% minimum tender condition to be met. Even if the condition is not satisfied by tenders between October 1 and the October 18 expiration of the offer, Brookstone has the right to waive the condition with the consent of holders of 66 2/3% of the 2012 Notes that were tendered by 5:00 p.m. on October 1.
Tenders of 2012 Notes are automatically accompanied by consents to amend the Indenture that governs the 2012 Notes to remove all the covenants and events of default, other than those relating to the obligation to pay principal and interest when it is due, and to release the collateral for the 2012 Notes, which is substantially all the assets of Brookstone and its subsidiaries. If Brookstone acquires the tendered 2012 Notes, those assets will become collateral for the 2014 Notes. The consents that were received by October 1, 2010 are sufficient to enable Brookstone to amend the Indenture whenever Brookstone agrees to accept all the 2012 Notes that are validly tendered and not withdrawn and Brookstone waives all the conditions to its obligation to do that (including the condition that 95% in principal amount be tendered).