SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER THE
TRUST INDENTURE ACT OF 1939
- -------------------------------------------------------------------------------
Planet Hollywood International, Inc.
(Name of applicant)
8669 Commodity Circle, Orlando, Florida 32819
- -------------------------------------------------------------------------------
(Address of principal executive offices)
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
TITLE OF CLASS AMOUNT
10% Secured Deferrable Interest Notes $95,000,000
Due 2005
Approximate date of issuance: February 29, 2000
Name and address of agent for service: Robert Earl
Planet Hollywood International,
Inc.
8669 Commodity Circle
Orlando, Florida 32819
(407) 903-5500
With a copy to:
David L. Finkelman, Esq.
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York
10038-4982
(212) 806-5400
The applicant hereby amends this application for qualification on such
date or dates as may be necessary to delay its effectiveness until (i) the 20th
day after the filing of a further amendment which specifically states that it
shall supersede this amendment, or (ii) such date as the Commission, acting
pursuant to Section 307(c) of the Trust Indenture Act of 1939, as amended (the
"Act"), may determine upon the written request of the applicant.
<PAGE>
GENERAL
1. GENERAL INFORMATION. Furnish the following as to the applicant:
(a) Form of organization:
A corporation.
(b) State or other sovereign power under the laws of which
organized:
Delaware
2. SECURITIES ACT EXEMPTION APPLICABLE. State briefly the facts relied
upon by the applicant as a basis for the claim that registration of the
indenture securities under the Securities Act of 1933 is not required.
Planet Hollywood International, Inc., a Delaware corporation (the
"Company"), proposes to issue, as part of the First Amended Joint Plan of
Reorganization of Planet Hollywood International, Inc. and certain of its
subsidiaries that are named as debtors therein dated December 13, 1999 (the
"Plan of Reorganization"), its 10% Secured Deferrable Interest Notes Due 2005
(the "Notes"). Pursuant to the Plan of Reorganization, (a) each holder of an
allowed Class 5 Claim (as defined in the Plan of Reorganization) is entitled to
receive its pro rata share of (i) a cash payment of $47.5 million, (ii) $60
million principal amount of Notes and (iii) 2.65 million shares of New Class A
Common Stock (as defined in the Plan of Reorganization) and (b) each holder of
an allowed Class 6 Claim (as defined in the Plan of Reorganization) is entitled
to receive cash and Notes having an aggregate value as a percentage of its
Allowed Claim (as defined in the Plan of Reorganization), equal to the aggregate
value of the consideration to be received by each holder of a Class 5 Claim as a
percentage of its Allowed Claim. The cash component of the distribution to
holders of Class 6 Claims shall be the same percentage of such holders' Allowed
Claims as the cash component of the distribution to holders of Class 5 Claims is
as a percentage of the Allowed Claims of holders in Class 5, counting a
distribution of Notes to Class 5 as a cash component.
The Company has filed with the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court") a First Amended Disclosure
Statement (the "Disclosure Statement") that was distributed to holders of Class
5 and Class 6 Claims under the Plan of Reorganization for the purpose of
soliciting their votes for the acceptance or rejection of the Plan of
Reorganization. At a hearing held on December 9, 1999, the Bankruptcy Court
approved the Disclosure Statement as containing adequate information in
accordance with Section 1125 of the Bankruptcy Code. Following a hearing held
on January 20, 2000, the Bankruptcy Court entered an order dated January 21,
2000 confirming the Plan of Reorganization. A copy of the Disclosure Statement,
with the Plan of Reorganization annexed thereto as an exhibit, is attached
hereto as Exhibit T3E. The Notes are to be issued under an indenture (the
"Indenture") among the Company, as Issuer, the Subsidiary Guarantors named
therein and United States Trust Company of New York, as trustee, a form of which
is attached hereto as Exhibit T3C.
The Company believes that the issuance of the Notes is exempt from the
registration requirements of the Securities Act of 1933 (the "Securities Act")
pursuant to Section 1145(a)(1) of the United States Bankruptcy Code (the
"Bankruptcy Code"). Generally, Section 1145(a)(1) of the Bankruptcy Code
exempts the issuance of securities from the registration requirements of the
Securities Act and equivalent state securities and "blue sky" laws if the
following conditions are satisfied: (i) the securities are issued by a debtor,
an affiliate participating in a joint plan of reorganization with the debtor, or
a successor of the debtor under a plan of reorganization, (ii) the recipients of
the securities hold a claim against, an interest in, or a claim for an
administrative expense against, the debtor, and (iii) the securities are issued
entirely in exchange for the recipient's claim against or interest in the
debtor, or are issued "principally" in such exchange and "partly" for cash or
property. The Company believes that the issuance of Notes contemplated by the
Plan of Reorganization will satisfy the aforementioned requirements.
AFFILIATIONS
3. AFFILIATES. Furnish a list or diagram of all "affiliates" of the
applicant and indicate the respective percentages of "voting securities" or
other bases of control.
Section 5 of this Application sets forth the names and addresses of
(i) those shareholders of the Company holding 10% or more of the Company's
voting securities as of February 14, 2000 and (ii) those shareholders expected
to hold 10% or more of the Company's voting securities as of the consummation of
the Plan of Reorganization.
The following is a list of direct and indirect subsidiaries of the
Company, indicating the percentage of voting securities owned by the Company in
each such subsidiary. Indirect subsidiaries are indented and listed under their
direct parent corporations and the share of ownership indicated thereof refers
to the share ownership of the direct parent corporation.
PERCENTAGE OF VOTING
SECURITIES HELD BY
AFFILIATES THE COMPANY
Planet Hollywood New York City, Inc. 100%
Planet Hollywood New York, Ltd. 90%
Planet Hollywood London, Inc. 100%
Planet Hollywood Trocadero, LC 97.8%
Planet Hollywood Paris, Inc. 100%
Planet Hollywood France, LC 99%
Planet Hollywood Tel Aviv, Inc. 100%
Planet Hollywood Israel LC 75%
Planet Hollywood LP, Inc. 100%
Planet Hollywood Region V, Inc. 100%
Planet Hollywood Texas, Ltd. 99%
RM 46 Restaurant Vermogensverwaltungs GmbH 100%
Movie Restaurant Verwaltungs GmbH 100%
Movie Restaurant GmbH & Co. KG 99%
308 Aviation, Inc. 100%
308-III Aviation, Inc. 100%
Planet Hollywood Aspen, Inc. 100%
Planet Hollywood Atlantic City, Inc. 100%
Planet Hollywood Chicago, Inc. 100%
Planet Hollywood Costa Mesa, Inc. 100%
Planet Hollywood Gaming, Inc. 100%
Planet Hollywood Honolulu, Inc. 100%
Planet Hollywood Mail Order, Inc. 100%
Planet Hollywood Orlando, Inc. 100%
Planet Hollywood Orlando Distribution, Inc. 100%
Planet Hollywood Phoenix, Inc. 100%
Planet Hollywood (Region I), Inc. 100%
Planet Hollywood Region II, Inc. 100%
Planet Hollywood Region III 100%
Planet Hollywood Region IV, Inc. 100%
Planet Hollywood Region VI, Inc. 100%
Planet Hollywood Region VII, Inc. 100%
Planet Hollywood Transportation, Inc. 100%
Planet Hollywood Warehouse, Inc. 100%
Planet Hollywood Amsterdam, BV 100%
Planet Hollywood Canada, Inc. 100%
Planet Hollywood Czech, a.s. 100%
Planet Hollywood Europe, Ltd. 100%
Planet Hollywood (Puerto Rico), Inc. 100%
Planet Hollywood Restaurantbetriebsgesellschaft GmbH 100%
Planet Hollywood Restaurant OY 100%
Rivermist Limited 100%
Planet Hollywood Asia Pte Ltd. Singapore 50%
Planet Hollywood Australia Pty Ltd. 100%
Planet Hollywood (Sydney) Pty Ltd. 100%
Planet Hollywood (Gold Coast) Pty Ltd. 100%
Planet Hollywood (Melbourne) Pty Ltd. 100%
Planet Hollywood (NZ) Holdings Limited 100%
Planet Hollywood (Auckland) Limited 100%
Planet Hollywood Singapore Pte Ltd. 100%
Planet Hollywood (Hong Kong) Ltd. 64%
Tetra Asia Limited 20%
PT Planet Dwimas 20%
Planet Hollywood (Taiwan) 50%
All Star Cafe International, Inc. 100%
All Star Cafe (Region VII), Inc. 100%
All Star Cafe (New York), Inc. 100%
Official All Star Cafe (U.K.), Ltd. 50%
Official All Star Cafe, Inc. 100%
Coast Licensing, Inc. 100%
All Star Cafe LP, Inc. 100%
All Star Cafe (Region V), Inc. 100%
ECE, S.A. de C.V. 20%
Controladora PH, S.A. de C.V. 100%
Controladora PH Sudamerica, S.A. de C.V. 100%
First World Entertainment, S.A. 100%
Planet Hollywood Entretenimento LTDA 100%
Planet Hollywood Entretenciones, LTDA 100%
OASC, S.A. de C.V. 100%
Planet Hollywood (Chefs), Inc. 100%
Ten Alps, Inc. 100%
Cool Planet, Inc. 95%
Cool Planet I, Inc. 100%
Cool Planet II, Inc. 100%
Planet Hospitality Holdings, Inc. 100%
401 Hotel, LP 19.8%
401 General Partner LLC 20%
401 Commercial, LP 19.8%
Times Square Partners LLC 20%
Sound Republic, Inc. 100%
Sound Republic I Inc. 100%
Karmalanne, Inc. 100%
Rocky Pit, Inc. 100%
Planet Hollywood (Swiss Centre London), Ltd. 100%
Meant 2 Be, Inc. 100%
Silver Bracelets, Inc. 100%
Planet Hollywood Switzerland Ltd. 50%
Planet Hollywood (Japan) K.K. 50%
PHON, L.L.C. 54.765%
Planet Hollywood Theatres, Inc. 100%
PMC Management, Inc. 50%
Planet Movies Company, L.P. 49.5%
PMBA Unit (AMC), L.P. 99%
PMBA Unit (Planet Hollywood), L.P. 99%
EBCO Management, Inc. 100%
M Restaurant Venture 50%
U/MRV Co. 30%
Except as set forth in Section 5 of this Application, the relationship
among the Company and all of its affiliates, including their respective
percentages of voting securities, will be unchanged upon the effectiveness of
the Plan of Reorganization (the "Effective Date").
MANAGEMENT AND CONTROL
4. DIRECTORS AND EXECUTIVE OFFICERS. List the names and complete
mailing addresses of all directors and executive officers of the applicant and
all persons chosen to become directors or executive officers. Indicate all
offices which the applicant held or to be held by each person named.
The names of current Directors and executive officers of the Company
and their respective mailing addresses are set forth below:
NAME POSITION/PRINCIPAL OCCUPATION
- ---- ------------------------------
Robert Earl Chairman of the Board, President
c/o Planet Hollywood International, Inc. and Chief Executive Officer;
8669 Commodity Circle Director
Orlando, FL 32819
Michael Tarnopol Director
c/o Bear, Stearns & Co., Inc.
245 Park Avenue
New York, NY 10167
Thomas Avallone Executive Vice President and
c/o Planet Hollywood International, Inc. Chief Financial Officer;
8669 Commodity Circle Director
Orlando, FL 32819
Mark McCormack Director
c/o International Management Group
IMG Center
1360 East 9th Street, Suite 100
Cleveland, OH 44114
Claudio Gonzalez Director
c/o Kimberly Clark de Mexico,
Jose Luis Lagrange, No. 103
3rd Floor
Colonia, Los Morales
11510 Mexico, D.F.
Ong Beng Seng Director
Leisure Ventures Pte., Ltd.
Kuo Investments Company
767 Third Avenue
33rd Floor
New York, NY 10017
As of the Effective Date, the following persons will serve as
Directors and executive officers of the Company:
NAME POSITION/PRINCIPAL OCCUPATION
- ---- ------------------------------
Robert Earl Chairman of the Board,
c/o Planet Hollywood International, Inc. President and Chief Executive
8669 Commodity Circle Officer; Director.
Orlando, FL 32819
Thomas Avallone Director
c/o Planet Hollywood International, Inc.
8669 Commodity Circle
Orlando, FL 32819
Claudio Gonzalez Director
c/o Kimberly Clark de Mexico,
Jose Luis Lagrange, No. 103
3rd Floor
Colonia, Los Morales
11510 Mexico, D.F.
Steven Grapstein Director
c/o Planet Hollywood International, Inc.
8669 Commodity Circle
Orlando, FL 32819
Mustafa Al Hejailan Director
c/o Planet Hollywood International, Inc.
8669 Commodity Circle
Orlando, FL 32819
It is contemplated that as of the Effective Date there will be two
additional Directors who, under the terms of the Plan of Reorganization, are to
be designated by the holders of the Notes.
5. Principal owners of voting securities. Furnish the following
information as to each person owning 10 percent or more of the voting securities
of the applicant.
A. As of February 14, 2000 with regard to the old Common Stock of the
Company (which will be canceled as of the Effective Date):
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF
COMPLETE MAILING TITLE OF VOTING SECURITIES
ADDRESS CLASS OWNED AMOUNT OWNED OWNED
- ---------------- ------------ ------------ ------------------
<S> <C> <C> <C>
Ropat Limited Class A Common Stock 11,502,367 11.4%
c/o Janice George
1325 Airmotive Way #130
Reno, Nevada 89502
Ong Beng Seng/Leisure Ventures Pte, Ltd. Class A Common Stock 12,050,335 12.0%
Leisure Ventures Pte., Ltd.
Kuo Investments Company
767 Third Avenue
33rd Floor
New York, NY 10017
</TABLE>
B. As of the Effective Date with regard to the new Common Stock of the
Company:
<TABLE>
<CAPTION>
NAME AND PERCENTAGE OF
COMPLETE MAILING TITLE OF VOTING SECURITIES
ADDRESS CLASS OWNED AMOUNT OWNED OWNED
- ---------------- ------------ ------------ ------------------
<S> <C> <C> <C>
Leisure Ventures Pte Ltd. Class B Common Stock 1,166,671 11.67%
50 Cuscaden Road
#08-01 HPL House
Singapore 249724
Kingdom Planet Hollywood Class B Common Stock 2,333,341 23.33%
c/o Kingdom Holding Company
Post Office Box 8653
Riyadh 11492
Kingdom of Saudi Arabia
Holst Trust Class B Common Stock 2,333,341 23.33%
c/o Lauren Investments Holdings
Limited, as trustee
International Trust Building
Wickhams Cay
Road Town Tortola
British Virgin Islands
Bay Harbour Management L.C. Class A Common Stock 1,310,000 13.1%
885 Third Ave.
34th Floor
NY, NY 1022
</TABLE>
UNDERWRITERS
6. UNDERWRITERS. Give the name and complete mailing address of (a)
each person who, within three years prior to the date of filing the application,
acted as an underwriter of any securities of the obligor which were outstanding
on the date of filing the application, and (b) each proposed principal
underwriter of the securities proposed to be offered. As to each person
specified in (a), give the title of each class of securities underwritten.
(a) In connection with the issuance and sale of the Company's 12%
Senior Subordinated Notes due 2005, the following entities acted as
underwriters:
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, NY 10167
Salomon Brothers Inc.
7 World Trade Center
New York, NY 10048
NationsBanc Montgomery Securities LLC
600 Montgomery Street
San Francisco, CA 94111
SG Cowen Securities Corporation
1221 Avenue of the Americas
New York, NY 10020
SunTrust Equitable Securities Corporation
200 South Orange Avenue
Orlando, FL 32801
Scotia Capital USA, Inc.
165 Broadway
One Liberty Plaza
New York, NY 10006
(b) None.
CAPITAL SECURITIES
7. CAPITALIZATION. (a) Furnish the following information as to each
authorized class of securities of the applicant.
As of February 14, 2000:
<TABLE>
<CAPTION>
APPROXIMATE
TITLE OF CLASS AMOUNT AUTHORIZED AMOUNT OUTSTANDING
- -------------------------------------- --------------------- ------------------
<S> <C> <C>
Class A Common Stock, par value $.01 250,000,000 shares 100,670,929 shares
per share
Class B Common Stock, par value $.01 25,000,000 shares 8,314,848 shares
per share
Preferred Stock, $.01 par value 25,000,000 shares none
12% Senior Subordinated Notes due 2005 $250,000,000 $250,000,000*
principal amount principal amount
*does not include unpaid accrued interest in the amount of $32,000,000.
</TABLE>
<TABLE>
<CAPTION>
As of the Effective Date:
APPROXIMATE
TITLE OF CLASS AMOUNT AUTHORIZED AMOUNT OUTSTANDING
- ------------------------------------ ----------------- -------------------
<S> <C> <C>
Class A Common Stock, par value $.01 100,000,000 shares 2,950,000 shares
per share
Class B Common Stock, par value $.01 25,000,000 shares 7,000,000 shares
per share
Preferred Stock, $.01 par value. 100,000,000 shares none
Senior Secured Notes due 2002 $ 25,000,000 $ 25,000,000
principal amount principal amount
10% Secured Deferrable Interest Notes $ 95,000,000 $ 60,000,000
due 2005 principal amount principal amount
</TABLE>
(b) Give a brief outline of the voting rights of each class of
voting securities referred to in paragraph (a) above.
Set forth below is an analysis of certain provisions of the Company's
Amended and Restated Certificate of Incorporation to be filed with the Office of
the Secretary of State of the State of Delaware in connection with the
consummation of the Plan of Reorganization. The following analysis makes use of
certain capitalized terms defined in the Amended and Restated Certificate of
Incorporation; such terms shall have the meanings given to them therein and
shall be incorporated by reference herein. The following analysis does not
purport to be a complete description of the Amended and Restated Certificate of
Incorporation and is qualified in its entirety by reference thereto.
Upon the filing of the Amended and Restated Certificate of
Incorporation, the shares of Class A Common Stock, par value $.01 per share, and
the shares of Class B Common Stock, par value $.01 per share, of the Company
issued and outstanding immediately prior to the time when this Amended and
Restated Certificate of Incorporation becomes effective will be automatically
canceled and extinguished.
Upon such filing, the Company's authorized capital stock will consist
of the following: (i) One Hundred Million (100,000,000) shares of Class A Common
Stock, $.01 par value, (ii) Twenty Five Million (25,000,000) shares of Class B
Common Stock, $.01 par value, and (iii) One Hundred Million (100,000,000) shares
of Preferred Stock, $.01 par value.
Except as described below or as otherwise required by applicable law,
holders of Class A Common Stock and Class B Common Stock will vote together as a
single class on all matters submitted to the stockholders for a vote. With
respect to all matters upon which stockholders are entitled to vote, the holders
of outstanding shares of Common Stock will be entitled to one vote in person or
by proxy for each share of Common Stock standing in the name of such
stockholders on the record of stockholders.
Except as described in the immediately following paragraph, the
holders of Class B Common Stock shall be entitled, voting separately as a single
class by a plurality of the votes cast, to the exclusion of all other classes of
the Corporation's capital stock, to elect all members of the Corporation's Board
of Directors (the "Class B Directors"); PROVIDED, HOWEVER, that prior to the
payment in full of all of the Corporation's obligations under the Notes, two of
the Class B Directors shall be individuals designated by the Trustee in
accordance with the Indenture (the "Noteholder Designees") pursuant to that
certain Voting Agreement by and among the New Money Investors and the Company.
Any one or more of the Class B Directors may be removed with or without cause
only by a vote of the holders of Class B Common Stock, voting separately as a
single class and holding not less than a majority of the issued and outstanding
shares of Class B Common Stock; PROVIDED, HOWEVER, that as long as the Notes
remain outstanding the Noteholder Designees may not be so removed without the
prior written consent of the Trustee, acting as directed by the holders of the
Notes.
After the payment in full of all of the Corporation's obligations
under the Notes and upon the vacancies of the directorships held by the
Noteholder Designees, the holders of Class A Common Stock shall be entitled,
voting separately as a single class by a plurality of the votes cast, to the
exclusion of all other classes of the Corporation's capital stock, to elect two
(2) directors to serve on the Corporation's Board of Directors (the "Class A
Directors"). Any one or more of the Class A Directors may be removed with or
without cause only by a vote of the holders of Class A Common Stock, voting
separately as a single class and holding not less than a majority of the issued
and outstanding shares of Class A Common Stock.
At such time when there shall be no shares of Class B Common Stock
issued and outstanding, the holders of Class A Common Stock shall be entitled to
elect all members of the Corporation's Board of Directors. Directors so elected
by the holders of Class A Common Stock may be removed only with cause by a vote
of the holders of not less than a majority of the issued and outstanding shares
of Class A Common Stock.
In addition to any other vote that may be required by the Delaware
General Corporation Law or the Amended and Restated Certificate of
Incorporation, the vote or consent of the holders of any class of Common Stock
voting separately as a single class shall be required to amend or restate the
Amended and Restated Certificate of Incorporation in a manner that would alter
or change the powers, preferences or special rights of such class of Common
Stock, so as to affect them adversely.
The Company's Board of Directors is authorized to cause to be issued
from time to time one or more series of Preferred Stock. The Board of Director
may determine whether a series of Preferred Stock has voting rights in addition
to the voting rights provided by law and the terms and conditions of such voting
rights. At the time of the consummation of the Plan of Reorganization, there
will be no shares of Preferred Stock issued and outstanding.
Holders of the Senior Secured Notes due 2002 and the Notes will not
have any voting rights by reason of ownership of those securities, except that
holders of the Notes will have the right to designate the Noteholders Designees.
INDENTURE SECURITIES
8. ANALYSIS OF INDENTURE PROVISIONS. Insert at this point the analysis
of indenture provisions required under section 305(a)(2) of the Act.
The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended. The following analysis of certain provisions of the Indenture makes use
of certain capitalized terms defined in the Indenture and not herein, and such
terms shall have the meanings given to them in the Indenture and shall be
incorporated by reference herein. The following analysis does not purport to be
a complete description of the Indenture provisions discussed and is qualified in
its entirety by reference to the Indenture, which provisions are incorporated
herein by reference as part of such analysis. (Section references are to the
relevant provisions of the Indenture.)
A. DEFAULT PROVISIONS.
An "Event of Default" occurs under the Indenture if:
(1) the Company defaults in any payment of interest on any Note
when the same becomes due and payable, and such default continues for
a period of 30 days;
(2) the Company (i) defaults in the payment of the principal of
any Note when the same becomes due and payable at its Stated Maturity,
upon optional redemption, upon required repurchase, upon declaration
or otherwise, or (ii) fails to redeem or purchase Notes when required
pursuant to the Indenture or the Notes;
(3) the Company fails to comply with Section 5.1 of the Indenture
(When the Company May Merge or Transfer Assets);
(4) the Company fails to comply with Section 4.2 (SEC Reports),
4.3 (Limitation on Consolidated Debt), 4.4 (Future Guarantors), 4.5
(Limitations on Restricted Payments), 4.6 (Dividends and other Payment
Restrictions Affecting Subsidiaries), 4.7 (Asset Dispositions), 4.8
(Transaction with Affiliates), 4.9 (Limitation on Issuances and Sale
of Capital Stock of Restricted Subsidiaries), 4.10 (Change of
Control), 4.11 (Limitation on Liens), 4.12 (Business Activities), 4.13
(Maintenance of Insurance), 4.15 (Nomination of Class A Directors) or
4.17 (Calculation of Original Issue Discount) of the Indenture (other
than a failure to purchase Notes when required under Section 4.7 or
4.10 of the Indenture) and such failure continues for 30 days after
the notice specified below;
(5) the Company fails to comply with any of its agreements in the
Notes or the Indenture (other than those referred to in clause (1),
(2), (3) or (4) above) and such failure continues for 60 days after
the notice specified below;
(6) Debt of the Company or any Significant Subsidiary is not paid
within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Debt unpaid or accelerated exceeds $1 million;
(7) any Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it
in an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or
any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of
$1 million, or its foreign currency equivalent at the time is
entered against the Company or any Significant Subsidiary, remains
outstanding for a period of 60 days following the entry of such
judgment or decree and is not discharged, waived or the execution
thereof stayed within 10 days after the notice specified below; or
(10) a Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guarantee)
or a Subsidiary Guarantor denies or disaffirms its obligations under
its Subsidiary Guarantee.
The foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
The term "Bankruptcy Law" means Title 11 of the United States Code, or
any similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clauses (4), (5), or (9) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
outstanding Notes notify the Company of the Default and the Company does not
cure such Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
propose to take with respect thereto.
