A cash event is essentially a significant transaction where a company sells off a large portion of its assets for cash.
According to the provided reference, a "Cash Event" is defined as:
Cash Event means any transaction or series of related transactions whereby all or substantially all of the assets of the Company and its Subsidiaries, taken together, are sold or otherwise disposed of (other than a sale contemporaneously with and in contemplation of a Qualified MLP Offering) wherein not less than 85% ...
This definition highlights several key characteristics of a cash event:
- Sale of Assets: It involves selling or disposing of assets.
- Substantial Portion: It includes "all or substantially all" of the company's assets and those of its subsidiaries. Specifically, the reference notes "...not less than 85%...", implying that at least 85% of the assets must be involved.
- Series of Transactions: It can consist of one transaction or a series of related transactions.
- Exclusion: It typically excludes sales done in preparation for a Qualified MLP (Master Limited Partnership) Offering.
- Cash is Key: The underlying purpose is to generate a substantial amount of cash for the company.
In simpler terms, imagine a company deciding to sell off most of its factories, equipment, and other holdings in exchange for a large sum of money. That would be a cash event. However, selling assets to prepare for a specific type of offering (Qualified MLP Offering) might not be considered a cash event under this definition.