If an Event of Default (other than an Event of Default specified in
clause 7 or 8 above with respect to the Company) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the Notes by notice to the Company and the Trustee, may declare the
principal of and accrued but unpaid interest on all the Notes to be due and
payable. Upon such a declaration, such principal, interest shall be due and
payable immediately. If an Event of Default specified in clauses 7 or 8 above
with respect to the Company occurs, the principal of and interest on all the
Notes shall IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. The Holders
of a majority in principal amount of the Notes by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
B. AUTHENTICATION AND DELIVERY OF NOTES; APPLICATION OF PROCEEDS.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under the
Indenture.
The Trustee shall authenticate and deliver Notes for original issue
upon a written order of the Company signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary of the Company. Such
order shall specify the amount of the Notes to be authenticated and the date on
which the original issue of Notes is to be authenticated. The aggregate
principal amount of Notes outstanding at any time may not exceed that amount
except as provided in Section 2.7 of the Indenture (Replacement Notes).
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in the Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar, Paying Agent or agent for service of notices and
demands.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
The Notes outstanding at any time are all Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in Section 2.8 (Outstanding Notes) as not outstanding. A
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
There will be no proceeds from the issuance of the Notes.
C. RELEASE OF COLLATERAL.
The Notes and the Indenture will be subject to the terms and
conditions of that certain Intercreditor Agreement (attached to this Application
as Exhibit T3C-4) to be entered into by and among The CIT Group/Business Credit,
Inc., as agent pursuant to the Senior Credit Agreement (as defined in the
Intercreditor Agreement), Bay Harbour Management L.C., as lender under the
Senior Subordinated Credit Agreement (as defined in the Intercreditor
Agreement), United States Trust Company of New York as the trustee under the
Indenture (together with its successors and assigns in such capacity) and
certain holders of the Notes (together with their successors and assigns),
including the Subordination Provisions annexed thereto.
Subject to the two succeeding paragraphs below, (i) in the event that
any Collateral is sold, transferred or otherwise disposed of in an Asset
Disposition or any other transaction permitted by the Indenture, such Collateral
shall, concurrently with the disposition of such Collateral be released from the
Lien of the relevant Security Documents (attached to this Application as
Exhibits T3C-3, T3C-5, T3C-6 and T3C-7) in accordance with the terms of the
Security Documents and (ii) the Company and its Subsidiaries may from time to
time substitute property or securities released from the Lien of the Security
Documents in connection with the sale, transfer or other disposition thereof for
other property or securities to be subjected to the Lien of the Security
Documents, in each case in accordance with the provisions of the Security
Documents.
At any time when an Event of Default shall have occurred and be
continuing and the maturity of the Notes shall have been accelerated (whether by
declaration or otherwise) and such acceleration shall not have been rescinded or
annulled, no release of Collateral pursuant to the provisions of the Indenture
or of the Security Documents shall be effective as against the Holders of the
securities without the consent of the Collateral Agent. The Trustee shall
promptly notify the Collateral Agent of any rescission or annulment, pursuant to
Section 6.4 of the Indenture, of an acceleration of the Notes.
The release of any Collateral from the terms of the Security Documents
will not be deemed to impair the security under the Indenture in contravention
of the provisions thereof if and to the extent the Collateral is released
pursuant to the Security Documents. At all times after qualification of the
Indenture under the TIA, to the extent applicable, the Company shall cause TIA
Section 314(d) relating to the release of property or securities from the Lien
of the Security Documents and relating to the substitution therefor of any
property or securities to be subjected to the Lien of the Security Documents to
be complied with. Any certificate or opinion required by TIA Section 314(d) may
be made by Officers of the Company, except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person shall be an independent engineer, appraiser or other expert
selected or approved by the Trustee in the exercise of reasonable care.
D. SATISFACTION AND DISCHARGE OF THE INDENTURE.
(a) When (i) the Company delivers to the Trustee all outstanding Notes
(other than Notes replaced pursuant to Section 2.7 of the Indenture) for
cancellation or (ii) all outstanding Notes have become due and payable, whether
at maturity or as a result of the mailing of a notice of redemption pursuant to
Article 3 of the Indenture and the Company irrevocably deposits with the Trustee
funds sufficient to pay at maturity or upon redemption all outstanding Notes,
including interest thereon to maturity or such redemption date (other than Notes
replaced pursuant to Section 2.7 of the Indenture), and if in either case the
Company pays all other sums payable hereunder by the Company, then the Indenture
shall, subject to Section 8.1(c) thereof, cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of the Indenture on demand
of the Company accompanied by an Officers, Certificate and an opinion of Counsel
and at the cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2 of the Indenture, the Company
at any time may terminate (i) all its obligations under the Notes and the
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15 and 4.17
and the operation of Sections 6.1(4), 6.1(6), 6.1(7), 6.1(8), 6.1(9) and 6.1(10)
under the Indenture (but, in the case of Sections 6.1(7) and (8) thereof, with
respect only to Significant Subsidiaries) and the limitations contained in
Sections 5.1(a)(iii) and (iv) thereof ("covenant defeasance option"). The
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Notes may not be accelerated because of an Event of Default specified in
Sections 6.1(4), 6.1(6), 6.1(7), 6.1(8), 6.1(9) and 6.1(10) of the Indenture
(but, in the case of Sections 6.1(7) and (8) thereof, with respect only to
Significant Subsidiaries) or because of the failure of the Company to comply
with Section 5.1(a)(iii) or (iv) thereof. If the Company exercises its legal
defeasance option or its covenant defeasance option, each Subsidiary Guarantor,
if any, shall be released from all its obligations with respect to its
Subsidiary Guarantee.
Upon satisfaction of the conditions set forth herein the Trustee shall
acknowledge in writing the discharge of those obligations that the Company
terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 7.7 and 7.8 and in this
Article 8 shall survive until the Notes have been paid in full. Thereafter, the
Company's obligations in Sections 7.7, 8.4 and 8.5 shall survive.
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
1. the Company irrevocably deposits in trust with the Trustee
money or Defeasance Obligations for the payment of principal of and
interest on the Notes to maturity or redemption, as the case may be;
2. the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited Defeasance Obligations plus any
deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay principal and interest
when due on all the Notes to maturity or redemption, as the case may
be;
3. 123 days pass after the deposit is made and during the 123-day
period no Default specified in Sections 6.1(7) or (8) with respect to
the Company occurs which is continuing at the end of the period;
4. the deposit does not constitute a default under any other
agreement binding on the Company;
5. the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
6. in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the Issue Date there
has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Holders will not recognize income, gain or
loss for Federal income tax purposes as a result of such defeasance
and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
defeasance had not occurred;
7. in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance
and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
8. the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
to the defeasance and discharge of the Notes as contemplated by this
Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article 3 of the Indenture.
The Trustee shall hold in trust money or Defeasance Obligations
deposited with it pursuant to Article 8 of the Indenture. It shall apply the
deposited money and the money from Defeasance Obligations through the Paying
Agent and in accordance with the Indenture to the payment of principal of and
interest on the Notes.
The Trustee and the Paying Agent shall promptly turn over to the
Company upon written request any excess money or securities held by them at any
time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors.
If the Trustee or Paying Agent is unable to apply any money or
Defeasance Obligations in accordance with Article 8 of the Indenture by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under the Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Article
8 of the Indenture until such time as the Trustee or Paying Agent is permitted
to apply all such money or Defeasance Obligations in accordance with Article 8
of the Indenture; PROVIDED, HOWEVER, that, if the Company has made any payment
of interest on or principal of any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Defeasance Obligations held
by the Trustee or Paying Agent.
E. EVIDENCE OF COMPLIANCE WITH CONDITIONS AND COVENANTS.
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate, one of the signers
of which shall be the principal executive, principal financial or principal
accounting officer of the Company, stating that in the course of the performance
by the signers of their duties as officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or propose to take
with respect thereto. The Company also shall comply with TIA ss.314(a)(4).
9. Other Obligors. Give the name and complete mailing address of any
person, other than the applicant, who is an obligor upon the indenture
securities.
All Star Cafe (New York), Inc.
All Star Cafe International, Inc.
Coast Licensing, Inc.
Cool Planet I, Inc.
Cool Planet II, Inc.
Cool Planet, Inc.
EBCO Management, Inc.
Meant 2 Be, Inc.
Official All Star Cafe, Inc.
Planet Hollywood (Atlantic City), Inc.
Planet Hollywood (Chefs), Inc.
Planet Hollywood (Honolulu), Inc.
Planet Hollywood (New York City), Inc.
Planet Hollywood (New York), Ltd.
Planet Hollywood (Orlando), Inc.
Planet Hollywood (Region I), Inc.
Planet Hollywood (Region II), Inc.
Planet Hollywood (Region III), Inc.
Planet Hollywood (Region IV), Inc.
Planet Hollywood (Region V), Inc.
Planet Hollywood (Region VI), Inc.
Planet Hollywood (Region VII), Inc.
Planet Hollywood (Texas), Ltd.
Planet Hollywood (Warehouse), Inc.
Planet Hollywood France, LC
Planet Hollywood London, Inc.
Planet Hollywood LP, Inc.
Planet Hollywood Paris, Inc.
Planet Hollywood Tel Aviv, Inc.
Planet Hollywood Theaters, Inc.
Planet Hollywood Trocadero, LC
Planet Hospitality Holdings, Inc.
Silver Bracelets, Inc.
Sound Republic I, Inc.
Sound Republic, Inc.
Ten Alps, Inc.
The complete mailing address of each obligor is c/o Planet Hollywood
International, Inc., 8669 Commodity Circle, Orlando, FL 32819.
Contents of application for qualification. This application for
qualification comprises:
(a) Pages numbered 1 to 19, consecutively.
(b) The statement of eligibility and qualification of the trustee
under the indenture to be qualified, which statement shall be filed by
amendment.
(c) The following exhibits in addition to those filed as a part
of the statement of eligibility and qualification of the trustee:
Exhibit T3A-1 Certificate of Incorporation of the Company. The
Certificate of Incorporation will be amended and restated
in connection with the Plan of Reorganization.
Exhibit T3A-2 The form of Amended and Restated Certificate of
Incorporation of the Company.
Exhibit T3B-1 By-Laws of the Company. The By-Laws will be amended and
restated in connection with the Plan of Reorganization.
Exhibit T3B-2 The form of Amended and Restated By-Laws of the Company.
Exhibit T3C-1 Form of the 10% Secured Deferrable Interest Notes
Indenture dated as of February __, 2000, among the
Company, as Issuer, the Subsidiary Guarantors named
therein and United States Trust Company, as trustee.
Exhibit T3C-2 Form of Note (Exhibit A to the Indenture).
Exhibit T3C-3 Form of Guarantor Security Agreement (Exhibit B to the
Indenture). To be filed by amendment.
Exhibit T3C-4 Form of Intercreditor Agreement (Exhibit C to the
Indenture).
Exhibit T3C-5 Form of Mortgage (Exhibit D to the Indenture). To be filed
by amendment.
Exhibit T3C-6 Form of Pledge Agreement (Exhibit E to the Indenture). To
be filed by amendment.
Exhibit T3C-7 Form of TSP Pledge Agreement (Exhibit G to the Indenture).
To be filed by amendment.
Exhibit T3D Order confirming the First Amended Joint Plan of
Reorganization, dated January 21, 2000.
Exhibit T3E-1 A copy of the First Amended Disclosure Statement regarding
the First Amended Joint Plan of Reorganization, with
certain exhibits thereto sent or given to security holders
in connection with the issuance or distribution of the
Notes.
Exhibit T3E-2 Dolin Recano & Company, Inc. letter to Brokers, Dealers,
Commercial Banks, Trust Companies and other Nominees.
Exhibit T3E-3 Master Ballot for Accepting or Rejecting the First
Amended Joint Plan of Reorganization. For use by
Record Holder Nominees of Owners of Class 5 (Old Senior
Subordinated Notes) Claims.
Exhibit T3E-4 Letter to Clients.
Exhibit T3E-5 Ballot for Accepting or Rejecting the First Amended Joint
Plan of Reorganization. Ballot for Class 5 Claim (Old
Senior Subordinated Notes Claims) Beneficial Owners.
Exhibit T3E-6 Ballot for Accepting or Rejecting the First Amended
Joint Plan of Reorganization. Ballot for Class 6 Claims
(General Unsecured Claims).
Exhibit T3E-7 Notice of Order (A) approving the Debtors' Disclosure
Statement, Forms of Ballots and related solication
material, (B) establishing procedures for solication of
votes on the Debtors' First Amended Joint Plan of
Reorganization, (C) establishing Record Date, Voting
Deadline and procedures for tabulation of votes on
Debtors' Plan, (D) establishing Administrative Claims
Date and (E) fixing date and time for the filing of
objections to, and scheduling hearing on, confirmation of
the Debtors' Plan.
Exhibit T3F A cross reference sheet showing the location in the
Indenture of the provisions inserted therein pursuant to
Sections 310 through 318(a), inclusive, of the Trust
Indenture Act of 1939, included in Exhibit T3C-1.
Exhibit 99 Statement of Eligibility on Form T-1.
[END OF TEXT]
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
applicant, Planet Hollywood International, Inc., a corporation organized and
existing under the laws of Delaware, has duly caused this application to be
signed on its behalf by the undersigned, thereunto duly authorized, and its seal
to be hereunto affixed and attested, all in the City of Orlando, and State of
Florida, on the 18th day of February, 2000.
PLANET HOLLYWOOD INTERNATIONAL, INC.
[Seal] By /s/ Thomas Avallone
--------------------------------
Thomas Avallone
Executive Vice President
and Chief Financial Officer
Attest /s/ Mark S. Helm
--------------------------------
Mark S. Helm
Vice President and
General Counsel
Exhibit T3A-1
RESTATED CERTIFICATE OF INCORPORATION
OF
PLANET HOLLYWOOD INTERNATIONAL, INC.
Planet Hollywood International, INC. filed its original Certificate of
Incorporation with the Delaware Secretary of State on December 16, 1994 (the
"Original Certificate"). This Restated Certificate of Incorporation and the
amendments to the Original Certificate as contained herein have been duly
adopted in accordance with Sections 228, 242, and 245 of the General Corporation
Law of Delaware.
ARTICLE I
Name
The name of this corporation is PLANET HOLLYWOOD INTERNATIONAL, INC.
(the "Corporation").
ARTICLE II
Registered Office and Agent
The street address of the registered office of the Corporation in the
State of Delaware is 1013 Centre Road, in the City of Wilmington, County of New
Castle, Delaware 19805.
The name of the registered agent of the Corporation at that address is
Corporation Service Company.
ARTICLE III
Mailing Address
The mailing address of the Corporation is 1380 Sand Lake Road, Suite
600, Orlando, Florida 32819.
ARTICLE IV
Duration
This Corporation shall exist perpetually.
ARTICLE V
Purpose
The purpose or purposes of the Corporation are:
(1) To conduct any lawful business, to exercise any lawful purpose and
power, and to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware; and
(2) In general, to possess and exercise all the powers and privileges
granted by the General Corporation Law of Delaware or any other law of Delaware
or by this Certificate of Incorporation together with any power incidental
thereto, so far as such powers and privileges are necessary or convenient to the
conduct, promotion or attainment of the business or purposes of the Corporation.
ARTICLE VI
Capital Stock
The maximum number of shares of capital stock which this Corporation
shall have authority to issue is Three Hundred Million (300,000,000), consisting
of Two Hundred Fifty Million (250,000,000) shares of Class A Common Stock, $.01
par value, Twenty Five Million (25,000,000) shares of Class B Common Stock, $.01
par value, and Twenty Five Million (25,000,000) shares of Preferred Stock, $.01
par value. The Class B Common Stock being established by this Restated
Certificate of Incorporation is a new class of Class B Common Stock. Each share
of Class B Common Stock established by the Original Certificate shall convert,
effective as of the date hereof, pursuant to the terms of Section 4(a) below.
All references herein to the "Class B Common Stock" shall refer to the new class
being established hereby, unless expressly indicated otherwise. The Class A
Common Stock and the Class B Common Stock are hereinafter referred to
collectively as the "Common Stock". The preferences, qualifications,
limitations, restrictions and the special or relative rights in respect of the
shares of each class are as follows:
SECTION 1. Preferred Stock. The Preferred Stock may be issued from
time to time in one or more series. All shares of Preferred Stock shall be of
equal rank and shall be identical, except in respect of the matters that may be
fixed and determined by the Board of Directors as hereinafter provided, and each
share of each series shall be identical with all other shares of such series,
except as to the date from which dividends are cumulative. The Board of
Directors hereby is authorized to cause such shares to be issued in one or more
classes or series and with respect to each such class or series to fix and
determine the designation, powers, preferences and rights of the shares of each
such series and the qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series
shall include, but not be limited to, determination of the following:
(1) the number of shares constituting a series, the distinctive
designation of a series and the stated value of a series, if different from the
par value;
(2) whether the shares of a series are entitled to any fixed or
determinable dividends, the dividend rate (if any) on such shares, whether the
dividends are cumulative and the relative rights of priority of dividends on
shares of that series;
(3) whether a series has voting rights in addition to the voting
rights provided by law and the terms and conditions of such voting rights;
(4) whether a series will have or receive conversion or exchange
privileges and the terms and conditions of such conversion or exchange
privileges;
(5) whether the shares of a series are redeemable and the terms and
conditions of such redemption, including the manner of selecting shares for
redemption if less than all shares are to be redeemed, the date or dates on or
after which the shares in the series will be redeemable and the amount payable
in case of redemption;
(6) whether a series will have a sinking fund for the redemption or
purchase of the shares in the series and the terms and the amount of such
sinking fund;
(7) the right of a series to the benefit of conditions and
restrictions on the creation of indebtedness of the Corporation or any
subsidiary, on the issuance of any additional capital stock (including
additional shares of such series or any other series) on the payment of
dividends or the making of other distributions on any outstanding stock of the
Corporation and the purchase, redemption or other acquisition by the
Corporation, or any subsidiary, of any outstanding stock of the Corporation;
(8) the rights of a series in the event of voluntary or involuntary
liquidation, dissolution or winding up of the Corporation and the relative
rights of priority of payment of a series; and
(9) any other relative, participating, optional or other special
rights, qualifications, limitations or restrictions of such series.
Dividends on outstanding shares of Preferred Stock shall be paid or
set apart for payment before any dividends shall be paid or declared or set
apart for payment on the Common Stock with respect to the same dividend period.
If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation the assets available for distribution to holders
of shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series in accordance
with the respective preferential amounts (including unpaid cumulative dividends,
if any, payable with respect thereto).
SECTION 2. Common Stock - General Provisions. The Common Stock shall
be subject to the express terms of the Preferred Stock and any series thereof.
Each share of Common Stock shall be equal to every other share of Common Stock,
except as otherwise provided herein or required by law.
Shares of Common Stock authorized hereby shall not be subject to
preemptive rights. The holders of shares of Common Stock now or hereafter
outstanding shall have no preemptive right to purchase or have offered to them
for purchase any of such authorized but unissued shares, or any shares of
Preferred Stock, Common Stock or other equity securities issued or to be issued
by the Company.
Subject to the preferential and other dividend rights applicable to
Preferred Stock, the holders of shares of Common Stock shall be entitled to
receive such dividends (payable in cash, stock or otherwise) as may be declared
on the Common Stock by the Board of Directors at any time or from time to time
out of any funds legally available therefor.
In the event of any voluntary or involuntary liquidation, distribution
or winding up of the Corporation, after distribution in full of the preferential
or other amounts to be distributed to the holders of shares of Preferred Stock,
the holders of shares of Common Stock shall be entitled to receive all of the
remaining assets of the Corporation available for distribution to its
stockholders, ratably in proportion to the number of shares of Common Stock held
by them.
SECTION 3. Common Stock - Other Provisions.
(a) Voting Rights. The shares of Common Stock shall have the following
voting rights:
(1) Each share of Class A Common Stock shall entitle the holder
thereof to one vote upon all matters upon which stockholders have the right to
vote.
(2) Each share of Class B Common Stock shall carry no right to vote
for the election of directors of the Corporation and no right to vote on any
matter presented to the stockholders for their vote or approval except as
required by applicable law.
Except as otherwise required by applicable law, the holders of shares
of Class A Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation (or, if any holders of
shares of Preferred Stock are entitled to vote together with the holders of
Class A Common Stock, as a single class with such holders of shares of Preferred
Stock).
(b) Dividends and Distributions. Except as otherwise provided in this
Restated Certificate of Incorporation, holders of Common Stock shall be entitled
to such dividends and other distributions in cash, stock or property of the
Corporation as may be declared thereon by the Board of Directors from time to
time out of assets or funds of the Corporation legally available therefor;
provided, however, that in no event may the rate of any dividend payable on
outstanding shares of any class of Common Stock be greater than the dividend
rate payable on outstanding shares of the other class of Common Stock. All
dividends and distributions on the Class A Common Stock payable in stock of the
Corporation shall be made in shares of Class A Common Stock, and all dividends
and distributions on the Class B Common Stock payable in stock of the
Corporation shall be made at the same dividend rate per share in shares of Class
B Common Stock. In no event will shares of any class of Common Stock be split,
divided or combined unless the outstanding shares of the other class of Common
Stock shall be proportionately split, divided or combined.
(c) Options, Riqhts or Warrants. The Corporation may make offerings of
options, rights or warrants to subscribe for shares of either class of capital
stock to all holders of one class of Common Stock if an identical offering is
made simultaneously to all the holders of the other class. All such offerings of
options, rights or warrants shall offer the respective holders of Class A Common
Stock and Class B Common Stock the right to subscribe at the same rate per
share.
SECTION 4. Conversion of Class B Common Stock.
(a) Conversion of Existing Shares of Class B Common Stock to Shares of
Class A Common Stock. The Original Certificate established a class of non-voting
common stock identified as the Non-Voting Class B Common Stock, $.01 par value,
of which 49,000,000 shares were authorized (the "Old Class B Shares") Effective
with the filing of this Restated Certificate of Incorporation, each of such Old
Class B Shares shall convert, without any action by the holder thereof, into one
validly issued, fully paid and nonassessable share of Class A Common Stock, and
the Corporation shall promptly cancel the certificates evidencing such Old Class
B Shares and issue and deliver to the record holders thereof certificates
representing that number of shares of Class A Common Stock to which such record
holders are entitled by reason of this conversion, and the Corporation shall
cause such shares of Class A Common Stock to be registered in the name of such
record holders.
(b) Voluntary Conversion. Each share of Class B Common Stock shall be
convertible, at the option of its record holder, into one validly issued, fully
paid and nonassessable share of Class A Common Stock at any time.
(c) Voluntary Conversion Procedure. At the time of a voluntary
conversion, the record holder of shares of Class B Common Stock shall deliver to
the principal office of the Corporation or any transfer agent for shares of the
Class A Common Stock (i) the certificate or certificates representing the shares
of Class B Common Stock to be converted, duly endorsed in blank or accompanied
by proper instruments of transfer and (ii) written notice to the Corporation
stating that such record holder elects to convert such share or shares and
stating the name or names (with addresses) and denominations in which the
certificate or certificates representing the shares of Class A Common Stock
issuable upon such conversion are to be issued and including instructions for
the delivery thereof. Conversion shall be deemed to have been effected at the
time when delivery is made to the Corporation or its transfer agent of such
written notice and the certificate or certificates representing the shares of
Class B Common Stock to be converted, and as of such time each person named in
such written notice as the person to whom a certificate representing shares of
Class A Common Stock is to be issued shall be deemed to be the holder of record
of the number of shares of Class A Common Stock to be evidenced by that
certificate. Upon such delivery, the Corporation or its transfer agent shall
promptly issue and deliver at such stated address to such record holder of
shares of Class A Common Stock a certificate or certificates representing the
number of shares of Class A Common Stock to which such record holder is entitled
by reason of such conversion, and shall cause such shares of Class A Common
Stock to be registered in the name of such record holder.
(d) Reclassifications. In the event of a reclassification or other
similar transaction as a result of which the shares of class A Common Stock are
converted into another security, then a holder of Class B Common Stock shall be
entitled to receive upon conversion the amount of such security that such holder
would have received if such conversion had occurred immediately prior to the
record date of such reclassification or other similar transaction.
(e) Unconverted Shares; Notice Required. In the event of the
conversion of less than all the shares of Class B Common Stock evidenced by a
certificate surrendered to the Corporation in accordance with the procedures of
Section 4 (b) of this Article VI, the Corporation shall execute and deliver to
or upon the written order of the holder of such unconverted shares, without
charge to such holder, a new certificate evidencing the number of shares of
Class B Common Stock not converted.
(f) Retired Shares. Shares of Class B Common Stock that are converted
into shares of Class A Common Stock as provided herein shall be retired and
canceled and shall have the status of authorized but unissued shares of Class B
Common Stock.
(g) Reservation. The Corporation shall at all times reserve and keep
available, out of its authorized and unissued shares of Class A Common Stock,
for the purposes of effecting conversions, such number of duly authorized shares
of Class A Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Class B Common Stock; provided, however,
that nothing contained herein shall be construed to preclude the Corporation
from satisfying its obligations in respect of the conversion of the outstanding
shares of Class B Common Stock by delivery of purchased shares of Class A Common
Stock which are held in treasury of the Corporation. All the shares of Class A
Common Stock so issuable shall, when so issued, be duly and validly issued,
fully paid and nonassessable, and free from liens and charges with respect to
the issue. The Corporation shall take all actions as may be necessary to ensure
that all such shares of Class A Common Stock may be so issued without violation
of any applicable law or regulation, or of any requirements of any national
securities exchange upon which the shares of Class A Common Stock are or may be
listed, or of any inter-dealer quotation system of a registered national
securities association upon which the shares of Class A Common Stock are or may
be listed.
(h) Taxes. The issuance of a certificate for shares of Class A Common
Stock upon conversion of shares of Class B Common Stock shall be made without
charge for any stamp or other similar tax in respect of such issuance. However,
if any such certificate is to be issued in a name other than that of the holder
of the shares of Class B Common Stock converted, the person or persons
requesting the issuance thereof shall pay to the Corporation the amount of any
tax which may be payable in respect of any transfer involved in such issuance or
shall establish to the satisfaction of the Corporation that such tax has been
paid or is not required to be paid.
ARTICLE VII
Board of Directors
SECTION 1. Number and Terms. The number of directors which shall
constitute the whole Board of Directors shall be determined in the manner
provided in the Bylaws of the Corporation. The Board of Directors shall be
divided into three classes, designated Class I, Class II and Class III, which
shall be as nearly equal in number as possible. The initial directors of Class I
shall hold office for a term expiring at the next succeeding annual meeting; the
initial directors of Class II shall be elected to hold office for a term
expiring at the second succeeding annual meeting and the initial directors of
Class III shall be elected to hold office for a term expiring at the third
succeeding annual meeting. Beginning with the next succeeding annual meeting,
directors shall be chosen for a term of three years to succeed those whose terms
then expire and shall hold office until the third following annual meeting of
stockholders and until election of their respective successors.
SECTION 2. Vacancies. Any vacancy on the Board of Directors, whether
arising through death, resignation or removal of a director or through an
increase in the number of directors of any class, shall be filled by a majority
vote of all remaining directors. The term of office of any director elected to
fill such a vacancy shall expire at the expiration of the term of office of
directors of the class in which the vacancy occurred.
SECTION 3. Other Provisions. Notwithstanding any other provision of
this Article VII, and except as otherwise required by law, whenever the holders
of any one or more series of Preferred Stock or other securities of the
Corporation shall have the right, voting separately as a class, to elect one or
more directors of the Corporation, the term of office, the filling of vacancies
and other features of such directorships shall be governed by the terms of this
Restated Certificate of Incorporation applicable thereto, and unless the terms
of this Restated Certificate of Incorporation expressly provide otherwise, such
directorship shall be in addition to the number of directors provided in the
Bylaws and such directors shall not be classified. Elections of directors need
not be by written ballot unless the Bylaws of the Corporation shall so provide.
ARTICLE VIII
Bylaws
The power to adopt, alter, amend or repeal the Bylaws of the
Corporation shall be vested in the Board of Directors. The stockholders of the
Corporation may adopt, amend or repeal the Bylaws of the Corporation only by the
affirmative vote of holders of at least 66 2/3% of the combined voting power of
the then outstanding shares of stock of all classes and series of the
Corporation entitled to vote generally on matters requiring the approval of
stockholders (the "Voting Stock").
ARTICLE IX
Stockholder Meetings
Any action required or permitted to be taken by the stockholders of
the Corporation must be taken at a duly called and noticed meeting of
stockholders and may not be taken by consent in writing, unless such action
requiring or permitting stockholder approval is approved by a majority of the
directors then in office. An action required or permitted to be taken by the
stockholders which has been approved by a majority of the directors may be taken
by consent in writing if the consent is signed by the record holders of no less
than the Voting Stock that would otherwise be required for approval of such
action.
ARTICLE X
Amendments
The provisions set forth in Articles VI, VII, VIII and IX and in this
Article X may not be repealed, rescinded, altered or amended, and no other
provision may be adopted which is inconsistent therewith or impairs in any way
the operation or effect thereof, except by the affirmative vote of holders of
not less than 66 2/3% of the Voting Stock.
Consistent with the preceding sentence, the corporation reserves the
right to adopt, repeal, rescind, alter or amend in any respect any provision
contained in this Restated Certificate of Incorporation as prescribed by
applicable law.
IN WITNESS WHEREOF, the Corporation has caused this Restated
Certificate of Incorporation to be executed in its corporate name this llth day
of April, 1996.
PLANET HOLLYWOOD INTERNATIONAL, INC.,
a Delaware corporation
By:/s/ Scott E. Johnson
Name: Scott E. Johnson
Title: Vice President
Exhibit T3A-2
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
PLANET HOLLYWOOD INTERNATIONAL, INC.
The undersigned, being the President and Chief Executive Officer of
Planet Hollywood International, Inc., a Delaware corporation (the
"Corporation"), originally incorporated in the State of Delaware on December 16,
1994, for the purpose of amending and restating the Certificate of
Incorporation, hereby certifies that the following amended and restated
certificate of incorporation has been duly adopted in accordance with the
provisions of Sections 145 and 303 of the General Corporation Law of the State
of Delaware:
ARTICLE I
Name
The name of the Corporation is PLANET HOLLYWOOD INTERNATIONAL, INC.
ARTICLE II
Registered Office and Agent
The street address of the registered office of the Corporation in the
State of Delaware is 1013 Centre Road, in the City of Wilmington, County of New
Castle, Delaware 19805.
The name of the registered agent of the Corporation at that address is
Corporation Service Company.
ARTICLE III
Mailing Address
The mailing address of the Corporation is 8669 Commodity Circle,
Orlando, Florida 32819.
ARTICLE IV
Duration
This Corporation shall exist perpetually.
ARTICLE V
Purpose
The purpose or purposes of the Corporation are:
(1) To conduct any lawful business, to exercise any lawful purpose and
power, and to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware; and
(2) In general, to possess and exercise all the powers and privileges
granted by the General Corporation Law of Delaware or any other law of Delaware
or by this Amended and Restated Certificate of Incorporation together with any
power incidental thereto, so far as such powers and privileges are necessary or
convenient to the conduct, promotion or attainment of the business or purposes
of the Corporation.
ARTICLE VI
Capital Stock
SECTION 1. The maximum number of shares of capital stock which this
Corporation shall have authority to issue is Two Hundred Twenty-Five Million
(225,000,000), consisting of One Hundred Million (100,000,000) shares of Class A
Common Stock, $.01 par value, Twenty Five Million (25,000,000) shares of Class B
Common Stock, $.01 par value, and One Hundred Million (100,000,000) shares of
Preferred Stock, $.01 par value. The Class A Common Stock and the Class B Common
Stock are hereinafter referred to collectively as the "Common Stock".
Notwithstanding anything to the contrary set forth in this Article IV,
the Corporation shall not issue any non-voting equity securities; PROVIDED,
HOWEVER, that this provision, included in this Amended and Restated Certificate
of Incorporation in compliance with Section 1123(a)(6) of the United States
Bankruptcy Code of 1978, as amended (the "Bankruptcy Code"), shall have no force
and effect beyond that required by Section 1123(a)(6) of the Bankruptcy Code and
shall be effective only for so long as Section 1123(a)(6) of the Bankruptcy Code
is in effect and applicable to the Corporation.
Upon the filing in the Office of the Secretary of State of the State
of Delaware of this Amended and Restated Certificate of Incorporation, the
shares of Class A Common Stock, par value $.01 per share, and the shares of
Class B Common Stock, par value $.01 per share (collectively, the "Old Common
Stock"), of the Corporation issued and outstanding immediately prior to the time
when this Amended and Restated Certificate of Incorporation becomes effective
are hereby automatically canceled and extinguished. Upon the filing in the
Office of the Secretary of State of the State of Delaware of this Amended and
Restated Certificate of Incorporation, each certificate which prior to such
filing evidenced Old Common Stock shall be deemed canceled and extinguished.
The preferences, qualifications, limitations, restrictions and the
special or relative rights in respect of the shares of each class are as
follows:
SECTION 2. Preferred Stock. The Preferred Stock may be issued from
time to time in one or more series. All shares of Preferred Stock shall be of
equal rank and shall be identical, except in respect of the matters that may be
fixed and determined by the Board of Directors as hereinafter provided, and each
share of each series shall be identical with all other shares of such series,
except as to the date from which dividends are cumulative. The Board of
Directors hereby is authorized to cause such shares to be issued in one or more
classes or series and with respect to each such class or series to fix and
determine the designation, powers, preferences and rights of the shares of each
such series and the qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series
shall include, but not be limited to, determination of the following:
(1) the number of shares constituting a series, the distinctive
designation of a series and the stated value of a series, if different from the
par value;
(2) whether the shares of a series are entitled to any fixed or
determinable dividends, the dividend rate (if any) on such shares, whether the
dividends are cumulative and the relative rights of priority of dividends on
shares of that series;
(3) whether a series has voting rights in addition to the voting
rights provided by law and the terms and conditions of such voting rights;
(4) whether a series will have or receive conversion or exchange
privileges and the terms and conditions of such conversion or exchange
privileges;
(5) whether the shares of a series are redeemable and the terms and
conditions of such redemption, including the manner of selecting shares for
redemption if less than all shares are to be redeemed, the date or dates on or
after which the shares in the series will be redeemable and the amount payable
in case of redemption;
(6) whether a series will have a sinking fund for the redemption or
purchase of the shares in the series and the terms and the amount of such
sinking fund;
(7) the right of a series to the benefit of conditions and
restrictions on the creation of indebtedness of the Corporation or any
subsidiary, on the issuance of any additional capital stock (including
additional shares of such series or any other series) on the payment of
dividends or the making of other distributions on any outstanding stock of the
Corporation and the purchase, redemption or other acquisition by the
Corporation, or any subsidiary, of any outstanding stock of the Corporation;
(8) the rights of a series in the event of voluntary or involuntary
liquidation, dissolution or winding up of the Corporation and the relative
rights of priority of payment of a series; and
(9) any other relative, participating, optional or other special
rights, qualifications, limitations or restrictions of such series.
Dividends on outstanding shares of Preferred Stock shall be paid or
set apart for payment before any dividends shall be paid or declared or set
apart for payment on the Common Stock with respect to the same dividend period.
If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation the assets available for distribution to holders
of shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series in accordance
with the respective preferential amounts (including unpaid cumulative dividends,
if any, payable with respect thereto).
SECTION 3. Common Stock - General Provisions. The Common Stock shall
be subject to the express terms of the Preferred Stock and any series thereof.
Except as otherwise provided in this Amended and Restated Certificate of
Incorporation or as otherwise required by the Delaware General Corporation Law,
all shares of Class A Common Stock and Class B Common Stock shall be identical
and shall entitle the holders thereof to the same powers, preferences and
rights, and shall be subject to the same qualifications, limitations and
restrictions thereof.
Shares of Common Stock authorized hereby shall not be subject to
preemptive rights. The holders of shares of Common Stock now or hereafter
outstanding shall have no preemptive right to purchase or have offered to them
for purchase any of such authorized but unissued shares, or any shares of
Preferred Stock, Common Stock or other equity securities issued or to be issued
by the Company.
Subject to the preferential and other dividend rights applicable to
Preferred Stock, the holders of shares of Common Stock shall be entitled to
receive such dividends (payable in cash, stock or otherwise) as may be declared
on the Common Stock by the Board of Directors at any time or from time to time
out of any funds legally available therefor.
In the event of any voluntary or involuntary liquidation, distribution
or winding up of the Corporation, after distribution in full of the preferential
or other amounts to be distributed to the holders of shares of Preferred Stock,
the holders of shares of Common Stock shall be entitled to receive all of the
remaining assets of the Corporation available for distribution to its
stockholders, ratably in proportion to the number of shares of Common Stock held
by them.
SECTION 4. Common Stock - Other Provisions.
(a) Voting Rights. Except as prescribed in this Amended and Restated
Certificate of Incorporation or as otherwise required by applicable law, holders
of Class A Common Stock and Class B Common Stock shall vote together as a single
class on all matters submitted to the stockholders for a vote. With respect to
all matters upon which stockholders are entitled to vote, the holders of
outstanding shares of Common Stock shall be entitled to one vote in person or by
proxy for each share of Common Stock standing in the same of such stockholders
on the record of stockholders.
(i) Except as otherwise provided in this Section 4, the holders of
Class B Common Stock shall be entitled, voting separately as a single class by a
plurality of the votes cast, to the exclusion of all other classes of the
Corporation's capital stock, to elect all members of the Corporation's Board of
Directors (the "Class B Directors"); PROVIDED, HOWEVER, that prior to the
payment in full of all of the Corporation's obligations under the Deferred
Interest Notes, two of the Class B Directors shall be individuals designated by
the Trustee under the Deferred Interest Notes Indenture (the "Noteholder
Designees") pursuant to the Voting Agreement. Any one or more of the Class B
Directors may be removed with or without cause only by a vote of the holders of
Class B Common Stock, voting separately as a single class and holding not less
than a majority of the issued and outstanding shares of Class B Common Stock;
provided, however, that the Noteholder Designees may not be so removed without
the prior written consent of the Trustee.
(ii) Notwithstanding the provisions of subparagraph (i) above, after
the payment in full of all of the Corporation's obligations under the Deferred
Interest Notes, the holders of Class A Common Stock shall be entitled, voting
separately as a single class by a plurality of the votes cast, to the exclusion
of all other classes of the Corporation's capital stock, to elect two (2)
directors to serve on the Corporation's Board of Directors (the "Class A
Directors"). Any one or more of the Class A Directors may be removed with or
without cause only by a vote of the holders of Class A Common Stock, voting
separately as a single class and holding not less than a majority of the issued
and outstanding shares of Class A Common Stock.
(iii) At such time when there shall be no shares of Class B Common
Stock issued and outstanding, the holders of Class A Common Stock shall be
entitled to elect all members of the Corporation's Board of Directors. Directors
so elected by the holders of Class A Common Stock may be removed only with cause
by a vote of the holders of not less than a majority of the issued and
outstanding shares of Class A Common Stock.
(iv) In addition to any other vote that may be required by the
Delaware General Corporation Law or this Amended and Restated Certificate of
Incorporation, the vote or consent of the holders of any class of Common Stock
voting separately as a single class shall be required to amend or restate this
Amended and Restated Certificate of Incorporation in a manner that would alter
or change the powers, preferences or special rights of such class of Common
Stock, so as to affect them adversely.
(b) Dividends and Distributions. Except as otherwise provided in this
Amended and Restated Certificate of Incorporation, holders of Common Stock shall
be entitled to such dividends and other distributions in cash, stock or property
of the Corporation as may be declared thereon by the Board of Directors from
time to time out of assets or funds of the Corporation legally available
therefor; PROVIDED, HOWEVER, that in no event may the rate of any dividend
payable on outstanding shares of any class of Common Stock be greater than the
dividend rate payable on outstanding shares of the other class of Common Stock.
All dividends and distributions on the Class A Common Stock payable in stock of
the Corporation shall be made in shares of Class A Common Stock, and all
dividends and distributions on the Class B Common Stock payable in stock of the
Corporation shall be made at the same dividend rate per share in shares of Class
B Common Stock. In no event will shares of any class of Common Stock be split,
divided or combined unless the outstanding shares of the other class of Common
Stock shall be proportionately split, divided or combined.
(c) Options, Rights or Warrants. The Corporation may make offerings of
options, rights or warrants to subscribe for shares of either class of capital
stock to all holders of one class of Common Stock if an identical offering is
made simultaneously to all the holders of the other class. All such offerings of
options, rights or warrants shall offer the respective holders of Class A Common
Stock and Class B Common Stock the right to subscribe at the same rate per
share.
SECTION 5. Conversion of Class B Common Stock.
(a) Automatic Conversion.
(i) Upon the transfer of shares of Class B Common Stock (other than a
transfer to a New Money Investor or an affiliate of a New Money Investor), such
shares of Class B Common Stock shall automatically convert into an equal number
of shares of Class A Common Stock.
(ii) In the event that all issued and outstanding shares of Class B
Common Stock constitute 10% or less of all issued and outstanding shares of
Common Stock, all issued and outstanding shares of Class B Common Stock shall
automatically convert into an equal number of shares of Class A Common Stock.
(iii) Upon the occurrence of any event set forth in clauses (i) and
(ii) above (each an "Automatic Conversion"), the conversion of the Class B
Common Stock affected thereby shall be effective without any further action on
the part of the Corporation or the holder or holders of Class B Common Stock.
Stock certificates formerly representing shares of Class B Common Stock held by
(A) the transferee of Class B Common Stock in the case of clause (i) above, or
(B) the record holders of then outstanding shares of Class B Common Stock in the
case of clause (ii) above, shall thereupon and thereafter be deemed to represent
a number of shares of Class A Common Stock equal to the number of shares of
Class B Common Stock represented by such certificates. Each holder of shares of
Class B Common Stock shall to deliver to the Corporation or any transfer agent
for shares of Class A Common Stock the certificates representing shares of Class
B Common Stock subject to Automatic Conversion, but the failure to deliver such
certificates shall not affect the validity of such Automatic Conversion. As
promptly as practicable after such surrender, the Corporation or its transfer
agent will deliver to, or upon the written order of, such holder, a certificate
or certificates representing the number of shares of Class A Common Stock
issuable upon such Automatic Conversion. The Board Directors of the Corporation
shall have all power and authority necessary or advisable to implement the
provisions of this Section.
(b) Voluntary Conversion. All shares of Class B Common Stock shall be
convertible, at the option of the record holders of such shares, into an equal
number of validly issued, fully paid and nonassessable shares of Class A Common
Stock at any time after payment in full of the Deferred Interest Notes; provided
that such optional conversion must include all then outstanding shares of Class
B Common Stock.
(c) Voluntary Conversion Procedure. At the time of the voluntary
conversion, if any, the record holders of the Class B Common Stock shall deliver
to the principal office of the Corporation or any transfer agent for shares of
the Class A Common Stock (i) the certificate or certificates representing in the
aggregate all shares of Class B Common Stock, duly endorsed in blank or
accompanied by proper instruments of transfer and (ii) written notice to the
Corporation stating that the record holders elect to convert all outstanding
shares of Class B Common Stock and stating the name or names (with addresses)
and denominations in which the certificate or certificates representing the
shares of Class A Common Stock issuable upon such conversion are to be issued
and including instructions for the delivery thereof. Conversion shall be deemed
to have been effected at the time when delivery is made to the Corporation or
its transfer agent of such written notice and the certificate or certificates
representing all outstanding shares of Class B Common Stock, and as of such time
each person named in such written notice as the person to whom a certificate
representing shares of Class A Common Stock is to be issued shall be deemed to
be the holder of record of the number of shares of Class A Common Stock to be
evidenced by that certificate. Upon such delivery, the Corporation or its
transfer agent shall promptly issue and deliver at such stated address to such
record holder of shares of Class A Common Stock a certificate or certificates
representing the number of shares of Class A Common Stock to which such record
holder is entitled by reason of such conversion, and shall cause such shares of
Class A Common Stock to be registered in the name of such record holder.
(d) Reclassifications. In the event of a reclassification or other
similar transaction as a result of which the shares of Class A Common Stock are
converted into another security, then the holders of Class B Common Stock shall
be entitled to receive upon conversion the amount of such security that such
holders would have received if such conversion had occurred immediately prior to
the record date of such reclassification or other similar transaction.
(e) Retired Shares. Shares of Class B Common Stock that are converted
into shares of Class A Common Stock as provided herein shall be canceled and
retired by the Corporation, such shares shall not be reissued and the number of
shares of Class B Common Stock which the Corporation shall have authority to
issue shall be decreased by the number of shares of Class B Common Stock so
converted. The Board of Directors shall take such steps as are required to so
retire such shares.
(f) Reservation. The Corporation shall at all times reserve and keep
available, out of its authorized and unissued shares of Class A Common Stock,
for the purposes of effecting conversions, such number of duly authorized shares
of Class A Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Class B Common Stock; PROVIDED, HOWEVER,
that nothing contained herein shall be construed to preclude the Corporation
from satisfying its obligations in respect of the conversion of the outstanding
shares of Class B Common Stock by delivery of purchased shares of Class A Common
Stock which are held in treasury of the Corporation. All the shares of Class A
Common Stock so issuable shall, when so issued, be duly and validly issued,
fully paid and nonassessable, and free from liens and charges with respect to
the issue. The Corporation shall take all actions as may be necessary to ensure
that all such shares of Class A Common Stock may be so issued without violation
of any applicable law or regulation, or of any requirements of any national
securities exchange upon which the shares of Class A Common Stock are or may be
listed, or of any inter-dealer quotation system of a registered national
securities association upon which the shares of Class A Common Stock are or may
be listed.
(g) Taxes. The issuance of a certificate for shares of Class A Common
Stock upon conversion of shares of Class B Common Stock shall be made without
charge for any stamp or other similar tax in respect of such issuance. However,
if any such certificate is to be issued in a name other than that of the holder
of the shares of Class B Common Stock converted, the person or persons
requesting the issuance thereof shall pay to the Corporation the amount of any
tax which may be payable in respect of any transfer involved in such issuance or
shall establish to the satisfaction of the Corporation that such tax has been
paid or is not required to be paid.
ARTICLE VII
Board of Directors
SECTION 1. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors. In addition to the
powers and authorities herein or by statute expressly conferred upon it, the
Board of Directors may exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject, nevertheless, to the
provisions of the laws of the State of Delaware, or this Amended and Restated
Certificate of Incorporation and the By-laws of the Corporation.
SECTION 2. Number and Terms. The number of directors which shall
constitute the whole Board of Directors shall be determined in the manner
provided in the Bylaws of the Corporation. The Board of Directors shall be
divided into three classes, designated Class I, Class II and Class III, which
shall be as nearly equal in number as possible. The initial directors of Class I
shall hold office for a term expiring at the next succeeding annual meeting; the
initial directors of Class II shall be elected to hold office for a term
expiring at the second succeeding annual meeting and the initial directors of
Class III shall be elected to hold office for a term expiring at the third
succeeding annual meeting. Beginning with the next succeeding annual meeting,
directors shall be chosen for a term of three years to succeed those whose terms
then expire and shall hold office until the third following annual meeting of
stockholders and until election of their respective successors.
SECTION 3. Vacancies. Any vacancy on the Board of Directors, whether
arising through death, resignation or removal of a director or through an
increase in the number of directors of any class, shall be filled in the
following manner: (i) vacancies in Class A directorships shall be filled by the
holders of the issued and outstanding shares of Class A Common Stock, voting
separately as a single class; (ii) vacancies in Class B directorships shall be
filled by the holders of the issued and outstanding shares of Class B Common
Stock, voting separately as a single class; and (iii) vacancies in the
Noteholder Designee directorships shall be filled by individuals designated by
the Trustee under the Deferred Interest Notes Indenture pursuant to the Voting
Agreement. The term of office of any director elected to fill such a vacancy
shall expire at the expiration of the term of office of directors of the class
in which the vacancy occurred.
SECTION 4. Other Provisions. Notwithstanding any other provision of
this Article VII, and except as otherwise required by law, whenever the holders
of any one or more series of Preferred Stock or other securities of the
Corporation shall have the right, voting separately as a class, to elect one or
more directors of the Corporation, the term of office, the filling of vacancies
and other features of such directorships shall be governed by the terms of this
Amended and Restated Certificate of Incorporation applicable thereto, and unless
the terms of this Amended and Restated Certificate of Incorporation expressly
provide otherwise, such directorship shall be in addition to the number of
directors provided in the Bylaws and such directors shall not be classified.
Elections of directors need not be by written ballot unless the Bylaws of the
Corporation shall so provide.
ARTICLE VIII
Bylaws
The power to adopt, alter, amend or repeal the Bylaws of the
Corporation shall be vested in the Board of Directors. The stockholders of the
Corporation may adopt, amend or repeal the Bylaws of the Corporation only by the
affirmative vote of holders of at least 66 2/3% of the combined voting power of
the then outstanding shares of stock of all classes and series of the
Corporation entitled to vote generally on matters requiring the approval of
stockholders (the "Voting Stock").
ARTICLE IX
Stockholder Meetings
Any action required or permitted to be taken by the stockholders of
the Corporation must be taken at a duly called and noticed meeting of
stockholders and may not be taken by consent in writing, unless such action
requiring or permitting stockholder approval is approved by a majority of the
directors then in office. An action required or permitted to be taken by the
stockholders which has been approved by a majority of the directors may be taken
by consent in writing if the consent is signed by the record holders of no less
than the Voting Stock that would otherwise be required for approval of such
action.
ARTICLE X
Amendments
The provisions set forth in Articles VI, VII, VIII and IX and in this
Article X may not be repealed, rescinded, altered or amended, and no other
provision may be adopted which is inconsistent therewith or impairs in any way
the operation or effect thereof, except by the affirmative vote of holders of
not less than 66 2/3% of the Voting Stock.
Consistent with the preceding sentence, the Corporation reserves the
right to adopt, repeal, rescind, alter or amend in any respect any provision
contained in this Amended and Restated Certificate of Incorporation as
prescribed by applicable law.
ARTICLE XI
Definitions
The following terms used herein shall the meanings specified below.
"Deferred Interest Notes" shall mean the $___ million principal amount
of 10% Secured Deferred Interest Notes due 2005 issued by the Corporation
pursuant to the Plan under the Secured Deferred Interest Notes Indenture.
"Deferred Interest Notes Indenture" means the Indenture among the
Corporation, as Issuer, the Subidiariy Guarantors named therein, and United
States Trust Company of New York, as trustee, which indenture relates to the
Deferred Interest Notes.
"New Class B Common Stock" means the 7,000,000 shares of Class B
Common Stock to be issued to the New Money Investors under the Plan.
"New Money Investors" means certain persons or entities that have
agreed to purchase for an aggregate purchase price of $30 million to acquire
7,000,000 shares of New Class B Common Stock in accordance with the terms of the
Plan.
"Plan" means the Joint Plan of Reorganization proposed by the
Corporation and certain of its subsidiaries, as it may be amended or modified
from time to time, and as confirmed by Order dated January 20, 2000 by the
United States Bankruptcy Court for the District of Delaware.
"Voting Agreement" means that certain Voting Agreement dated as of
February __, 2000 by and among the New Money Investors and the Trustee under the
Deferred Interest Notes Indenture.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Certificate of Incorporation to be executed in its corporate name this
__ day of _________, 2000.
PLANET HOLLYWOOD INTERNATIONAL, INC.,
a Delaware corporation
By: _________________________
Name:
Title:
Exhibit T3B-1
As approved and adopted
by the Board of Directors
as of July 27, 1998
THIRD AMENDED AND RESTATED BY-LAWS
OF
PLANET HOLLYWOOD INTERNATIONAL, INC.
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders of this
Corporation for the election of directors and for the transaction of any proper
business shall be held at the time and place designated by the Board of
Directors (the "Board") of the Corporation.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders shall be
held when called by the Chief Executive Officer or by a majority of the Board of
Directors. Special meetings may not be called by any other person. Written
notice of a special meeting pursuant to Section 4 herein shall be given to all
shareholders entitled to vote at such meeting not less than 10 nor more than 60
days before the date of the meeting. Each such special meeting shall be held at
such date and time as requested by the person or persons calling the meeting
within the limits fixed by law. Business transacted at any special meeting of
shareholders shall be limited to the purposes stated in the notice.
SECTION 3. PLACE. Meetings of shareholders may be held in the State of
Delaware or outside the State of Delaware.
SECTION 4. NOTICE. Written notice stating the place, date and time of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than 10 nor more than 60 days
before the meeting, either personally or by first class mail, by or at the
direction of the Chief Executive Officer, the Secretary, or the officer or
persons calling the meeting to each shareholder of record entitled to vote at
such meeting. If mailed, such notice shall be effective when deposited in the
United States mail addressed to the shareholder at his address as it appears on
the Corporation's current record of shareholders.
SECTION 5. NOTICE OF ADJOURNED MEETINGS. When a meeting is adjourned to
another time or place, it shall not be necessary to give any notice of the
adjourned meeting if the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken, and at the adjourned
meeting any business may be transacted that might have been transacted on the
original date of the meeting. If, however, the adjournment days, or if, after
the adjournment, the Board of is for more than 30 days, or if, after the
adjournment, the Board of Directors fixes a new record date for the adjourned
meeting, a notice of the adjourned meeting shall be given as provided in Section
4 herein to each shareholder of record on the new record date entitled to vote
at such meeting.
SECTION 6. NOTICE OF SHAREHOLDER BUSINESS AND NOMINATIONS. Except as may
otherwise be provided herein, or in the Restated Certificate of Incorporation in
connection with rights to elect directors under specified circumstances which
may be granted to the holders of any series of Preferred Stock, nominations for
the election of directors and the proposal of business to be considered by the
shareholders may be made by the Board or any shareholder of record entitled to
vote at the meeting and who complies with the notice procedures set forth in
this by-law.
For nominations or other business to be properly brought before an annual
meeting by a shareholder, the shareholder must have given timely notice thereof
in writing to the Secretary of the Corporation and such other business must
otherwise be a proper matter for shareholder action. Except as otherwise
provided by applicable law, to be timely, a shareholder's notice must be
delivered to the Secretary of the Corporation at the Corporation's principal
executive offices not later than the close of business on the 60th day, nor
earlier than the close of business on the 90th day, prior to the first
anniversary of the preceding year's annual meeting; PROVIDED, HOWEVER, that in
the event that the date of the annual meeting is more than 30 days before or 60
days after such anniversary date, notice by the shareholder must be so delivered
not earlier than the close of business on the later of the 60th day prior to
such meeting or the 10th day following the day on which public announcement of
the date of such meeting is made by the Corporation. In no event shall public
announcement of an adjournment of an annual meeting commence a new time period
for giving of a shareholder's notice as described above.
Such shareholder's notice shall set forth (a) as to each person whom the
shareholder proposes to nominate for election to the Board of Directors, all
information relating to such person required to be disclosed in solicitation of
proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934 (including such person's written consent to
being named in the proxy statements as a nominee and to serving as a director if
elected); (b) as to any other business that the shareholder proposes to bring
before the meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting and
any material interest in such business of such shareholder and the beneficial
owner, if any, on whose behalf the nomination or proposal is made; and (c) as to
the shareholder giving notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made (i) the name and address of such shareholder,
as they appear on the Corporation's books, and of such beneficial owner and (ii)
the class and number of shares of the Corporation which are owned beneficially
and of record by such shareholder and beneficial owner. Notice of nominations
which are proposed by the Board shall be given by the Chairman, the Chief
Executive Officer, the President or the Secretary of the Corporation on behalf
of the Board.
The chairperson of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he or she should so determine, he or she shall so
declare to the meeting and the defective nomination shall be disregarded.
SECTION 7. FIXING RECORD DATE. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any distribution, or in
order to make a determination of shareholders for any other purpose, the Board
of Directors may fix in advance a date as the record date for any determination
of shareholders, such date in any case to be not more than 60 days and, in case
of a meeting of shareholders, not less than 10 days prior to the date on which
the particular action requiring such determination of shareholders is to be
taken.
If the stock transfer books are not closed and no record date is fixed for
the determination of shareholders entitled to notice or to vote at an annual or
special meeting of shareholders, or shareholders entitled to receive payment of
a distribution, the date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring such distribution is
adopted, as the case may be, shall be the record date for such determination of
shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date for the adjourned meeting. A new record date must be fixed if the
meeting is adjourned to a date more than 120 days after the date fixed for the
original meeting.
SECTION 8. VOTING RECORD. The officers or agent having charge of the stock
transfer books for shares of the Corporation shall make, at least 10 days before
each meeting of shareholders, a complete alphabetical list of the shareholders
entitled to vote at such meeting or any adjournment thereof, arranged by voting
group with the address of and the number and class and series, if any, of shares
held by each. The list, for a period of 10 days prior to such meeting, shall be
available for inspection at the principal office of the Corporation, or at the
office of the transfer agent or registrar of the Corporation or at a place
identified in the meeting notice in the city where the meeting will be held.
Upon written demand to the Corporation, any shareholder or his agent or attorney
shall be entitled to inspect the list at any time during usual business hours.
The list shall also be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any shareholder or his agent
or attorney at any time during the meeting.
If the requirements of this section have not been substantially complied
with, the meeting, on demand of any shareholder in person or by proxy, shall be
adjourned until the requirements are complied with. If no such demand is made,
failure to comply with the requirements of this section shall not affect the
validity of any action taken at such meeting.
SECTION 9. SHAREHOLDER QUORUM AND VOTING. A majority of all then
outstanding shares of voting stock entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders. When a specified
item of business is required to be voted on by a class or series of stock, a
majority of the shares of such class or series shall constitute a quorum for the
transaction of such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on the subject matter shall be
the act of the shareholders unless otherwise provided by law or by the Restated
Certificate of Incorporation.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
SECTION 10. VOTING OF SHARES. Each outstanding share of Class A Common
Stock shall be entitled to one vote on each matter submitted to a vote at a
meeting of shareholders. Except as required by applicable law, shares of Class B
Common Stock shall not be entitled to any votes for the election of directors or
on any matter presented to the shareholders.
Shares of stock of this Corporation owned directly or indirectly by another
corporation the majority of the voting stock of which is owned, directly or
indirectly, by this Corporation are not entitled to vote, and shall not be
counted in determining the total number of outstanding shares at any given time.
A shareholder or the shareholder's attorney in fact may vote either in
person or by proxy executed in writing by the shareholder or his duly authorized
attorney-in-fact.
At each election for directors every shareholder entitled to vote at such
election shall have the right to vote, in person or by proxy, the number of
votes represented by the shares owned by him for as many persons as there are
directors to be elected at that time and for whose election he has a right to
vote.
Shares standing in the name of another corporation, domestic or foreign,
may be voted by the officer, agent, or proxy designated by the by-laws of the
corporate shareholder; or, in the absence of any applicable by-law, by such
person as the board of directors of the corporate shareholder may designate.
Proof of such designation may be made by presentation of a certified copy of the
by-laws or other instrument of the corporate shareholder. In the absence of any
such designation, or in case of conflicting designation by the corporate
shareholder, the Chairman of the Board, Chief Executive officer, President, any
Vice President, Secretary and Treasurer of the corporate shareholder shall be
presumed to possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian, personal
representative, or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name or the name of his nominee.
Shares held by or under the control of a receiver, trustee in bankruptcy
proceedings or an assignee for the benefit of creditors, may be voted by such
receiver, trustee or assignee, without the transfer thereof into the name of
such receiver, trustee or assignee.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of redeemable
shares has been mailed to the holders thereof and a sum sufficient to redeem
such shares has been deposited with a bank, trust company or other financial
institution, with irrevocable instruction and authority to pay the redemption
price to the holders thereof upon surrender of certificates therefor, such
shares shall not be entitled to vote on any matter and shall not be deemed to be
outstanding shares.
SECTION 11. WRITTEN CONSENT OF SHAREHOLDERS. Any action required or
permitted to be taken by the shareholders of the Corporation must be effected at
a duly called annual or special meeting of the shareholders, unless such action
is approved by a majority of the Board of Directors. In the event of such
approval, such action may be taken without a meeting, without prior notice and
without a vote if a consent in writing, setting forth the action so taken, shall
be signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting of shareholders at which all shares entitled to vote thereon were
present and voted, provided that all requirements of law and the Restated
Certificate of Incorporation have been satisfied. To be effective, the executed
written consent of the shareholders must be delivered to the Corporation within
60 days of the date the earliest written consent is received by the Corporation.
If any class of shares is entitled to vote thereon as a class, such written
consent shall be required of the holders of a majority of the shares of each
class of shares entitled to vote thereon.
After obtaining such authorization by written consent, notice shall
promptly be given to those shareholders who have not consented in writing or who
are not entitled to vote on the action. The notice shall fairly summarize the
material features of the authorized action and, if the action be a merger,
consolidation or sale or exchange of assets for which dissenters rights are
provided by law, the notice shall contain a clear statement of the right of
shareholders dissenting therefrom to be paid the fair value of their shares upon
compliance with further provisions of the law regarding the rights of dissenting
shareholders.
SECTION 12. WAIVER OF NOTICE OF MEETINGS OF SHAREHOLDERS. Notice of a
meeting of the shareholders need not be given to any shareholder who signs a
Waiver of Notice either before or after the meeting. Attendance of a shareholder
at a meeting shall constitute a waiver of notice of such meeting and waiver of
any and all objections to the place of the meeting, the time of the meeting, the
manner in which it has been called or convened, or the matters considered at a
meeting except when a shareholder states, at the beginning of the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened, or except when a shareholder objects to considering a
particular matter that is not within the purposes described in the meeting
notice.
Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the shareholders need be specified in any written Waiver
of Notice of such meeting.
ARTICLE II
DIRECTORS
SECTION 1. FUNCTION. All corporate powers shall be exercised by or under
the authority of, and the business and affairs of the Corporation shall be
managed under the direction of, the Board of Directors.
SECTION 2. QUALIFICATION. Directors must be natural persons who are 18
years of age or older, but need not be residents of this state or shareholders
of this Corporation.
SECTION 3. COMPENSATION. The Board of Directors shall have authority to fix
the compensation of directors.
SECTION 4. DUTIES OF DIRECTORS. A director shall perform his duties as a
director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the Corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the Corporation whom the director
reasonably believes to be reliable and competent in the matters presented;
(b) counsel, public accountants or other persons as to matters which the
director reasonably believes to be within such person's professional or expert
competence; or
(c) a committee of the Board upon which he does not serve, duly designated
in accordance with a provision of the Restated Certificate of Incorporation or
the By-laws, as to matters within its designated authority, which committee the
director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he has
knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
In discharging his duties, a director may consider such factors as the
director deems relevant, including the long-term prospects and interests of the
Corporation and its shareholders, and the social, economic, legal, or other
effects of any action on the employees, suppliers, customers of the Corporation
or its subsidiaries, the communities and society in which the Corporation or its
subsidiaries operate, and the economy of the state and the nation.
A person who performs his duties in compliance with this section shall have
no liability by reason of being or having been a director of the Corporation.
SECTION 5. PRESUMPTION OF ASSENT. A director of the Corporation who is
present at a meeting of its Board of Directors or a committee of the Board of
Directors at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless (a) he objects at the beginning of the
meeting (or promptly upon his arrival) to holding it or transacting specified
business at the meeting; or (b) he votes against such action or abstains from
voting in respect thereto.
SECTION 6. NUMBER. Except as may otherwise be provided pursuant to the
Restated Certificate of Incorporation in connection with rights to elect
directors which may be granted to the holders of any series of Preferred Stock,
the number of directors which shall constitute the whole Board shall be fixed
from time to time exclusively pursuant to a resolution adopted by a majority of
the Board of Directors. The directors, other than those who may be elected by
the holders of any shares of Preferred Stock under specified circumstances,
shall be divided, with respect to the time for which they severally hold office,
into three classes, as nearly equal in number as is reasonably possible, with
the term of office of the first class to expire at the 1997 annual meeting of
shareholders, the term of office of the second class, to expire at the 1998
annual meeting of shareholders and the term of office of the third class to
expire at the 1999 annual meeting of shareholders, with each director to hold
office until his or her successor has been duly elected and qualified. At each
annual meeting of shareholders, commencing with the 1997 annual meeting, (i)
directors elected to succeed those directors whose terms shall expire shall be
elected for a term of office to expire at the third succeeding annual meeting of
shareholders after their election, each director to hold office until his or her
successor shall have been duly elected and qualified, and (ii) if authorized by
a resolution of the Board of Directors, directors may be elected to fill any
vacancy on the Board of Directors, regardless of how such vacancy shall have
been created.
SECTION 7. ELECTION OF DIRECTORS. Except as may otherwise be provided
pursuant to the Restated Certificate of Incorporation in connection with the
rights to elect directors under specified circumstances which may be granted to
the holders of any series of Preferred Stock, and except as otherwise provided
pursuant to Section 8 of this Article II, directors shall be elected by
shareholders of the Corporation. Except as otherwise provided by applicable law,
at each election the persons receiving the greatest number of votes, up to the
number of directors then to be elected, shall be the persons then elected. Each
director shall serve until his or her successor is elected and qualified or
until his or her death, resignation or removal. The election of directors is
subject to any provisions relating thereto contained in the Restated Certificate
of Incorporation.
SECTION 8. VACANCIES. Except as may otherwise be provided pursuant to the
Restated Certificate of Incorporation in connection with rights to elect
additional directors under specified circumstances which may be granted to the
holders of any series of Preferred Stock, newly created directorships resulting
from any increase in the number of directors, or any vacancies on the Board of
Directors resulting from death, resignation, removal or other causes, shall be
filled solely by the affirmative vote of a majority of the remaining directors
then in office, even though less than a quorum of the Board of Directors. Any
director elected in accordance with the preceding sentence shall hold office
until such director's successor shall have been elected and qualified or until
such director's death, resignation or removal, whichever first occurs. No
decrease in the number of directors constituting the Board shall shorten the
term of any incumbent director.
SECTION 9. RESIGNATION OF DIRECTORS. Any director of the Corporation may
resign at any time by giving written notice to the Chairman of the Board, Chief
Executive Officer, President or to the Secretary of the Corporation. The
resignation of any director shall take effect at the time specified therein;
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 10. REMOVAL OF DIRECTORS. Subject to the right to elect directors
under specified circumstances which may be granted pursuant to the Restated
Certificate of Incorporation to the holders of any series of Preferred Stock and
unless otherwise provided by law, any director may be removed from office
without cause only by the affirmative vote of the holders of at least 66 2/3% of
the voting power of the then outstanding shares of voting stock, voting together
as a single class.
SECTION 11. QUORUM AND VOTING. A majority of the number of directors fixed
by these By-laws or by resolution of the Board of Directors shall constitute a
quorum for the transaction of business. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
SECTION 12. DIRECTOR CONFLICTS OF INTEREST. No contract or other
transaction between this Corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) the fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) the fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) the contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized by the Board, a committee or the
shareholders.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors of a committee thereof which
authorizes, approves or ratifies such contract or transaction.
SECTION 13. EXECUTIVE AND OTHER COMMITTEES. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution, shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required by
law to be approved by shareholders;
(b) designate candidates for the office of director, for purposes of proxy
solicitation or otherwise;
(c) fill vacancies on the Board of Directors or any committee thereof;
(d) adopt, amend or repeal these By-laws or the Restated Certificate of
Incorporation;
(e) authorize or approve the reacquisition of shares unless pursuant to a
general formula or method specified by the Board of Directors;
(f) adopt an agreement of merger or consolidation; or
(g) authorize or approve the issuance or sale of, or any contract to issue
or sell, shares or designate the terms of a series of a class of shares, except
that the Board of Directors, having acted regarding general authorization for
the issuance or sale of shares, or any contract therefor, and, in the case of a
series, the designation thereof, may, pursuant to a general formula or method
specified by the Board of Directors, by resolution or by adoption of a stock
option or other plan, authorize a committee to fix the terms of any contract for
the sale of the shares and to fix the terms upon which such shares may be issued
or sold, including the price, the rate or manner of payment of dividends,
provisions for redemption, sinking fund, conversion, voting or preferential
rights, and provisions for other features of a class of shares, or a series of a
class of shares, with full power in such committee to adopt any final resolution
setting forth all the terms thereof and to authorize the statement of the terms
of a series for filing with the office of the Secretary of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
SECTION 14. CHANGES IN COMMITTEES; RESIGNATIONS, REMOVALS AND VACANCIES.
The Board of Directors shall have power at any time to change or remove the
members of, to fill vacancies in, and to discharge any committee created
pursuant to these By-laws, either with or without cause. Any member of any such
committee may resign at any time by giving written notice to the Board or the
Chairman of the Board or the Secretary. Such resignation shall take effect upon
receipt of such notice or at any later time specified therein; and, unless
otherwise specified therein, acceptance of such resignation shall not be
necessary to make it effective. Any vacancy in any committee, whether arising
from death, resignation, an increase in the number of committee members or any
other cause, shall be filled by the Board of Directors in the manner prescribed
in these By-laws for the original appointment of the members of such committee.
SECTION 15. PLACE OF MEETINGS. Regular and special meetings by the Board of
Directors may be held within or without the State of Delaware.
SECTION 16. TIME, NOTICE AND CALL OF MEETINGS. Regular meetings of the
Board of Directors shall be held at times and places specified by the Board of
Directors without notice of the date, time, place or purpose of the meeting.
Written notice of the date, time and place of special meetings of the Board of
Directors shall be given to each director at least 2 days before the meeting.
The notice need not describe the purpose of the special meeting. In addition to
any other regular meetings, a regular meeting of the Board of Directors shall be
held, without other notice than this by-law, immediately after and at the same
place as the annual meeting of shareholders.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any regular
or special meeting of the Board of Directors need be specified in the notice or
waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists, may
adjourn any meeting of the Board of Directors to another time and place. Notice
of any such adjourned meeting shall be given to the directors who were not
present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the Chairman of the
Board, by the Chief Executive Officer, by the President of the Corporation, or
by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
SECTION 17. ACTION WITHOUT A MEETING. Any action required to be taken at a
meeting of the directors of the Corporation, or any action which may be taken at
a meeting of the directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action to be taken, signed by
all of the directors, or all the members of the committee, as the case may be,
is filed in the minutes of the proceedings of the Board or of the committee.
Such consent shall have the same effect as a unanimous vote and may be described
as such in any document.
SECTION 18. ADVISORY DIRECTORS. The Board of Directors shall have the
authority to elect a board of outside directors consisting of two members
initially which number can be increased or decreased by a vote of the
shareholders. The outside directors shall not be shareholders or officers of the
Corporation, and shall not have voting powers, but rather are to act in the
capacity of consulting and advising the Board of Directors at their invitation.
ARTICLE III
OFFICERS
SECTION 1. OFFICERS. The officers of this Corporation shall consist of a
Chairman of the Board, a Chief Executive Officer, a President, a Secretary and a
Treasurer, each of whom shall be elected by the Board of Directors, and shall
serve until their successors are chosen and qualify. Such other officers and
assistant officers and agents as may be deemed necessary may be elected or
appointed by the Board of Directors from time to time.
Any two or more offices may be held by the same person. The failure to
elect a President, Chairman of the Board, Secretary or Treasurer shall not
affect the existence of this Corporation.
SECTION 2. DUTIES. The officers of this Corporation shall have the
following duties:
The Chief Executive Officer of the Corporation shall have overall
responsibility for the Corporation, subject to the directions of the Board of
Directors, and shall preside at all meetings of the shareholders and, unless the
Chairman of the Board of Directors has been elected and is present, shall
preside at all meetings of the Board of Directors.
The President and Chief Operating Officer shall report to the Chief
Executive Officer and the Board of Directors and shall be responsible for the
general and active management of the business, operations and affairs of the
Corporation, subject to the direction of the Chief Executive Officer.
The Chairman of the Board of Directors shall preside at all meetings of the
Board of Directors.
The Secretary shall have custody of, and maintain, all the corporate
records except the financial records, shall have the authority to execute any
and all documents in connection with intellectual property matters, including,
but not limited to, Powers of Attorney, Appointment of Resident Agent forms and
any other documents which are required in connection with the intellectual
property matters of the Corporation, shall prepare the minutes of all meetings
of the shareholders and Board of Directors, shall authenticate records of the
Corporation; shall send all notices of meetings out, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
The Treasurer shall have custody of all corporate funds and financial
records, shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of shareholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
SECTION 3. REMOVAL OF OFFICERS. Any officer or agent elected or appointed
by the Board of Directors may be removed by the Board at any time with or
without cause.
Removal of any officer shall be without prejudice to the contract rights,
if any, of the person so removed; however, election or appointment of an officer
or agent shall not of itself create contract rights.
SECTION 4. RESIGNATION OF OFFICERS. An officer may resign at any time by
delivering notice to the Corporation. A resignation is effective when the notice
is delivered unless the notice specifies a later effective date. If a
resignation is made effective at a later date and the Corporation accepts the
future effective date, the Board of Directors may fill the pending vacancy
before the effective date if the Board of Directors provides that the successor
does not take office until the effective date.
ARTICLE IV
STOCK CERTIFICATES
SECTION 1. ISSUANCE. Every holder of shares in this Corporation shall be
entitled to have a certificate, representing all shares to which he is entitled.
The Board of Directors may authorize shares to be issued for consideration
consisting of any tangible or intangible property or benefit to the Corporation,
including cash, promissory notes, services performed, promises to perform
services evidenced by a written contract, or other securities of the
Corporation.
Before the Corporation issues shares, the Board of Directors must determine
that the consideration received for shares to be issued is adequate. The
determination by the Board of Directors is conclusive insofar as the adequacy of
consideration for the issuance of shares relates to whether the shares are
validly issued, fully paid and nonassessable. When it cannot be determined that
outstanding shares are fully paid and nonassessable, there shall be a conclusive
presumption that such shares are fully paid and nonassessable if the Board of
Directors makes a good faith determination that there is no substantial evidence
that the full consideration for such shares has not been paid.
When the Corporation receives the consideration for which the Board of
Directors authorized the issuance of shares, the shares issued therefor are
fully paid and nonassessable. Consideration in the form of a promise to pay
money or a promise to perform services is received by the Corporation at the
time of the making of the promise, unless the agreement specifically provides
otherwise.
SECTION 2. FORM. Certificates representing shares in this Corporation shall
be signed by the Chief Executive Officer or by the President or any vice
president and the Secretary or an assistant secretary and may be sealed with the
seal of this Corporation or a facsimile thereof. The signatures of the Chief
Executive Officer or the President or any Vice President and the Secretary or an
Assistant Secretary may be facsimiles if the certificate is manually signed on
behalf of a transfer agent or a registrar, other than the Corporation itself or
an employee of the Corporation. In case any officer who signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer at the date of its
issuance.
If this Corporation is authorized to issue shares of more than one class or
more than one series of any class, every certificate representing shares issued
by this Corporation shall set forth or fairly summarize upon the face or back of
the certificate, or shall state that the Corporation will furnish to any
shareholder upon request and without charge a full statement of, the
designations, preferences, limitations and relative rights of the shares of each
class or series authorized to be issued, and the variations in the relative
rights and preferences between the shares of each series so far as the same have
been fixed and determined, and the authority of the Board of Directors to fix
and determine the relative rights and preferences of subsequent series.
Every certificate representing shares which are restricted as to the sale,
disposition or other transfer of such shares shall state that such shares are
restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the Corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face thereof: the
name of the Corporation; that the Corporation is organized under the laws of the
State of Delaware; the name of the person or persons to whom issued; the number
and class of shares; and the designation of the series, if any, which such
certificate represents.
SECTION 3. TRANSFER OF STOCK. Transfer of shares of the Corporation shall
be made only on the stock transfer books of the Corporation by the holder of
record thereof or by his legal representative, who shall furnish proper evidence
of authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation, and on
surrender for cancellation of the certificate of such shares. The person in
whose name shares stand on the books of the Corporation shall be deemed by the
Corporation to be the owner thereof for all purposes.
SECTION 4. LOST, STOLEN, OR DESTROYED CERTIFICATES. The Corporation shall
issue a new stock certificate in the place of any certificate previously issued
if the holder of record of the certificate (a) makes proof in affidavit form
that it has been lost, destroyed or wrongfully taken; (b) requests the issue of
a new certificate before the Corporation has notice that the certificate has
been acquired by a purchaser for value in good faith and without notice of any
adverse claim; (c) gives bond in such form as the Corporation may direct to
indemnify the Corporation, the transfer agent and registrar against any claim
that may be made on account of the alleged loss, destruction or theft of a
certificate; and (d) satisfies any other reasonable requirements imposed by the
Corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the Corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the Board of Directors. Such authority may be general or
confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by such officer or officers, agent or agents, of
the Corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE VI
BOOKS AND RECORDS
SECTION 1. BOOKS AND RECORDS. The Corporation shall keep as permanent
records, in accordance with applicable law, minutes of all meetings of its
shareholders and Board of Directors, a record of all actions taken by the
shareholders or Board of Directors without a meeting, a record of all actions
taken by a committee of the Board of Directors in place of the Board of
Directors on behalf of the Corporation, and such books or records and accounts
as may be necessary for the proper conduct of the business of the Corporation.
SECTION 2. INSPECTION OF BOOKS AND RECORDS. The Board of Directors and,
unless otherwise specified by the Board, the Chairman of the Board, the Chief
Executive Officer or the President shall, subject to applicable law, have the
sole power to determine from time to time whether and to what extent and at what
times and places and under what conditions and regulations the accounts, books
and records of the Corporation, or any of them, shall be open to the inspection
of the shareholders; and, except as specifically conferred by law, no
shareholder shall have any right to inspect any account, book, record or
document of the Corporation, unless and until authorized to do so by the Board
or, unless otherwise specified by the Board, by order of the Chairman of the
Board or by the Chief Executive Officer or the President.
ARTICLE VII
DISTRIBUTIONS, SHARE DIVIDENDS AND SHARE OPTIONS
SECTION 1. DISTRIBUTIONS. The Board of Directors of this Corporation may,
from time to time, authorize and the Corporation may pay distributions to the
shareholders. A distribution is a direct or indirect transfer of money or other
property (except the Corporation's own shares) or incurrence of indebtedness by
the Corporation to or for the benefit of the shareholders in respect of any of
its shares. A distribution may be in the form of a declaration or payment of a
dividend; a purchase, redemption, or other acquisition of shares; a distribution
of indebtedness; or otherwise.
No distribution may be made if, after giving it effect:
(a) the Corporation would not be able to pay its debts as they become due
in the usual course of business; or
(b) the Corporation's total assets would be less than the sum of its total
liabilities plus the amount that would be needed, if the Corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
receiving the distribution.
If the Board of Directors does not fix the record date for determining
shareholders entitled to a distribution (other than one involving a purchase,
redemption, or other acquisition of the Corporation's shares), it is the date
the Board of Directors authorizes the distribution.
The Board of Directors may base a determination that a distribution is not
prohibited either on financial statements prepared on the basis of accounting
practices and principles that are reasonable in the circumstances or on a fair
valuation or other method that is reasonable in the circumstances. In the case
of any distribution based upon such a valuation, each such distribution shall be
identified as a distribution based upon a current valuation of assets, and the
amount per share paid on the basis of such valuation shall be disclosed to the
shareholders concurrent with their receipt of the distribution.
SECTION 2. SHARE DIVIDENDS. Unless the Restated Certificate of
Incorporation provides otherwise, shares may be issued pro rata and without
consideration to the Corporation's shareholders or to the shareholders of one or
more classes or series. An issuance of shares under this section is a share
dividend.
Shares of one class or series may not be issued as a share dividend in
respect of shares of another class or series unless:
(a) the Restated Certificate of Incorporation so authorizes;
(b) a majority of the votes entitled to be cast by the class or series to
be issued approves the issue; or
(c) there are no outstanding shares of the class or series to be issued.
If the Board of Directors does not fix the record date for determining
shareholders entitled to a share dividend, it is the date the Board of Directors
authorizes the share dividend.
SECTION 3. SHARE OPTIONS. Unless the Restated Certificate of Incorporation
provides otherwise, the Corporation may issue rights, options or warrants for
the purchase of its shares. The Board of Directors shall determine the terms
upon which the rights, options or warrants are issued, their form and content,
and the consideration for which the shares are to be issued.
The terms and conditions of stock rights and options which are created and
issued by the Corporation, or its successor, and which entitle the holders
thereof to purchase from the Corporation shares of any class or classes, whether
authorized but unissued shares, treasury shares or shares to be purchased or
acquired by the Corporation, may include restrictions or conditions that
preclude or limit the exercise, transfer, receipt or holding of such rights or
options by any person or persons, including any person or persons owning or
offering to acquire a specified number or percentage of the outstanding common
shares or other securities of the Corporation, or any transferee or transferees
of any such person or persons, or that invalidate or void such rights or options
held by any such person or persons or any such transferee or transferees.
ARTICLE VIII
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall have
inscribed thereon the name of the Corporation and such other words and figures
and in such design as may be prescribed by the Board of Directors, and may be
facsimile, engraved, printed or an impression, or other type seal.
ARTICLE IX
FISCAL YEAR
The fiscal year of the Corporation shall, by resolution, be determined by
the Board of Directors.
ARTICLE X
INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS
SECTION 1. ACTION AGAINST PARTY BECAUSE OF CORPORATE POSITION. The
Corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, partner, officer,
employee or agent of another Corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees inclusive of any
appeal), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such claim, action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
unlawful. The termination of any claim, action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of NOLO CONTENDERE or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
SECTION 2. ACTION BY OR IN THE RIGHT OF CORPORATION. The Corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed claim, action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, partner, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees inclusive of any
appeal) actually and reasonably incurred by him in connection with the defense
or settlement of such claim, action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Corporation and except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that a court of competent jurisdiction
(the "Court") in which such claim, action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court shall deem proper.
SECTION 3. REIMBURSEMENT IF SUCCESSFUL. To the extent that a director,
officer, employee or agent of the Corporation has been successful on the merits
or otherwise in defense of any claim, action, suit or proceeding referred to in
Sections 1 or 2 of this Article X, or in defense of any claims, issue or matter
therein, he shall be indemnified against expenses (including attorneys fees
inclusive of any appeal) actually and reasonably incurred by him in connection
therewith, notwithstanding that he has not been successful (on the merits or
otherwise) on any other claim, issue or matter in any such claim, action, suit
or proceeding.
SECTION 4. AUTHORIZATION. Any indemnification under Sections 1 and 2 of
this Article X (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in Sections 1 and 2.
Such determination shall be made (a) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (b) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (c) by the shareholders.
SECTION 5. ADVANCED REIMBURSEMENT. Expenses incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Article.
SECTION 6. INDEMNIFICATION NOT EXCLUSIVE. The indemnification provided by
this Article shall be deemed exclusive of any other rights to which those
indemnified may be entitled under any statute, rule of law, provision of the
Restated Certificate of Incorporation, by-law, agreement, vote of shareholders
or disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity, while holding such office, and
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person. Where such other provision provides broader
rights of indemnification than these by-laws, said other provision shall
control.
SECTION 7. INSURANCE. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, partner, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the provisions of this
Article.
ARTICLE XI
AMENDMENT
Except as otherwise provided herein, these By-laws may be altered, amended
or repealed or new by-laws may be adopted by the shareholders or by the Board of
Directors at any regular meeting of the shareholders or of the Board of
Directors or at any special meeting of the shareholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
by-laws be contained in the notice of such special meeting; PROVIDED, HOWEVER,
that in the case of amendments by shareholders, notwithstanding any other
provisions of these Bylaws or any other provision of law which might otherwise
permit a lesser vote or no vote, but in addition to any affirmative vote of the
holders of any particular class or series of the capital stock required by law,
the Restated Certificate of Incorporation or these By-laws, the affirmative vote
of the holders of at least 66 2/3% of all then outstanding shares of voting
stock of the Corporation, voting together as a single class, shall be required
to alter, amend or repeal any provision of these By-laws.
ARTICLE XII
EMERGENCY BY-LAWS
SECTION 1. EMERGENCY BY-LAWS. The Board of Directors may adopt by-laws to
be effective only in an emergency. An emergency exists for the purposes of this
section if a quorum of the Corporation's directors cannot readily be assembled
because of some catastrophic event. The emergency by-laws, which are subject to
amendment or repeal by the shareholders, may make all provisions necessary for
managing the Corporation during an emergency, including:
(a) procedures for calling a meeting of the Board of Directors;
(b) quorum requirements for the meeting; and
(c) designation of additional or substitute directors.
SECTION 2. LINE OF SUCCESSION. The Board of Directors, either before or
during such emergency, may provide, and from time to time modify, lines of
succession in the event that during such emergency any or all officers or agents
of the Corporation are for any reason rendered incapable of discharging their
duties.
SECTION 3. GOVERNING BY-LAWS. All provisions of these By-laws consistent
with the emergency by-laws remain effective during the emergency. The emergency
by-laws are not effective after the emergency ends.
SECTION 4. EFFECT OF CORPORATE ACTION. Corporate action taken in good faith
in accordance with the emergency by-laws;
(a) binds the Corporation; and
(b) may not be used to impose liability on a corporate director, officer,
employee or agent.
Exhibit T3B-2
FOURTH AMENDED AND RESTATED BY-LAWS
OF
PLANET HOLLYWOOD INTERNATIONAL, INC.
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders of
this Corporation for the election of directors and for the transaction of any
proper business shall be held at the time and place designated by the Board of
Directors (the "Board") of the Corporation.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders
shall be held when called by the Chief Executive Officer or by a majority of the
Board of Directors. Special meetings may not be called by any other person.
Written notice of a special meeting pursuant to Section 4 herein shall be given
to all shareholders entitled to vote at such meeting not less than 10 nor more
than 60 days before the date of the meeting. Each such special meeting shall be
held at such date and time as requested by the person or persons calling the
meeting within the limits fixed by law. Business transacted at any special
meeting of shareholders shall be limited to the purposes stated in the notice.
SECTION 3. PLACE. Meetings of shareholders may be held in the State of
Delaware or outside the State of Delaware.
SECTION 4. NOTICE. Written notice stating the place, date and time of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than 10 nor more than
60 days before the meeting, either personally or by first class mail, by or at
the direction of the Chief Executive Officer, the Secretary, or the officer or
persons calling the meeting to each shareholder of record entitled to vote at
such meeting. If mailed, such notice shall be effective when deposited in the
United States mail addressed to the shareholder at his address as it appears on
the Corporation's current record of shareholders.
SECTION 5. NOTICE OF ADJOURNED MEETINGS. When a meeting is adjourned
to another time or place, it shall not be necessary to give any notice of the
adjourned meeting if the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken, and at the adjourned
meeting any business may be transacted that might have been transacted on the
original date of the meeting. If, however, the adjournment is for more than 30
days, or if, after the adjournment, the Board of Directors fixes a new record
date for the adjourned meeting, a notice of the adjourned meeting shall be given
as provided in Section 4 herein to each shareholder of record on the new record
date entitled to vote at such meeting.
SECTION 6. NOTICE OF SHAREHOLDER BUSINESS AND NOMINATIONS. Except as
may otherwise be provided herein, or in the Amended and Restated Certificate of
Incorporation in connection with rights to elect directors under specified
circumstances which may be granted to the holders of any series of Preferred
Stock, nominations for the election of directors and the proposal of business to
be considered by the shareholders may be made by the Board or any shareholder of
record entitled to vote at the meeting and who complies with the notice
procedures set forth in this by-law.
For nominations or other business to be properly brought before an
annual meeting by a shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation and such other business
must otherwise be a proper matter for shareholder action. Except as otherwise
provided by applicable law, to be timely, a shareholder's notice must be
delivered to the Secretary of the Corporation at the Corporation's principal
executive offices not later than the close of business on the 60th day, nor
earlier than the close of business on the 90th day, prior to the first
anniversary of the preceding year's annual meeting; PROVIDED, HOWEVER, that in
the event that the date of the annual meeting is more than 30 days before or 60
days after such anniversary date, notice by the shareholder must be so delivered
not earlier than the close of business on the later of the 60th day prior to
such meeting or the 10th day following the day on which public announcement of
the date of such meeting is made by the Corporation. In no event shall public
announcement of an adjournment of an annual meeting commence a new time period
for giving of a shareholder's notice as described above.
Such shareholder's notice shall set forth (a) as to each person whom
the shareholder proposes to nominate for election to the Board of Directors, all
information relating to such person required to be disclosed in solicitation of
proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934 (including such person's written consent to
being named in the proxy statements as a nominee and to serving as a director if
elected); (b) as to any other business that the shareholder proposes to bring
before the meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting and
any material interest in such business of such shareholder and the beneficial
owner, if any, on whose behalf the nomination or proposal is made; and (c) as to
the shareholder giving notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made (i) the name and address of such shareholder,
as they appear on the Corporation's books, and of such beneficial owner and (ii)
the class and number of shares of the Corporation which are owned beneficially
and of record by such shareholder and beneficial owner. Notice of nominations
which are proposed by the Board shall be given by the Chairman, the Chief
Executive Officer, the President or the Secretary of the Corporation on behalf
of the Board.
The chairperson of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he or she should so determine, he or she shall so
declare to the meeting and the defective nomination shall be disregarded.
SECTION 7. FIXING RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any distribution, or
in order to make a determination of shareholders for any other purpose, the
Board of Directors may fix in advance a date as the record date for any
determination of shareholders, such date in any case to be not more than 60 days
and, in case of a meeting of shareholders, not less than 10 days prior to the
date on which the particular action requiring such determination of shareholders
is to be taken.
If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at an annual
or special meeting of shareholders, or shareholders entitled to receive payment
of a distribution, the date on which notice of the meeting is mailed or the date
on which the resolution of the Board of Directors declaring such distribution is
adopted, as the case may be, shall be the record date for such determination of
shareholders.
When a determination of shareholders entitled to vote at any meeting
of shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof, unless the Board of Directors fixes a
new record date for the adjourned meeting. A new record date must be fixed if
the meeting is adjourned to a date more than 120 days after the date fixed for
the original meeting.
SECTION 8. VOTING RECORD. The officers or agent having charge of the
stock transfer books for shares of the Corporation shall make, at least 10 days
before each meeting of shareholders, a complete alphabetical list of the
shareholders entitled to vote at such meeting or any adjournment thereof,
arranged by voting group with the address of and the number and class and
series, if any, of shares held by each. The list, for a period of 10 days prior
to such meeting, shall be available for inspection at the principal office of
the Corporation, or at the office of the transfer agent or registrar of the
Corporation or at a place identified in the meeting notice in the city where the
meeting will be held. Upon written demand to the Corporation, any shareholder or
his agent or attorney shall be entitled to inspect the list at any time during
usual business hours. The list shall also be produced and kept open at the time
and place of the meeting and shall be subject to the inspection of any
shareholder or his agent or attorney at any time during the meeting.
If the requirements of this section have not been substantially
complied with, the meeting, on demand of any shareholder in person or by proxy,
shall be adjourned until the requirements are complied with. If no such demand
is made, failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
SECTION 9. SHAREHOLDER QUORUM AND VOTING. A majority of all then
outstanding shares of voting stock entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders. When a specified
item of business is required to be voted on by a class or series of stock, a
majority of the shares of such class or series shall constitute a quorum for the
transaction of such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law or by the
Amended and Restated Certificate of Incorporation.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of
shareholders entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof.
SECTION 10. VOTING OF SHARES. Except as otherwise provided in the
Amended and Restated Certificate of Incorporation, each outstanding share of
Common Stock shall be entitled to one vote on each matter submitted to a vote at
a meeting of shareholders.
Shares of stock of this Corporation owned directly or indirectly by
another corporation the majority of the voting stock of which is owned, directly
or indirectly, by this Corporation are not entitled to vote, and shall not be
counted in determining the total number of outstanding shares at any given time.
A shareholder or the shareholder's attorney in fact may vote either in
person or by proxy executed in writing by the shareholder or his duly authorized
attorney-in-fact.
At each election for directors every shareholder entitled to vote at
such election shall have the right to vote, in person or by proxy, the number of
votes represented by the shares owned by him for as many persons as there are
directors to be elected at that time and for whose election he has a right to
vote.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the by-laws
of the corporate shareholder; or, in the absence of any applicable by-law, by
such person as the board of directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the by-laws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the Chairman of the Board, Chief Executive officer,
President, any Vice President, Secretary and Treasurer of the corporate
shareholder shall be presumed to possess, in that order, authority to vote such
shares.
Shares held by an administrator, executor, guardian, personal
representative, or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name or the name of his nominee.
Shares held by or under the control of a receiver, trustee in
bankruptcy proceedings or an assignee for the benefit of creditors, may be voted
by such receiver, trustee or assignee, without the transfer thereof into the
name of such receiver, trustee or assignee.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee or his nominee shall be entitled to vote the shares so
transferred.
On and after the date on which written notice of redemption of
redeemable shares has been mailed to the holders thereof and a sum sufficient to
redeem such shares has been deposited with a bank, trust company or other
financial institution, with irrevocable instruction and authority to pay the
redemption price to the holders thereof upon surrender of certificates therefor,
such shares shall not be entitled to vote on any matter and shall not be deemed
to be outstanding shares.
SECTION 11. WRITTEN CONSENT OF SHAREHOLDERS. Any action required or
permitted to be taken by the shareholders of the Corporation must be effected at
a duly called annual or special meeting of the shareholders, unless such action
is approved by a majority of the Board of Directors. In the event of such
approval, such action may be taken without a meeting, without prior notice and
without a vote if a consent in writing, setting forth the action so taken, shall
be signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting of shareholders at which all shares entitled to vote thereon were
present and voted, provided that all requirements of law and the Amended and
Restated Certificate of Incorporation have been satisfied. To be effective, the
executed written consent of the shareholders must be delivered to the
Corporation within 60 days of the date the earliest written consent is received
by the Corporation. If any class of shares is entitled to vote thereon as a
class, such written consent shall be required of the holders of a majority of
the shares of each class of shares entitled to vote thereon.
After obtaining such authorization by written consent, notice shall
promptly be given to those shareholders who have not consented in writing or who
are not entitled to vote on the action. The notice shall fairly summarize the
material features of the authorized action and, if the action be a merger,
consolidation or sale or exchange of assets for which dissenters rights are
provided by law, the notice shall contain a clear statement of the right of
shareholders dissenting therefrom to be paid the fair value of their shares upon
compliance with further provisions of the law regarding the rights of dissenting
shareholders.
SECTION 12. WAIVER OF NOTICE OF MEETINGS OF SHAREHOLDERS. Notice of a
meeting of the shareholders need not be given to any shareholder who signs a
Waiver of Notice either before or after the meeting. Attendance of a shareholder
at a meeting shall constitute a waiver of notice of such meeting and waiver of
any and all objections to the place of the meeting, the time of the meeting, the
manner in which it has been called or convened, or the matters considered at a
meeting except when a shareholder states, at the beginning of the meeting, any
objection to the transaction of business because the meeting is not lawfully
called or convened, or except when a shareholder objects to considering a
particular matter that is not within the purposes described in the meeting
notice.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the shareholders need be specified in any written
Waiver of Notice of such meeting.
ARTICLE II
DIRECTORS
SECTION 1. FUNCTION. All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the Corporation shall be
managed under the direction of, the Board of Directors.
SECTION 2. QUALIFICATION. Directors must be natural persons who are 18
years of age or older, but need not be residents of the State of Delaware,
citizens of the United States of America or shareholders of this Corporation.
SECTION 3. COMPENSATION. The Board of Directors shall have authority
to fix the compensation of directors.
SECTION 4. DUTIES OF DIRECTORS. A director shall perform his duties as
a director, including his duties as a member of any committee of the board upon
which he may serve, in good faith, in a manner he reasonably believes to be in
the best interests of the Corporation, and with such care as an ordinarily
prudent person in a like position would use under similar circumstances.
In performing his duties, a director shall be entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, in each case prepared or presented by:
(a) one or more officers or employees of the Corporation whom the
director reasonably believes to be reliable and competent in the matters
presented;
(b) counsel, public accountants or other persons as to matters which
the director reasonably believes to be within such person's professional or
expert competence; or
(c) a committee of the Board upon which he does not serve, duly
designated in accordance with a provision of the Amended and Restated
Certificate of Incorporation or the By-laws, as to matters within its designated
authority, which committee the director reasonably believes to merit confidence.
A director shall not be considered to be acting in good faith if he
has knowledge concerning the matter in question that would cause such reliance
described above to be unwarranted.
In discharging his duties, a director may consider such factors as the
director deems relevant, including the long-term prospects and interests of the
Corporation and its shareholders, and the social, economic, legal, or other
effects of any action on the employees, suppliers, customers of the Corporation
or its subsidiaries, the communities and society in which the Corporation or its
subsidiaries operate, and the economy of the state and the nation.
A person who performs his duties in compliance with this section shall
have no liability by reason of being or having been a director of the
Corporation.
SECTION 5. PRESUMPTION OF ASSENT. A director of the Corporation who is
present at a meeting of its Board of Directors or a committee of the Board of
Directors at which action on any corporate matter is taken shall be presumed to
have assented to the action taken unless (a) he objects at the beginning of the
meeting (or promptly upon his arrival) to holding it or transacting specified
business at the meeting; or (b) he votes against such action or abstains from
voting in respect thereto.
SECTION 6. NUMBER. Except as may otherwise be provided pursuant to the
Amended and Restated Certificate of Incorporation in connection with rights to
elect directors which may be granted to the holders of any series of Preferred
Stock, the number of directors which shall constitute the whole Board shall
initially be seven. The holders of the Corporation's Class B Common Stock may
increase the number of directors constituting the whole Board to up to a total
of eleven. At such time when there shall be no shares of Class B Common Stock
issued and outstanding, the number of directors constituting the whole Board
shall be fixed by the Board of Directors, but shall not be fewer than [five] nor
more than [eleven]. The directors, other than those who may be elected by the
holders of any shares of Preferred Stock under specified circumstances, shall be
divided, with respect to the time for which they severally hold office, into
three classes, designated Class I, Class II and Class III, which shall be nearly
equal in number as is reasonably possible, with the term of office of Class I to
expire at the 2001 annual meeting of shareholders, the term of office of Class
II to expire at the 2002 annual meeting of shareholders and the term of office
of Class III to expire at the 2003 annual meeting of shareholders, with each
director to hold office until his or her successor has been duly elected and
qualified. At each annual meeting of shareholders, commencing with the 2001
annual meeting, directors elected to succeed those directors whose terms shall
expire shall be elected for a term of office to expire at the third succeeding
annual meeting of shareholders after their election, each director to hold
office until his or her successor shall have been duly elected and qualified.
SECTION 7. ELECTION OF DIRECTORS. Except as may otherwise be provided
pursuant to the Amended and Restated Certificate of Incorporation in connection
with the rights to elect directors under specified circumstances which may be
granted to the holders of any series of Preferred Stock, and except as otherwise
provided pursuant to Section 8 of this Article II, directors shall be elected by
the holders of the Corporation's Class B Common Stock; PROVIDED, HOWEVER, that,
in accordance with the Amended and Restated Certificate of Incorporation, (i)
prior to the payment in full of all of the Corporation's obligations under the
Deferred Interest Notes (defined below), two of the directors shall be
individuals designated by the Trustee under the Deferred Interest Notes
Indenture (the "Noteholder Designees") pursuant to the Voting Agreement (defined
below) and (ii) subsequent to the payment in full of all obligations under the
Deferred Interest Notes, the holders of the Corporation's Class A Common Stock
shall be entitled to elect two directors (the "Class A Directors"). The
Noteholder Designees elected to the Board in accordance with clause (i) shall be
initially appointed to Class III. At such time when there shall be no shares of
Class B Common Stock issued and outstanding, the holders of Class A Common Stock
shall be entitled to elect all members of the Corporation's Board of Directors.
Except as otherwise provided by applicable law, at each election the persons
receiving the greatest number of votes shall be the persons then elected. Each
director shall serve until his or her successor is elected and qualified or
until his or her death, resignation or removal. The election of directors is
subject to any provisions relating thereto contained in the Amended and Restated
Certificate of Incorporation.
SECTION 8. VACANCIES. Except as may otherwise be provided pursuant to
the Amended and Restated Certificate of Incorporation in connection with rights
to elect additional directors under specified circumstances which may be granted
to the holders of any series of Preferred Stock, newly created directorships
resulting from any increase in the number of directors, or any vacancies on the
Board of Directors resulting from death, resignation, removal or other causes,
shall be filled in the following manner: (i) vacancies in Class A directorships
shall be filled by the holders of the issued and outstanding shares of Class A
Common Stock voting separately as a single class; (ii) vacancies in Class B
directorships shall be filled by the holders of the issued and outstanding
shares of Class B Common Stock voting separately as a single class; and (iii)
vacancies in the Noteholder Designee directorships shall be filled by
individuals designated by the Trustee under the Deferred Interest Notes
Indenture pursuant to the Voting Agreement. Any director elected in accordance
with the preceding sentence shall hold office until such director's successor
shall have been elected and qualified or until such director's death,
resignation or removal, whichever first occurs. No decrease in the number of
directors constituting the Board shall shorten the term of any incumbent
director.
SECTION 9. RESIGNATION OF DIRECTORS. Any director of the Corporation
may resign at any time by giving written notice to the Chairman of the Board,
Chief Executive Officer, President or to the Secretary of the Corporation. The
resignation of any director shall take effect at the time specified therein;
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 10. REMOVAL OF DIRECTORS. Subject to the right to elect
directors under specified circumstances which may be granted pursuant to the
Amended and Restated Certificate of Incorporation to the holders of any series
of Preferred Stock and unless otherwise provided by law, any director may be
removed from office with or without cause only by the vote of the holders of the
class of voting stock entitled to elect such director, voting together as a
single class and holding not less than a majority of the issued and outstanding
shares of such class of voting stock; PROVIDED, HOWEVER, that the Noteholder
Designees may not be so removed without the prior written consent of the Trustee
under the Deferred Interest Notes Indenture. At such time when there shall be no
shares of Class B Common Stock issued and outstanding, directors elected by the
holders of Class A Common Stock may be removed only with cause by a vote of the
holders of not less than a majority of the issued and outstanding shares of
Class A Common Stock.
SECTION 11. QUORUM AND VOTING. A majority of the number of directors
fixed by these By-laws shall constitute a quorum for the transaction of
business. Subject to the provisions of Section 12 of Article II of these
By-laws, the act of the majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors.
SECTION 12. SUPERMAJORITY VOTING REQUIREMENTS. Notwithstanding any
provision in these By-laws to the contrary, for as long as shares of Class B
Common Stock are outstanding, the affirmative vote of at a majority of the
members of the Board of Directors including at least one Class A Director or
Noteholder Director (a "Supermajority Vote") shall be required to authorize the
taking of any of the following actions on the part of the Corporation:
(a) entering into any contract or other transaction (or series or
related contracts or transactions) with any stockholder, director or beneficial
owner of five percent (5%) or more of the capital stock of the Corporation;
(b) entering into any contract or other transaction (or series of
related contracts or transactions) with any officer of the Corporation
inconsistent with prior practice and involving more than $350,000;
(c) engaging in or committing to engage in the acquisition by the
Corporation or any subsidiary thereof of a majority of the assets or capital
stock of another entity as an entirety;
(d) merging or consolidating the Corporation or any subsidiary thereof
with and/or into another entity, or selling all or substantially all of the
assets of the Corporation or any subsidiary thereof as an entirety; and
(e) authorizing or approving any amendment to the Amended and Restated
Certificate of Incorporation of the Corporation or any amendment by the Board of
Directors to the By-laws of the Corporation.
SECTION 13. DIRECTOR CONFLICTS OF INTEREST. No contract or other
transaction between this Corporation and one or more of its directors or any
other corporation, firm, association or entity in which one or more of the
directors are directors or officers or are financially interested, shall be
either void or voidable because of such relationship or interest or because such
director or directors are present at the meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or because his or their votes are counted for such purpose, if:
(a) the fact of such relationship or interest is disclosed or known to
the Board of Directors or committee which authorizes, approves or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors; or
(b) the fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(c) the contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized by the Board, a committee or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors of a committee
thereof which authorizes, approves or ratifies such contract or transaction.
SECTION 14. EXECUTIVE AND OTHER COMMITTEES. The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an executive committee and one or more other committees
each of which, to the extent provided in such resolution, shall have and may
exercise all the authority of the Board of Directors, except that no committee
shall have the authority to:
(a) approve or recommend to shareholders actions or proposals required
by law to be approved by shareholders;
(b) designate candidates for the office of director, for purposes of
proxy solicitation or otherwise;
(c) fill vacancies on the Board of Directors or any committee thereof;
(d) adopt, amend or repeal these By-laws or the Amended and Restated
Certificate of Incorporation;
(e) authorize or approve the reacquisition of shares unless pursuant
to a general formula or method specified by the Board of Directors;
(f) adopt an agreement of merger or consolidation; or
(g) authorize or approve the issuance or sale of, or any contract to
issue or sell, shares or designate the terms of a series of a class of shares,
except that the Board of Directors, having acted regarding general authorization
for the issuance or sale of shares, or any contract therefor, and, in the case
of a series, the designation thereof, may, pursuant to a general formula or
method specified by the Board of Directors, by resolution or by adoption of a
stock option or other plan, authorize a committee to fix the terms of any
contract for the sale of the shares and to fix the terms upon which such shares
may be issued or sold, including the price, the rate or manner of payment of
dividends, provisions for redemption, sinking fund, conversion, voting or
preferential rights, and provisions for other features of a class of shares, or
a series of a class of shares, with full power in such committee to adopt any
final resolution setting forth all the terms thereof and to authorize the
statement of the terms of a series for filing with the office of the Secretary
of State.
The Board of Directors, by resolution adopted in accordance with this
section, may designate one or more directors as alternate members of any such
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee.
SECTION 15. CHANGES IN COMMITTEES; RESIGNATIONS, REMOVALS AND
VACANCIES. The Board of Directors shall have power at any time to change or
remove the members of, to fill vacancies in, and to discharge any committee
created pursuant to these By-laws, either with or without cause. Any member of
any such committee may resign at any time by giving written notice to the Board
or the Chairman of the Board or the Secretary. Such resignation shall take
effect upon receipt of such notice or at any later time specified therein; and,
unless otherwise specified therein, acceptance of such resignation shall not be
necessary to make it effective. Any vacancy in any committee, whether arising
from death, resignation, an increase in the number of committee members or any
other cause, shall be filled by the Board of Directors in the manner prescribed
in these By-laws for the original appointment of the members of such committee.
SECTION 16. PLACE OF MEETINGS. Regular and special meetings by the
Board of Directors may be held within or without the State of Delaware.
SECTION 17. TIME, NOTICE AND CALL OF MEETINGS. Regular meetings of the
Board of Directors shall be held at times and places specified by the Board of
Directors without notice of the date, time, place or purpose of the meeting.
Written notice of the date, time and place of special meetings of the Board of
Directors shall be given to each director at least 2 days before the meeting.
The notice need not describe the purpose of the special meeting. In addition to
any other regular meetings, a regular meeting of the Board of Directors shall be
held, without other notice than this by-law, immediately after and at the same
place as the annual meeting of shareholders.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
Meetings of the Board of Directors may be called by the Chairman of
the Board, by the Chief Executive Officer, by the President of the Corporation,
or by any two directors.
Members of the Board of Directors may participate in a meeting of such
board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
SECTION 18. ACTION WITHOUT A MEETING. Any action required to be taken
at a meeting of the directors of the Corporation, or any action which may be
taken at a meeting of the directors or a committee thereof, may be taken without
a meeting if a consent in writing, setting forth the action to be taken, signed
by all of the directors, or all the members of the committee, as the case may
be, is filed in the minutes of the proceedings of the Board or of the committee.
Such consent shall have the same effect as a unanimous vote and may be described
as such in any document.
SECTION 19. ADVISORY DIRECTORS. The Board of Directors shall have the
authority to elect a board of outside directors consisting of two members
initially which number can be increased or decreased by a vote of the
shareholders. The outside directors shall not be shareholders or officers of the
Corporation, and shall not have voting powers, but rather are to act in the
capacity of consulting and advising the Board of Directors at their invitation.
ARTICLE III
OFFICERS
SECTION 1. OFFICERS. The officers of this Corporation shall consist of
a Chairman of the Board, a Chief Executive Officer, a President, a Secretary and
a Treasurer, each of whom shall be elected by the Board of Directors, and shall
serve until their successors are chosen and qualify. Such other officers and
assistant officers and agents as may be deemed necessary may be elected or
appointed by the Board of Directors from time to time.
Any two or more offices may be held by the same person. The failure to
elect a President, Chairman of the Board, Secretary or Treasurer shall not
affect the existence of this Corporation.
SECTION 2. DUTIES. The officers of this Corporation shall have the
following duties:
The Chief Executive Officer of the Corporation shall have overall
responsibility for the Corporation, subject to the directions of the Board of
Directors, and shall preside at all meetings of the shareholders and, unless the
Chairman of the Board of Directors has been elected and is present, shall
preside at all meetings of the Board of Directors.
The President and Chief Operating Officer shall report to the Chief
Executive Officer and the Board of Directors and shall be responsible for the
general and active management of the business, operations and affairs of the
Corporation, subject to the direction of the Chief Executive Officer.
The Chairman of the Board of Directors shall preside at all meetings
of the Board of Directors.
The Secretary shall have custody of, and maintain, all the corporate
records except the financial records, shall have the authority to execute any
and all documents in connection with intellectual property matters, including,
but not limited to, Powers of Attorney, Appointment of Resident Agent forms and
any other documents which are required in connection with the intellectual
property matters of the Corporation, shall prepare the minutes of all meetings
of the shareholders and Board of Directors, shall authenticate records of the
Corporation; shall send all notices of meetings out, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
The Treasurer shall have custody of all corporate funds and financial
records, shall keep full and accurate accounts of receipts and disbursements and
render accounts thereof at the annual meetings of shareholders and whenever else
required by the Board of Directors or the President, and shall perform such
other duties as may be prescribed by the Board of Directors or the President.
SECTION 3. REMOVAL OF OFFICERS. Any officer or agent elected or
appointed by the Board of Directors may be removed by the Board at any time with
or without cause.
Removal of any officer shall be without prejudice to the contract
rights, if any, of the person so removed; however, election or appointment of an
officer or agent shall not of itself create contract rights.
SECTION 4. RESIGNATION OF OFFICERS. An officer may resign at any time
by delivering notice to the Corporation. A resignation is effective when the
notice is delivered unless the notice specifies a later effective date. If a
resignation is made effective at a later date and the Corporation accepts the
future effective date, the Board of Directors may fill the pending vacancy
before the effective date if the Board of Directors provides that the successor
does not take office until the effective date.
ARTICLE IV
STOCK CERTIFICATES
SECTION 1. ISSUANCE. Every holder of shares in this Corporation shall
be entitled to have a certificate, representing all shares to which he is
entitled. The Board of Directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or benefit to
the Corporation, including cash, promissory notes, services performed, promises
to perform services evidenced by a written contract, or other securities of the
Corporation.
Before the Corporation issues shares, the Board of Directors must
determine that the consideration received for shares to be issued is adequate.
The determination by the Board of Directors is conclusive insofar as the
adequacy of consideration for the issuance of shares relates to whether the
shares are validly issued, fully paid and nonassessable. When it cannot be
determined that outstanding shares are fully paid and nonassessable, there shall
be a conclusive presumption that such shares are fully paid and nonassessable if
the Board of Directors makes a good faith determination that there is no
substantial evidence that the full consideration for such shares has not been
paid.
When the Corporation receives the consideration for which the Board of
Directors authorized the issuance of shares, the shares issued therefor are
fully paid and nonassessable. Consideration in the form of a promise to pay
money or a promise to perform services is received by the Corporation at the
time of the making of the promise, unless the agreement specifically provides
otherwise.
SECTION 2. FORM. Certificates representing shares in this Corporation
shall be signed by the Chief Executive Officer or by the President or any vice
president and the Secretary or an assistant secretary and may be sealed with the
seal of this Corporation or a facsimile thereof. The signatures of the Chief
Executive Officer or the President or any Vice President and the Secretary or an
Assistant Secretary may be facsimiles if the certificate is manually signed on
behalf of a transfer agent or a registrar, other than the Corporation itself or
an employee of the Corporation. In case any officer who signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer at the date of its
issuance.
If this Corporation is authorized to issue shares of more than one
class or more than one series of any class, every certificate representing
shares issued by this Corporation shall set forth or fairly summarize upon the
face or back of the certificate, or shall state that the Corporation will
furnish to any shareholder upon request and without charge a full statement of,
the designations, preferences, limitations and relative rights of the shares of
each class or series authorized to be issued, and the variations in the relative
rights and preferences between the shares of each series so far as the same have
been fixed and determined, and the authority of the Board of Directors to fix
and determine the relative rights and preferences of subsequent series.
Every certificate representing shares which are restricted as to the
sale, disposition or other transfer of such shares shall state that such shares
are restricted as to transfer and shall set forth or fairly summarize upon the
certificate, or shall state that the Corporation will furnish to any shareholder
upon request and without charge a full statement of, such restrictions.
Each certificate representing shares shall state upon the face
thereof: the name of the Corporation; that the Corporation is organized under
the laws of the State of Delaware; the name of the person or persons to whom
issued; the number and class of shares; and the designation of the series, if
any, which such certificate represents.
SECTION 3. TRANSFER OF STOCK. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the Corporation,
and on surrender for cancellation of the certificate of such shares. The person
in whose name shares stand on the books of the Corporation shall be deemed by
the Corporation to be the owner thereof for all purposes.
SECTION 4. LOST, STOLEN, OR DESTROYED CERTIFICATES. The Corporation
shall issue a new stock certificate in the place of any certificate previously
issued if the holder of record of the certificate (a) makes proof in affidavit
form that it has been lost, destroyed or wrongfully taken; (b) requests the
issue of a new certificate before the Corporation has notice that the
certificate has been acquired by a purchaser for value in good faith and without
notice of any adverse claim; (c) gives bond in such form as the Corporation may
direct to indemnify the Corporation, the transfer agent and registrar against
any claim that may be made on account of the alleged loss, destruction or theft
of a certificate; and (d) satisfies any other reasonable requirements imposed by
the Corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation shall be signed by such officer or officers, agent or
agents, of the Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VI
BOOKS AND RECORDS
SECTION 1. BOOKS AND RECORDS. The Corporation shall keep as permanent
records, in accordance with applicable law, minutes of all meetings of its
shareholders and Board of Directors, a record of all actions taken by the
shareholders or Board of Directors without a meeting, a record of all actions
taken by a committee of the Board of Directors in place of the Board of
Directors on behalf of the Corporation, and such books or records and accounts
as may be necessary for the proper conduct of the business of the Corporation.
SECTION 2. INSPECTION OF BOOKS AND RECORDS. The Board of Directors
and, unless otherwise specified by the Board, the Chairman of the Board, the
Chief Executive Officer or the President shall, subject to applicable law, have
the sole power to determine from time to time whether and to what extent and at
what times and places and under what conditions and regulations the accounts,
books and records of the Corporation, or any of them, shall be open to the
inspection of the shareholders; and, except as specifically conferred by law, no
shareholder shall have any right to inspect any account, book, record or
document of the Corporation, unless and until authorized to do so by the Board
or, unless otherwise specified by the Board, by order of the Chairman of the
Board or by the Chief Executive Officer or the President.
ARTICLE VII
DISTRIBUTIONS, SHARE DIVIDENDS AND SHARE OPTIONS
SECTION 1. DISTRIBUTIONS. The Board of Directors of this Corporation
may, from time to time, authorize and the Corporation may pay distributions to
the shareholders. A distribution is a direct or indirect transfer of money or
other property (except the Corporation's own shares) or incurrence of
indebtedness by the Corporation to or for the benefit of the shareholders in
respect of any of its shares. A distribution may be in the form of a declaration
or payment of a dividend; a purchase, redemption, or other acquisition of
shares; a distribution of indebtedness; or otherwise.
No distribution may be made if, after giving it effect:
(a) the Corporation would not be able to pay its debts as they become
due in the usual course of business; or
(b) the Corporation's total assets would be less than the sum of its
total liabilities plus the amount that would be needed, if the Corporation were
to be dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights are superior
to those receiving the distribution.
If the Board of Directors does not fix the record date for determining
shareholders entitled to a distribution (other than one involving a purchase,
redemption, or other acquisition of the Corporation's shares), it is the date
the Board of Directors authorizes the distribution.
The Board of Directors may base a determination that a distribution is
not prohibited either on financial statements prepared on the basis of
accounting practices and principles that are reasonable in the circumstances or
on a fair valuation or other method that is reasonable in the circumstances. In
the case of any distribution based upon such a valuation, each such distribution
shall be identified as a distribution based upon a current valuation of assets,
and the amount per share paid on the basis of such valuation shall be disclosed
to the shareholders concurrent with their receipt of the distribution.
SECTION 2. SHARE DIVIDENDS. Unless the Amended and Restated
Certificate of Incorporation provides otherwise, shares may be issued pro rata
and without consideration to the Corporation's shareholders or to the
shareholders of one or more classes or series. An issuance of shares under this
section is a share dividend.
Shares of one class or series may not be issued as a share dividend in
respect of shares of another class or series unless:
(a) the Amended and Restated Certificate of Incorporation so
authorizes;
(b) a majority of the votes entitled to be cast by the class or series
to be issued approves the issue; or
(c) there are no outstanding shares of the class or series to be
issued.
If the Board of Directors does not fix the record date for determining
shareholders entitled to a share dividend, it is the date the Board of Directors
authorizes the share dividend.
SECTION 3. SHARE OPTIONS. Unless the Amended and Restated Certificate
of Incorporation provides otherwise, the Corporation may issue rights, options
or warrants for the purchase of its shares. The Board of Directors shall
determine the terms upon which the rights, options or warrants are issued, their
form and content, and the consideration for which the shares are to be issued.
The terms and conditions of stock rights and options which are created
and issued by the Corporation, or its successor, and which entitle the holders
thereof to purchase from the Corporation shares of any class or classes, whether
authorized but unissued shares, treasury shares or shares to be purchased or
acquired by the Corporation, may include restrictions or conditions that
preclude or limit the exercise, transfer, receipt or holding of such rights or
options by any person or persons, including any person or persons owning or
offering to acquire a specified number or percentage of the outstanding common
shares or other securities of the Corporation, or any transferee or transferees
of any such person or persons, or that invalidate or void such rights or options
held by any such person or persons or any such transferee or transferees.
ARTICLE VIII
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall have
inscribed thereon the name of the Corporation and such other words and figures
and in such design as may be prescribed by the Board of Directors, and may be
facsimile, engraved, printed or an impression, or other type seal.
ARTICLE IX
FISCAL YEAR
The fiscal year of the Corporation shall, by resolution, be determined
by the Board of Directors.
ARTICLE X
INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS
SECTION 1. ACTION AGAINST PARTY BECAUSE OF CORPORATE POSITION. The
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, partner, officer,
employee or agent of another Corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees inclusive of any
appeal), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such claim, action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
unlawful. The termination of any claim, action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of NOLO CONTENDERE or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
SECTION 2. ACTION BY OR IN THE RIGHT OF CORPORATION. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed claim, action or suit by or in the
right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, partner, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees inclusive of any appeal) actually and reasonably
incurred by him in connection with the defense or settlement of such claim,
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation unless and only to
the extent that a court of competent jurisdiction (the "Court") in which such
claim, action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court shall deem proper.
SECTION 3. REIMBURSEMENT IF SUCCESSFUL. To the extent that a director,
officer, employee or agent of the Corporation has been successful on the merits
or otherwise in defense of any claim, action, suit or proceeding referred to in
Sections 1 or 2 of this Article X, or in defense of any claims, issue or matter
therein, he shall be indemnified against expenses (including attorneys fees
inclusive of any appeal) actually and reasonably incurred by him in connection
therewith, notwithstanding that he has not been successful (on the merits or
otherwise) on any other claim, issue or matter in any such claim, action, suit
or proceeding.
SECTION 4. AUTHORIZATION. Any indemnification under Sections 1 and 2
of this Article X (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Sections 1 and 2. Such determination shall be made (a) by the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit or proceeding, or (b) if such a quorum is not obtainable, or,
even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (c) by the shareholders.
SECTION 5. ADVANCED REIMBURSEMENT. Expenses incurred in defending a
civil or criminal action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Directors in the specific case upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article.
SECTION 6. INDEMNIFICATION NOT EXCLUSIVE. The indemnification provided
by this Article shall be deemed exclusive of any other rights to which those
indemnified may be entitled under any statute, rule of law, provision of the
Amended and Restated Certificate of Incorporation, by-law, agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity, while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person. Where such other provision
provides broader rights of indemnification than these by-laws, said other
provision shall control.
SECTION 7. INSURANCE. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, partner, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the provisions of this
Article.
ARTICLE XI
AMENDMENT
Except as otherwise provided herein, these By-laws may be altered,
amended or repealed or new by-laws may be adopted by the shareholders or by the
Board of Directors at any regular meeting of the shareholders or of the Board of
Directors or at any special meeting of the shareholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
by-laws be contained in the notice of such meeting; provided, HOWEVER, that in
the case of amendments by shareholders, notwithstanding any other provisions of
these By-laws or any other provision of law which might otherwise permit a
lesser vote or no vote, but in addition to any affirmative vote of the holders
of any particular class or series of the capital stock required by law, the
Amended and Restated Certificate of Incorporation or these By-laws, the
affirmative vote of the holders of at least 66 2/3% of all then outstanding
shares of voting stock of the Corporation, voting together as a single class,
shall be required to alter, amend or repeal any provision of these By-laws;
PROVIDED, FURTHER, HOWEVER, that any amendment or repeal of any provision of
Section 12 of Article II of these By-laws by the shareholders shall require the
affirmative vote of the holders of at least a majority of all then outstanding
shares of Class A Common Stock, voting as a single class, and Class B Common
Stock, voting as a single class.
ARTICLE XII
EMERGENCY BY-LAWS
SECTION 1. EMERGENCY BY-LAWS. The Board of Directors may adopt by-laws
to be effective only in an emergency; PROVIDED, HOWEVER, the affirmative vote of
a majority of the members of the board of directors including at least one Class
A Director or Noteholder Director shall be required to adopt any by-law under
this Article XII which alters, amends or repeals any provision of Section 12 of
Article II of these By-laws. An emergency exists for the purposes of this
section if a quorum of the Corporation's directors cannot readily be assembled
because of some catastrophic event. The emergency by-laws, which are subject to
amendment or repeal by the shareholders, may make all provisions necessary for
managing the Corporation during an emergency, including:
(a) procedures for calling a meeting of the Board of Directors;
(b) quorum requirements for the meeting; and
(c) designation of additional or substitute directors.
SECTION 2. LINE OF SUCCESSION. The Board of Directors, either before
or during such emergency, may provide, and from time to time modify, lines of
succession in the event that during such emergency any or all officers or agents
of the Corporation are for any reason rendered incapable of discharging their
duties.
SECTION 3. GOVERNING BY-LAWS. All provisions of these By-laws
consistent with the emergency by-laws remain effective during the emergency. The
emergency by-laws are not effective after the emergency ends.
SECTION 4. EFFECT OF CORPORATE ACTION. Corporate action taken in good
faith in accordance with the emergency by-laws:
(a) binds the Corporation; and
(b) may not be used to impose liability on a corporate director,
officer, employee or agent.
ARTICLE XIII
DEFINITIONS
The following terms used herein shall the meanings specified below.
"Deferred Interest Notes" shall mean the $___ million principal amount
of 10% Secured Deferred Interest Notes due 2005 issued by the Corporation
pursuant to the Plan under the Deferred Interest Notes Indenture.
"Deferred Interest Notes Indenture" means the Indenture among the
Corporation, as Issuer, the Subsidiary Guarantors named therein and United
States Trust Company of New York, as trustee, which indenture relates to the
Deferred Interest Notes, as it may be amended, modified or supplemented from
time to time.
"New Money Investors" means certain persons or entities that have
agreed to purchase for an aggregate purchase price of $30 million to acquire
7,000,000 shares of Class B Common Stock in accordance with the terms of the
Plan.
"Plan" means the Joint Plan of Reorganization proposed by the
Corporation and certain of its subsidiaries, as it may be amended or modified
from time to time, and as confirmed by Order dated January 20, 2000 by the
United States Bankruptcy Court for the District of Delaware.
"Voting Agreement" means that certain Voting Agreement dated as of
February __, 2000 by and among the New Money Investors and the Trustee under the
Deferred Interest Notes Indenture.
Exhibit T3C-1
Planet Hollywood PIK Indenture.DOC WF&G Draft
02/17/00
================================================================================
PLANET HOLLYWOOD INTERNATIONAL, INC.,
as Issuer,
THE SUBSIDIARY GUARANTORS
NAMED HEREIN,
as Subsidiary Guarantors,
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
10% Secured Deferrable Interest Notes Due 2005
INDENTURE
Dated as of February __, 2000
===============================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1. Definitions and Incorporation by Reference
SECTION 1.1. Definitions............................................ 1
SECTION 1.2. Other Definitions......................................16
SECTION 1.3. Incorporation by Reference of Trust Indenture Act......17
SECTION 1.4. Rules of Construction..................................18
ARTICLE 2. The Notes
SECTION 2.1. Form and Dating........................................18
SECTION 2.2. Execution and Authentication...........................19
SECTION 2.3. Registrar and Paying Agent.............................19
SECTION 2.4. Paying Agent To Hold Money in Trust....................19
SECTION 2.5. Lists of Holders.......................................20
SECTION 2.6. Transfer and Exchange..................................20
SECTION 2.7. Replacement Notes......................................21
SECTION 2.8. Outstanding Notes......................................21
SECTION 2.9. Temporary Notes........................................21
SECTION 2.10. Cancellation..........................................21
SECTION 2.11. Defaulted Interest....................................22
SECTION 2.12. CUSIP Numbers.........................................22
ARTICLE 3. Redemption
SECTION 3.1. Notices to the Trustee.................................22
SECTION 3.2. Selection of Notes To Be Redeemed......................22
SECTION 3.3. Notice of Redemption...................................23
SECTION 3.4. Effect of Notice of Redemption.........................23
SECTION 3.5. Deposit of Redemption Price............................23
SECTION 3.6. Notes Redeemed in Part.................................24
SECTION 3.7. Optional Redemption....................................24
SECTION 3.8. Mandatory Redemption...................................24
ARTICLE 4. Covenants
SECTION 4.1. Payment of Notes.......................................24
SECTION 4.2. SEC Reports............................................25
SECTION 4.3. Limitation on Consolidated Debt........................25
SECTION 4.4. Future Guarantors......................................27
SECTION 4.5. Limitation on Restricted Payments......................27
SECTION 4.6. Dividend and other Payment Restrictions
Affecting Subsidiaries.................................27
SECTION 4.7. Asset Dispositions.....................................29
SECTION 4.8. Transactions with Affiliates...........................30
SECTION 4.9. Limitation on Issuances and Sales of Capital,
Stock of Restricted Subsidiaries.......................30
SECTION 4.10. Change of Control.....................................31
SECTION 4.11. Limitation on Liens...................................32
SECTION 4.12. Business Activities...................................34
SECTION 4.13. Maintenance of Insurance..............................34
SECTION 4.14. Compliance Certificates; Statement by Officers
as to Default.........................................34
SECTION 4.15. Nomination of Class A Directors.......................34
SECTION 4.16. Further Instruments and Acts..........................35
SECTION 4.17. Calculation of Original Issue Discount.................35
ARTICLE 5. Successor Company
SECTION 5.1. When Company May Merge or Transfer Assets..............35
ARTICLE 6. Defaults and Remedies
SECTION 6.1. Events of Default......................................36
SECTION 6.2. Acceleration...........................................38
SECTION 6.3. Other Remedies.........................................38
SECTION 6.4. Waiver of Past Defaults................................38
SECTION 6.5. Control by Majority....................................39
SECTION 6.6. Limitation on Suits....................................39
SECTION 6.7. Rights of Holders To Receive Payment...................39
SECTION 6.8. Collection Suit by Trustee.............................39
SECTION 6.9. Trustee May File Proofs of Claim.......................40
SECTION 6.10. Priorities............................................40
SECTION 6.11. Undertaking for Costs.................................40
SECTION 6.12. Waiver of Stay or Extension Laws......................40
SECTION 6.13. Actions of a Holder...................................41
ARTICLE 7. Trustee
SECTION 7.1. Duties of Trustee......................................41
SECTION 7.2. Rights of Trustee......................................42
SECTION 7.3. Individual Rights of Trustee...........................43
SECTION 7.4. Trustee's Disclaimer...................................43
SECTION 7.5. Notice of Defaults.....................................43
SECTION 7.6. Reports by Trustee to Holders..........................43
SECTION 7.7. Compensation and Indemnity.............................43
SECTION 7.8. Replacement of Trustee.................................44
SECTION 7.9. Successor Trustee by Merger............................45
SECTION 7.10. Eligibility; Disqualification.........................45
SECTION 7.11. Preferential Collection of Claims Against Company.....45
ARTICLE 8. Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Notes; Defeasance............45
SECTION 8.2. Conditions to Defeasance...............................46
SECTION 8.3. Application of Trust Money.............................47
SECTION 8.4. Repayment to Company...................................48
SECTION 8.5. Indemnity for Government Obligations...................48
SECTION 8.6. Reinstatement..........................................48
ARTICLE 9. Amendments
SECTION 9.1. Without Consent of Holders.............................48
SECTION 9.2. With Consent of Holders................................49
SECTION 9.3. Compliance with Trust Indenture Act....................49
SECTION 9.4. Revocation and Effect of Consents and Waivers..........50
SECTION 9.5. Notation on or Exchange of Notes.......................50
SECTION 9.6. Trustee To Sign Such Amendments........................50
SECTION 9.7. Payment for Consent....................................50
ARTICLE 10. Security
SECTION 10.1. Security Documents....................................51
SECTION 10.2. Opinions of Counsel...................................51
SECTION 10.3. Release and Substitution of Collateral................52
SECTION 10.4. Certificates of the Company...........................52
SECTION 10.5. Authorization of Actions to be Taken by the Trustee
Under the Security Documents..........................53
SECTION 10.6. Authorization of Receipt of Funds by the Trustee
Under the Security Documents..........................53
SECTION 10.7. Release upon Termination of the Company's Obligations.53
ARTICLE 11. Subsidiary Guarantees
SECTION 11.1. Guarantees............................................54
SECTION 11.2. Limitation on Liability...............................55
SECTION 11.3. Successors and Assigns................................55
SECTION 11.4. No Waiver.............................................55
SECTION 11.5. Modification..........................................56
SECTION 11.6. Release of Subsidiary Guarantor.......................56
ARTICLE 12. Miscellaneous
SECTION 12.1. Trust Indenture Act Controls..........................56
SECTION 12.2. Notices...............................................54
SECTION 12.3. Communication by Holders with Other Holders...........57
SECTION 12.4. Certificate and opinion as to Conditions Precedent....57
SECTION 12.5. Statements Required in Certificate or Opinion.........57
SECTION 12.6. When Notes Disregarded................................57
SECTION 12.7. Rules by Trustee, Paying Agent and Registrar..........58
SECTION 12.8. Legal Holidays........................................58
SECTION 12.9. Governing Law.........................................58
SECTION 12.10. No Recourse Against Others...........................58
SECTION 12.11. Successors...........................................58
SECTION 12.12. Multiple Originals...................................58
SECTION 12.13. Table of Contents; Headings..........................58
Exhibit A Form of Note
Exhibit B Form of Guarantor Security Agreement
Exhibit C Form of Intercreditor Agreement
Exhibit D Form of Mortgage
Exhibit E Form of Pledge Agreement
Exhibit F Form of Security Agreement
Exhibit G Form of TSP Pledge Agreement
<PAGE>
CROSS-REFERENCE TABLE
TIA Indenture
SECTION SECTION
310 (a)(1)......................................................... 7.10
(a)(2)......................................................... 7.10
(a)(3)......................................................... N.A.
(a)(4)......................................................... N.A.
(b)............................................................ 7.8;7.10
(c)............................................................ N.A.
311 (a)............................................................ 7.11
(b)............................................................ 7.11
(c)............................................................ N.A.
312 (a)............................................................ 2.5
(b)............................................................ 12.3
(c)............................................................ 12.3
313 (a)............................................................ 7.6
(b)(1)......................................................... N.A.
(b)(2)......................................................... 7.6
(c)............................................................ 7.6
(d)............................................................ 7.6
314 (a)............................................................ 12.2
(b)............................................................ 10.4
(c)(1)......................................................... 12.4
(c)(2)......................................................... 12.4
(c)(3)......................................................... N.A.
(d)............................................................ 10.2
(e)............................................................ 12.5
315 (a)............................................................ 7.1
(b)............................................................ 7.5;12.2
(c)............................................................ 7.1
(d)............................................................ 7.1;7.2
(e)............................................................ 6.11
316 (a)(last sentence)............................................. 12.6
(a)(1)(A)...................................................... 6.5
(a)(1)(B)...................................................... 6.4
(a)(2)......................................................... N.A.
(b)............................................................ 6.7
317 (a)(1)......................................................... 6.8
(a)(2)......................................................... 6.9
(b)............................................................ 2.4
318 (a)............................................................ 12.1
N.A. means Not Applicable.
- ------------------
Note: This Cross-Reference Table shall not, for any purpose be deemed to be
part of this Indenture.
<PAGE>
INDENTURE dated as of February __, 2000, among PLANET HOLLYWOOD
INTERNATIONAL, INC., a Delaware corporation ("PLANET HOLLYWOOD" and the
"COMPANY"), [NAMES OF SUBSIDIARY GUARANTORS] (collectively, the "SUBSIDIARY
GUARANTORS") and UNITED STATES TRUST COMPANY OF NEW YORK, a New York banking
corporation (the "TRUSTEE").
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders.
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person, (i) Debt
of any other Person existing at the time such Person merges with or into or
consolidates with or becomes a Restricted Subsidiary of such specified Person
and (ii) Debt secured by a Lien encumbering any asset acquired by such specified
Person, which Debt or Lien was not Incurred in anticipation of, and was
outstanding prior to, such merger, consolidation or acquisition.
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; PROVIDED, HOWEVER,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control. The terms "CONTROLLING" and "CONTROLLED" have
meanings correlative to the foregoing.
"ASSET DISPOSITION" means any transfer, conveyance, sale, lease or
other disposition (collectively, any "DISPOSITION") by the Company or any
Restricted Subsidiary (including any disposition by means of a consolidation,
merger or similar transaction or as a result of any Condemnation) other than (a)
dispositions in the ordinary course of business (including dispositions of
obsolete or worn-out property), (b) a disposition by a Restricted Subsidiary to
the Company or a Restricted Subsidiary or by the Company to a Restricted
Subsidiary of (i) shares of Capital Stock or other ownership interests of a
Restricted Subsidiary, (ii) all or substantially all of the assets of the
Company or any Restricted Subsidiary representing a division or line of business
or (iii) other assets or rights of such Person or any of its Restricted
Subsidiaries, (c) a disposition of Memorabilia as permitted under the Revolving
Credit Agreement, (d) a Restricted Payment which is permitted pursuant to
Section 4.5 or (e) a disposition that is subject to the provisions set forth in
Section 5.1(a).
"ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Notes, compounded annually) of the total obligations
of the lessee for rental payments during the remaining term of the lease
included in such Sale and Leaseback Transaction (including any period for which
such lease has been extended).
"AVERAGE LIFE" means, as of the date of determination with respect to
any Debt or Preferred Stock, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such Debt or redemption or
similar payment with respect to such Preferred Stock multiplied by the amount of
such payment by (ii) the sum of all such payments.
"BANK CREDIT AGREEMENT" means any one or more credit agreements (which
may include or consist of revolving credits) between the Company or any
Restricted Subsidiary and one or more banks or other financial institutions
providing financing for the business of the Company and its Restricted
Subsidiaries, including without limitation the Revolving Credit Agreement and
the Senior Secured Notes.
"BUILDING" means the building situated on the Hotel/Retail Property.
"BUSINESS DAY" means each day which is not a Legal Holiday.
"CAPITAL LEASE OBLIGATION" of any Person means an obligation that is
required to be classified and accounted for as a capital lease or a liability on
the face of a balance sheet of such Person in accordance with GAAP (a "CAPITAL
LEASE"). The amount of such Debt represented by such obligation shall be the
capitalized amount thereof that would appear on the face of a balance sheet of
such Person in accordance with GAAP.
"CAPITAL STOCK" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person and shall (i) include any preferred equivalent
obligations and (ii) exclude debt securities convertible into Capital Stock.
"CHANGE OF CONTROL" means:
(i) the sale, lease or transfer, in one transaction or a series
of related transactions, of all or substantially all the assets of the
Company and the Restricted Subsidiaries taken as a whole, except as
permitted by the proviso to Section 5.1; or
(ii) the adoption of a plan relating to the liquidation or
dissolution of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means any assets of the Company or any of its
Subsidiaries defined as "COLLATERAL" in any of the Security Documents and assets
from time to time in which a Lien exists as security for any of the Obligations
under this Indenture.
"COLLATERAL AGENT" means United States Trust Company of New York,
acting in its capacity as agent with respect to the Collateral under the
Security Documents.
"COMMISSION" means the Securities and Exchange Commission and any
survivor agency.
"CONDEMNATION" means any actual or threatened condemnation, taking or
exercise of the power of eminent domain or similar action or proceeding.
"CONSOLIDATED EBITDA" for any period means the Consolidated Net Income
of the Company and its Restricted Subsidiaries for such period PLUS the
following (to the extent deducted in calculating such Consolidated Net Income):
(i) Consolidated Interest Expense of the Company and its
Restricted Subsidiaries for such period,
(ii) Consolidated Income Tax Expense of the Company and its
Restricted Subsidiaries for such period,
(iii) the consolidated depreciation and amortization expense
included in the income statement of the Company and its Restricted
Subsidiaries for such period, and
(iv) any non-cash expense related to the issuance to employees of
the Company or any Restricted Subsidiary of the Company of options to
purchase Capital Stock of the Company or such Restricted Subsidiary;
PROVIDED, HOWEVER, that if Consolidated EBITDA for any period shall be less than
$1.00, Consolidated EBITDA for such period shall be deemed to be $1.00.
"CONSOLIDATED INCOME TAX EXPENSES" for any period means the
consolidated provision for income taxes of the Company and the Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the
consolidated interest expense included in a consolidated income statement
(excluding interest income) of the Company and the Restricted Subsidiaries for
such period calculated on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the consolidated net
income (or loss) of the Company and the Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; PROVIDED, HOWEVER,
that there shall be excluded therefrom:
(i) the net income (or loss) of any Person acquired by the
Company or a Restricted Subsidiary in a pooling-of-interests
transaction for any period prior to the date of such transaction,
(ii) the net income (and loss) of any Person that is not a
Restricted Subsidiary except to the extent of the amount of dividends
or other distributions actually paid to the Company or a Restricted
Subsidiary by such Person during such period,
(iii) all extraordinary gains and losses (including from Asset
Dispositions),
(iv) the cumulative effect of changes in accounting principles,
(v) non-cash gains or losses resulting from fluctuations in
currency exchange rates,
(vi) any noncash gain or loss realized on the termination of any
employee pension benefit plan and
(vii) the tax effect of any of the items described in clauses (i)
through (vii) above;
PROVIDED FURTHER, HOWEVER, that for purposes of any determination pursuant to
the provisions of Section 4.5, there shall further be excluded therefrom the net
income of any Restricted Subsidiary that is subject to a restriction which
prevents the payment of dividends or the making of distributions to the Company
or another Restricted Subsidiary of the Company to the extent of such
restriction.
"CONSOLIDATED NET WORTH" of any Person means the consolidated
stockholders, equity of such Person, determined on a consolidated basis in
accordance with GAAP, LESS amounts attributable to Disqualified Stock of such
Person; PROVIDED, HOWEVER, that, with respect to the Company, adjustments
following the date of this Indenture to the accounting books and records of the
Company in accordance with Accounting Principles Board Opinions Nos. 16 and 17
(or successor opinions thereto) or otherwise resulting from the acquisition of
control of the Company by another Person shall not be given effect to.
"DEBT" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent,
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including any such
obligations Incurred-in connection with the acquisition of property,
assets or businesses,
(iii) every reimbursement obligation of such Person with respect
to letters of credit, bankers, acceptances or similar facilities
issued for the account of such Person,
(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(v) every Capital Lease Obligation of such Person,
(vi) all Receivables Sales of such Person, together with any
obligation of such Person to pay any discount, interest, fees,
indemnities, penalties, recourse expenses or other amounts in
connection therewith,
(vii) all obligations to redeem Disqualified Stock issued by such
Person,
(viii) all Attributable Debt,
(ix) net obligations under Interest Rate and Currency Protection
Agreements of such Person,
(x) every obligation of the type referred to in clauses (i)
through (ix) of another Person secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by
such Person), the amount of such obligation being deemed to be the
lesser of the fair market value of such property or assets and the
amount of the obligation so secured and
(xi) every obligation of the type referred to in clauses (i)
through (ix) of another Person and all dividends of another Person the
payment of which, in either case, such Person has Guaranteed.
The "AMOUNT" or "PRINCIPAL AMOUNT" of any Debt at any time of determination as
used herein represented by (a) any Debt issued at a price that is less than the
principal amount at maturity thereof, shall be the amount of the liability in
respect thereof determined in accordance with GAAP, (b) any Receivables Sales
shall be the amount of the unrecovered capital or principal investment of the
purchaser (other than the Company or a Wholly-Owned Restricted Subsidiary)
thereof, excluding amounts representative of yield or interest earned on such
investment, (c) any Disqualified Stock, shall be the maximum fixed redemption or
repurchase price in respect thereof, (d) any Capital Lease Obligation, shall be
determined in accordance with the definition thereof and (e) any Permitted
Interest Rate or Currency Protection Agreement shall be zero. In no event shall
Debt include any liability for taxes. For purposes of determining any particular
amount of Debt, Guarantees or Liens with respect to letters of credit supporting
Debt otherwise included in the determination of a particular amount shall not be
included.
"DECLARATION OF EASEMENTS" means the Declaration of Easements, dated
as of December 3, 1997 between TSP and Atlantic Financial Group Ltd., as the
same may be amended or modified from time to time.
"DEFAULT" means an event that is, or after the passing of time or the
giving of notice or both would be, an Event of Default.
"DEFEASANCE OBLIGATIONS" means Government Securities (or certificates
representing an ownership interest in such Government Obligations) which are not
callable or redeemable at the issuer's option.
"DISQUALIFIED STOCK" of any Person means any Capital Stock of such
Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
first anniversary of the final Stated Maturity of the Notes; PROVIDED, HOWEVER,
that any Preferred Stock which would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require the Company to
repurchase or redeem such Preferred Stock upon the occurrence of a change of
control occurring prior to the first anniversary of the final Stated Maturity of
the Notes shall not constitute Disqualified Stock if the change of control
provisions applicable to such Preferred Stock are no more favorable to the
holders of such Preferred Stock than the provisions applicable to the Notes
contained in Section 4.10 and such Preferred Stock specifically provides that
the Company will not repurchase or redeem any such stock pursuant to such
provisions prior to the Company's repurchase of such Notes as are required to be
repurchased pursuant to Section 4.10.
"ELIGIBLE INSTITUTION" means a commercial banking institution that has
combined capital and surplus of not less than $500 million or its equivalent in
foreign currency, whose debt is rated "A-311 or higher or "A--" or higher
according to Moody's Investors Service, Inc. or Standard & Poor's Ratings Group
(or such similar equivalent rating by at least one "NATIONALLY RECOGNIZED
STATISTICAL RATING ORGANIZATION" (as defined in Rule 436 under the Securities
Act)) respectively, at the time as of which any investment or rollover therein
is made.
"EQUITY OFFERING" means any offering of common stock of the Company in
an underwritten sale to the public pursuant to a registration statement (other
than on Form S-8 or any other form relating to securities issuable under any
benefit plan of the Company) that is declared effective by the Commission.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
(or any successor act) and the rules and regulations thereunder.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the relevant date, including those set
forth in (i) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the Commission
governing the inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
Commission.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which obligations
or guarantee the full faith and credit of the United States is pledged.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Debt of any other Person, (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person, (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt,
(ii) to purchase property, securities or services for the purposes of assuring
the holder of such Debt of the payment of such Debt, or (iii) to maintain
working capital, equity capital or other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Debt (and "GUARANTEED", "GUARANTEEING" and "GUARANTOR" shall have meanings
correlative to the foregoing); PROVIDED, HOWEVER, that the Guarantee by any
Person shall not include endorsements by such Person for collection or deposit,
in either case, in the ordinary course of business.
"GUARANTOR SECURITY AGREEMENT" means the Guarantor Security Agreement,
dated as of February __, 2000, made by the Subsidiary Guarantors in favor of the
Collateral Agent as secured party thereunder, as the same may be amended,
supplemented or otherwise modified from time to time, and which shall be
substantially in the form of Exhibit B attached hereto.
"HOLDERS" means the registered holders from time to time of the Notes.
"HOSPITALITY" shall mean Planet Hospitality Holdings, Inc.
"HOTEL/RETAIL PROPERTY" shall mean the improved parcel of real
property commonly known as, and located at, 1567 Broadway, New York, New York,
and having the lot designation Tax Lot 39, Block 1018, on the Tax Map of the
City of New York, together with all rights appurtenant thereto.
"IMPROVEMENTS AGREEMENT" means the Improvements Agreement, dated as of
December 3, 1997, among TSP, Atlantic Financial Group, Ltd. and Palnet Hollywood
(Region III), Inc., as the same may be amended from time to time.
"INCUR" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other obligation
including by acquisition of Subsidiaries or the recording, as required pursuant
to GAAP or otherwise, of any such Debt or other obligation on the balance sheet
of such Person (and "INCURRENCE", "Incurred" and "Incurring" shall have the
meanings correlative to the foregoing); PROVIDED, HOWEVER, that a change in GAAP
that results in an obligation of such Person that exists at such time becoming
Debt shall not be deemed an Incurrence of such Debt and that neither the accrual
of interest nor the accretion of original issue discount shall be deemed an
Incurrence of Debt. Notwithstanding the foregoing, the Company may elect to
treat all or any portion of revolving credit debt of the Company or a Subsidiary
as being Incurred from and after any date beginning the date the revolving
credit commitment is extended to the Company or a Subsidiary, by furnishing
notice thereof to the Trustee, and any borrowings or reborrowings by the Company
or a Subsidiary under such commitment up to the amount of such commitment
designated by the Company as Incurred shall not be deemed to be new Incurrence
of Debt by the Company or such Subsidiary; PROVIDED, HOWEVER, that the undrawn
portion of any such revolving credit debt shall be deemed to be outstanding Debt
until such time as the commitment thereunder is terminated. Neither the accrual
of interest nor the accretion of principal of a non-interest bearing or other
discount or deferrable security shall be deemed the Incurrence of Debt.
"INDENTURE" means this Indenture as the same may be amended,
supplemented or otherwise modified from time to time.
"INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
judgment of the Board of Directors of the Company, qualified to perform the task
for which it has been engaged and disinterested and independent with respect to
the Company and its Subsidiaries and Affiliates.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement dated as
of the Issue Date by and among the Company, the Revolving Credit Agent, the
Senior Secured Notes Agent and the Trustee that shall set forth the relative
rights of the parties in respect of the shared collateral and security interests
granted by the Company and the Subsidiary Guarantors to such parties, as the
same may be amended, supplemented or otherwise modified from time to time, and
which shall be substantially in the form of Exhibit C attached hereto.
"INTEREST PAYMENT DATE" means _______________.
"INTEREST RATE OR CURRENCY PROTECTION AGREEMENT" of any Person means
any forward contract, futures contract, swap, option or other financial
agreement or arrangement (including, without limitation, caps, floors, collars
and similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates or indices.
"INVESTMENT" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise) to, or purchase or acquisition of
Capital Stock, bonds, notes, debentures or other securities or evidence of Debt
issued by, any other Person, including any payment on a Guarantee of any
obligation of such other Person, but excluding any loan, advance or extension of
credit to an employee of the Company or any Restricted Subsidiary in the
ordinary course of business, accounts receivables and other commercially
reasonable extensions of trade credit.
"ISSUE DATE" means the date on which the Notes are first issued and
delivered.
"LENDERS" means each of the institutions a party to and acting as
lenders under the Revolving Credit Agreement.
"LICENSE AGREEMENT" means the License Agreement dated as of December
3, 1997, among the Company, Planet Hollywood (Region IV), Inc., Planet Hollywood
(Region III), Inc and TSP, as the same may be amended from time to time.
"LIEN" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, Receivables Sale, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing or any
Sale and Leaseback Transaction).
"MASTER AGREEMENT" means the Master Agreement dated as of December 2,
1997, among TSP, Hospitality, Intell Times Square LLC, Madison Broadway
Associates LLC, SPE Times Square, Inc. and Ned White, as the same may be amended
from time to time.
"MEMORABILIA" means all memorabilia, collectibles, souvenirs,
keepsakes or any other tangible property owned by the Company or any Subsidiary
Guarantor the market value of which is to any extent derived from the
association with (i) a celebrity, entertainer or athlete or any other person
reasonably understood to be a celebrity, entertainer or athlete or (ii) any
motion picture, television program, series of television programs or sports or
entertainment event.
"MORTGAGE" means that certain mortgage dated as of February __, 2000
made by [new SPV] in favor of the Collateral Agent for the benefit of the
Holders, as the same may be amended, modified or supplemented from time to time,
and which shall be substantially in the form of Exhibit D attached hereto.
"NET AVAILABLE PROCEEDS" from any Asset Disposition by any Person
means cash or Permitted Short-Term Investments received (including by way of
sale or discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiror of Debt or other obligations relating to such properties or assets)
therefrom by such Person, net of (i) all legal, title and recording tax
expenses, commissions and other fees and expenses Incurred and all federal,
state, provincial, foreign and local taxes (including taxes payable upon payment
or other distribution of funds from a foreign subsidiary to the Company or
another Subsidiary of the Company) required to be accrued as a liability as a
consequence of such Asset Disposition, (ii) all payments made by such Person or
its Restricted Subsidiaries on any Debt which is secured by such assets in
accordance with the terms of any Lien upon or with respect to such assets or
which must by the terms of such Lien, or in order to obtain a necessary consent
to such Asset Disposition or by applicable law, be repaid out of the proceeds
from such Asset Disposition, (iii) all distributions and other payments made to
minority interest holders in Restricted Subsidiaries of such Person or joint
ventures as a result of such Asset Disposition, (iv) appropriate amounts to be
provided by such Person or any Restricted Subsidiary thereof, as the case may
be, as a reserve in accordance with GAAP against any liabilities associated with
such assets and retained by such Person or any Restricted Subsidiary thereof, as
the case may be, after such Asset Disposition, including, without limitation,
liabilities under any indemnification obligations and severance and other
employee termination costs associated with such Asset Disposition, in each case
as determined by the Board of Directors of the Company, in its reasonable good
faith judgment evidenced by a board resolution filed with the Trustee; PROVIDED,
HOWEVER, that any reduction in such reserve within twelve months following the
consummation of such Asset Disposition will be treated for all purposes of this
Indenture and the Notes as a new Asset Disposition at the time of such reduction
with Net Available Proceeds equal to the amount of such reduction, and (v) any
consideration for an Asset Disposition (which would otherwise constitute Net
Available Proceeds) that is required to be held in escrow pending determination
of whether a purchase price adjustment will be made, but amounts under this
clause (v) shall become Net Available Proceeds at such time and to the extent
such amounts are released to such Person.
"NET CASH PROCEEDS", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"NON-RECOURSE DEBT" means Debt:
(i) as to which neither the Company nor any Restricted
Subsidiary:
(a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Debt);
(b) is directly or indirectly liable (as a guarantor or
otherwise); or
(c) constitutes the lender;
(ii) no default with respect to which (including any rights that
the holders thereof may have to take enforcement action against the
Company or any Unrestricted Subsidiary) would permit (upon notice,
lapse of time or both) any holder of any other Debt of the Company or
any Restricted Subsidiary to declare a default on such other Debt or
cause the payment thereof to be accelerated or payable prior to its
stated maturity; and
(iii) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company
or any of its Restricted Subsidiaries.
"NOTES" means the Notes issued under this Indenture.
"OFFER TO PURCHASE" means a written offer (the "OFFER") sent by the
Company by first class mail, postage prepaid, to each holder at his address
appearing in the Notes register on the date of the Offer offering to purchase up
to the principal amount of Notes specified in such offer at the purchase price
specified in such offer (as determined pursuant to this Indenture). Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "EXPIRATION DATE") of the offer to Purchase which shall be, subject to any
contrary requirements of applicable law, not less than 30 days or more than 60
days after the date of such offer and a settlement date for purchase of Notes
within five Business Days after the Expiration Date. The Company shall notify
the Trustee at least 15 Business Days (or such shorter period as is acceptable
to the Trustee) prior to the mailing of the Offer of the Company's obligation to
make an Offer to Purchase, and the offer shall be mailed by the Company or, at
the Company's request, by the Trustee in the name and at the expense of the
Company. The Offer shall contain information concerning the business of the
Company and its Subsidiaries which the Company in good faith believes will
enable such holders to make an informed decision with respect to the Offer to
Purchase (which at a minimum will include (i) the most recent annual and
quarterly financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in the documents
required to be filed with the Trustee pursuant to this Indenture (which
requirements may be satisfied by delivery of such documents together with the
offer), (ii) a description of material developments in the Company's business
subsequent to the date of the latest of such financial statements referred to in
clause (i) (including a description of the events requiring the Company to make
the Offer to Purchase), (iii) if applicable, appropriate pro forma financial
information concerning the Offer to Purchase and the events requiring the
Company to make the Offer to Purchase and (iv) any other information required by
applicable law to be included therein). The Offer shall contain all instructions
and materials necessary to enable such holders to tender Notes pursuant to the
Offer to Purchase.
"OFFICER" means the Chairman of the Board, the President, the Chief
Financial Officer, any Vice President, the Treasurer or the Secretary of the
Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.
"PARENT" means, with regard to any Person, any other entity of which
such Person is a Subsidiary.
"PERMITTED INTEREST RATE OR CURRENCY PROTECTION AGREEMENT" of any
Person means any Interest Rate or Currency Protection Agreement entered into
with one or more financial institutions in the ordinary course of business that
is designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred and which shall have a
notional amount no greater than the payments due with respect to the Debt being
hedged thereby and not for purposes of speculation.
"PERMITTED INVESTMENT" means an Investment by the Company or any
Restricted Subsidiary (i) in any Person as a result of which such Person becomes
a Restricted Subsidiary, (ii) in Permitted Short-Term Investments, (iii) in
Permitted Interest Rate or Currency Protection Agreements, (iv) made as a result
of the receipt of noncash consideration from an Asset Disposition that was made
pursuant to and in compliance with Section 4.7 and (v) consisting of loans or
advances to employees made in the ordinary course of business not to exceed
$250,000 in the aggregate outstanding at any one time.
"PERMITTED SHORT-TERM INVESTMENTS" means: (i) Government Securities
that mature or are subject to redemption at the option of the holder not more
than one year after the date of acquisition thereof; (ii) any time deposit
account, money market deposit and certificate of deposit maturing not more than
270 days after the date of acquisition issued by, or demand deposit in, an
Eligible Institution; (iii) commercial paper maturing not more than 270 days
after the date of acquisition issued by a corporation (other than an Affiliate
of the Company) with a rating, at the date of acquisition, of "P-1" or higher
according to Moody's Investors Service, Inc. or "A-1" or higher according to
Standard & Poor's Ratings Group (or such similar equivalent rating by at least
one "NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION" (as defined in Rule
436 under the Securities Act)); (iv) any banker's acceptances or money market
deposit accounts issued or offered by an Eligible Institution; (v) repurchase
obligations with a term of not more than 7 days for Government Securities
entered into with an Eligible Institution; and (vi) any fund investing primarily
in investments of the types described in clauses (i) through (v) above.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
"PLAN OF REORGANIZATION" means that certain First Amended Joint Plan
of Reorganization of the Company and certain of its Subsidiaries, dated as of
December 13, 1999, as amended, supplemented or otherwise modified, and as
confirmed by the United States Bankruptcy Court for the District of Delaware on
January 21, 2000.
"PLANET HOLLYWOOD PLANS" means the working drawings and specifications
that Planet Hollywood (Region III), Inc. and Atlantic Financial Group, Ltd. have
prepared or are required to prepare with respect to the Retail Unit as described
in the Improvements Agreement.
"PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as of
February __, 2000 by the Company and Planet Hollywood Memorabilia, Inc. and each
Subsidiary Guarantor that is a pledgor hereunder in favor of the Collateral
Agent for the benefit of the Holders, as amended, modified or supplemented from
time to time, and which shall be substantially in the form of Exhibit E attached
hereto.
"PREFERRED STOCK" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"PRINCIPAL" of a Note means the principal of the Note PLUS the
premium, if any, payable on the Note which is due or overdue or is to become due
at the relevant time.
"RECEIVABLES" means receivables, chattel paper, instruments, documents
or intangibles evidencing or relating to the right to payment of money in
respect of the sale of goods or services.
"RECEIVABLES SALE" of any Person means any sale of Receivables of such
Person (pursuant to a purchase facility or otherwise), other than in connection
with a disposition of the business operations of such Person relating thereto or
a disposition of defaulted Receivables for purpose of collection and not as a
financing arrangement.
"REFINANCE" means in respect of any Debt, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue other Debt in
exchange or replacement for, such Debt. "REFINANCED" and "REFINANCE" shall have
correlative meanings.
"REFINANCING DEBT" means Debt that Refinances any Debt of the Company
or any Restricted Subsidiary existing on the Issue Date or Incurred in
compliance with this Indenture, including Debt that Refinances Refinancing Debt;
PROVIDED, HOWEVER, that:
(i) such Refinancing Debt has a Stated Maturity no earlier than
the Stated Maturity of the Debt being Refinanced,
(ii) such Refinancing Debt has an Average Life at the time such
Refinancing Debt is Incurred that is equal to or greater than the
Average Life of the Debt being Refinanced,
(iii) such Refinancing Debt has an aggregate principal amount (or
if Incurred with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value)
then outstanding or committed (PLUS fees and expenses, including any
premium and defeasance costs) under the Debt being Refinanced, and
(iv) in the event the Debt being Refinanced constitutes a
Subordinated Obligation, the Refinancing Debt is subordinated to the
Notes to at least the same extent as the Debt being Refinanced;
PROVIDED FURTHER, HOWEVER, that Refinancing Debt shall not include (x) Debt of a
Subsidiary that Refinances Debt of the Company or (y) Debt of the Company or a
Restricted Subsidiary that Refinances Debt of an Unrestricted Subsidiary.
"RELATED PERSON" of any Person means any other Person directly or
indirectly owning (a) 10% or more of the outstanding common equity of such
Person (or, in the case of a Person that is not a corporation, 10% or more of
the equity interest in such Person) or (b) 10% or more of the combined voting
power of the Voting Stock of such Person.
"RESTRICTED PAYMENT" with respect to any Person means:
(i) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including
any payment in connection with any merger or consolidation involving
such Person) or similar payment to the direct or indirect holders of
its Capital Stock (other than dividends or distributions payable
solely in its Capital Stock (other than Disqualified Stock) and
dividends or distributions payable solely to the Company or a
Restricted Subsidiary, and other than pro rata dividends or other
distributions made by a Subsidiary that is not a Wholly-Owned
Restricted Subsidiary to minority stockholders (or owners of an
equivalent interest in the case of a Subsidiary that is an entity
other than a corporation)),
(ii) the purchase, redemption or other acquisition or retirement
for value of any Capital Stock of the Company held by any Person or of
any Capital Stock of a Restricted Subsidiary held by any Affiliate of
the Company (other than a Restricted Subsidiary), including the
exercise of any option to exchange any Capital Stock (other than into
Capital Stock of the Company that is not Disqualified Stock),
(iii) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any
Subordinated obligations (other than the purchase, repurchase or other
acquisition of Subordinated obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of acquisition)
or
(iv) the making of any Investment in any Person (other than a
Permitted Investment).
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company, whether
existing on or after the Issue Date, unless such Subsidiary is an Unrestricted
Subsidiary.
"RETAIL UNIT" shall have the meaning set forth in that certain
Declaration of Easements, dated as of December 3, 1997, between TSP and Atlantic
Financial Group, Ltd., recorded on December 18, 1997, in the Office of the City
Register, New York County, in Reel 2523, Page 2084, and includes, among other
things, (i) a fee simple interest in certain portions of the Building (i.e.,
most of the first, second and third floors of the Building and certain portions
of the fourth floor and the first floor of the cellar), (ii) an undivided twenty
five percent (25%) fee interest in the general common elements of the Building
(e.g., the underlying land and all shared utility facilities), and (iii) various
access and other easements (including access to the hotel located on the upper
floors of the Building, the general common elements of the Building and the
limited common elements appurtenant to the portions of the Building referenced
in clause (i) above).
"RETAIL UNIT CONTRACT OF SALE" means the Purchase and Sale Agreement,
dated January 4, 2000, between Planet Hollywood (Region III), Inc., as seller,
and Intell 1567 LLC, as purchaser, with respect to the Retail Unit.
"REVOLVING CREDIT AGENT" means the Agent from time to time under the
Revolving Credit Agreement.
"REVOLVING CREDIT AGREEMENT" means the Revolving Credit Agreement
dated February __, 2000 among the Company, Planet Hollywood Memorabilia, Inc.,
the Subsidiary Guarantors, The CIT Group/Business Credit, Inc. and Rothschild
Recovery Fund, L.P., as the same may be amended, supplemented or otherwise
modified from time to time.
"SALE AND LEASEBACK TRANSACTION" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person.
"SECURITIES ACT" means the Securities Act of 1933, as amended (or any
successor act) and the rules and regulations thereunder.
"SECURITY AGREEMENT" means the Security Agreement, dated as of
February __, 2000, made by the Company in favor of the Collateral Agent as
secured party thereunder, as the same may be amended, supplemented or otherwise
modified from time to time, and which shall be substantially in the form of
Exhibit F attached hereto.
"SECURITY DOCUMENTS" shall mean, collectively, the Security Agreement,
the Guarantor Security Agreement, the Pledge Agreement, the TSP Pledge
Agreement, the Mortgage, each Assignment for Security (Trademarks and
Copyrights), substantially in the form of Exhibit A to the Security Agreement,
executed and delivered by the Company and Planet Hollywood Memorabilia, Inc.
[each collateral assignment of leases and rents executed and delivered by the
Company and Planet Hollywood Memorabilia, Inc. and/or their Subsidiaries,] and
all Uniform Commercial Code financing statements required by the Security
Agreement and the Mortgage to be filed with respect to the security interests in
personal property and fixtures created pursuant to such agreements, and all
other documents and agreements executed and delivered by the Company and Planet
Hollywood Memorabilia, Inc. and/or their respective Subsidiaries in connection
with any of the foregoing documents.
"SENIOR SECURED NOTES" means the Company's Senior Secured Notes Due
2001.
"SENIOR SECURED NOTES AGENT" means Bay Harbour Management L.C.,
together with its succesors and assigns in such capacity.
"SENIOR SECURED NOTES COLLATERAL" means the Retail Unit Contract of
Sale, the Master Agreement, the Improvements Agreement, the License Agreement,
the TSP Agreement, the Declaration of Easements, the Zoning Lot Agreement and
the Planet Hollywood Plans.
"SENIOR SECURED NOTE PURCHASE AGREEMENT" means the Note Purchase
Agreement dated as of February __, 2000 among the Company, each of the
purchasers signatory thereto and the Senior Secured Notes Agent, as the same may
be amended, supplemented or otherwise modified from time to time.
"SIGNIFICANT SUBSIDIARY" means a Restricted Subsidiary that is a
"SIGNIFICANT SUBSIDIARY" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and the Exchange Act.
"STATED MATURITY" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"SUBORDINATED OBLIGATION" means any Debt of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the Notes pursuant to a written agreement to that
effect.
"SUBSIDIARY" of any Person means (i) a corporation more than 50% of
the combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person or
(ii) any other Person (other than a corporation) in which such Person, or one or
more other Subsidiaries of such Person or such Person and one or more other
Subsidiaries of such Person, directly or indirectly, has at least a majority
ownership and power to direct the policies, management and affairs thereof.
"SUBSIDIARY GUARANTEE" means the Guarantee by a Subsidiary Guarantor
of the Company' obligations with respect to the Notes contained in Article 11
hereof.
"SUBSIDIARY GUARANTOR" means each of the Restricted Subsidiaries that
will fully and unconditionally guarantee, jointly and severally, on a senior
basis to each Holder the Company's payment obligations under this Indenture and
the Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. H 77aaa-77bbbb)
as in effect on the date of this Indenture, except as provided by Section 9.3.
"TRUST OFFICER" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"TSP" shall mean Times Square Partners LLC.
"TSP AGREEMENT" means the Amended and Restated Limited Liability
Company Operating Agreement of TSP, dated as of December 3, 1997, among Intell
Times Square LLC, Madison Broadway Associates LLC, SPE Times Square, Inc.,
Hospitality and Ned White.
"TSP MEMBERSHIP INTEREST" shall mean the twenty percent (20%) equity
interest in TSP owned by Hospitality.
"TSP PLEDGE AGREEMENT" shall mean the TSP Pledge Agreement dated as of
February __, 2000 by Planet Hospitality Holdings, Inc. in favor of the
Collateral Agent for the benefit of the Holders, as the same may be amended,
supplemented or otherwise modified from time to time, and which shall be
substantially in the form of Exhibit G attached hereto.
"UNIFORM COMMERCIAL CODE" means the New York Uniform Commercial Code
as in effect from time to time.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of the Company
designated as such by the Board of Directors of the Company as set forth below
where (a) neither the Company nor any of its other Subsidiaries (other than
another Unrestricted Subsidiary) (1) provides credit support for, or Guarantee
of, any Debt of such Subsidiary or any Subsidiary of such Subsidiary (including
any undertaking, agreement or instrument evidencing such Debt), (2) is directly
or indirectly liable for any Debt of such Subsidiary or any Subsidiary of such
Subsidiary, or (3) has any obligation to make additional Investments in such
Subsidiary or any Subsidiary of such Subsidiary, (b) such Subsidiary has no Debt
other than Non-Recourse Debt; PROVIDED, HOWEVER, that if any Unrestricted
Subsidiary Incurs any Debt other than Non-Recourse Debt or any Non-Recourse Debt
Incurred by such Unrestricted Subsidiary shall thereafter cease for any reason
to be Non-Recourse Debt, such event shall be deemed to constitute an Incurrence
of such Debt by the Company and such Unrestricted Subsidiary shall be deemed to
be a Restricted Subsidiary for purposes of Section 4.4 and (c) such Subsidiary
and each Subsidiary of such Subsidiary has at least one director on its board of
directors that is not a director or executive officer of the Company or any
Restricted Subsidiary and (ii) any Subsidiary of an Unrestricted Subsidiary. The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary, PROVIDED that, immediately after giving effect to such designation,
the Company could incur an additional $1.00 of Debt pursuant to Section 4.3(a).
"VENDOR FINANCING FACILITY" means any agreements between the Company
and/or any Restricted Subsidiary and one or more vendors or lessors of equipment
to the Company and/or any Restricted Subsidiary (or any affiliate of any such
vendor or lessor) providing financing for the acquisition by the Company or any
such Restricted Subsidiary of equipment from any such vendor or lessor.
"VOTING STOCK" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means a Restricted Subsidiary 99%
or more of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by the
Company or by one or more Wholly-Owned Restricted Subsidiaries of the Company or
by the Company and one or more Wholly-Owned Restricted Subsidiaries of the
Company.
"ZONING LOT AGREEMENT" means the Zoning Lot, Development and Easement
Agreement, dated December 3, 1997, made by and among Lunt Theatre Company, TSP
and Atlantic Financial Group Ltd. and recorded in the Office of the Register of
The City of New York, County of New York on December 18, 1997 in Reel 2523, Page
2094 as the same may be amended or supplemented or otherwise modified from time
to time in accordance with the terms thereof.
SECTION 8. OTHER DEFINITIONS.
Defined in
Term Section
"AFFILIATE TRANSACTION"......................................... 4.8
"APPENDIX"...................................................... 2.1
"BANKRUPTCY LAW"................................................ 6.1
"CASH INSURANCE"................................................ 4.13
"CLASS A DIRECTOR RE-ELECTION NOTICE"........................... 4.15
"COMPANY"....................................................... Preamble
"COVENANT DEFEASANCE OPTION".................................... 8.1(b)
"CUSTODIAN"..................................................... 6.1
"DEBT COVERAGE RATIO"........................................... 4.3
"EVENT OF DEFAULT".............................................. 6.1
"HOLDERS NOTICE OF REPLACEMENT CLASS A DIRECTORS"............... 4.15
"INSURANCE ACCOUNT"............................................. 4.13
"INSURANCE PROCEEDS"............................................ 4.13
"COMPANY"....................................................... Preamble
"LEGAL DEFEASANCE OPTION"....................................... 8.1(b)
"LEGAL HOLIDAY"................................................. 12.8
"MANDATORY REDEMPTION".......................................... 3.8
"NOTES"......................................................... Recital
"NOTICE OF DEFAULT" 6.1
"OBLIGATIONS"................................................... 10.1
"PAYING AGENT".................................................. 2.3
"PERMITTED LIEN"................................................ 4.11
"PLANET HOLLYWOOD".............................................. Preamble
"PROXY STATEMENT"............................................... 4.15
"REGISTRAR"..................................................... 2.3
"REPLACEMENT DIRECTOR".......................................... 4.15
"SUCCESSOR COMPANY"............................................. 5.1
"TRUSTEE"....................................................... Preamble
SECTION 1.3. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. The
provisions of TIA ss.ss. 310 through 317 that impose a duty on any Person
(including the provisions automatically deemed included herein unless expressly
excluded by this Indenture) are a part of and govern this Indenture upon and so
long as the Indenture and Notes are subject to the TIA. If any provision of this
Indenture limits, qualifies or conflicts with such duties, the imposed duties
shall control. If a provision of the TIA requires or permits a provision of this
Indenture and the TIA provision is amended, then the Indenture provision shall
be automatically amended to like effect. The following TIA terms have the
following meanings:
"COMMISSION" means the Commission;
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meanings assigned to them by such definitions.
SECTION 1.4. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "OR" is not exclusive;
(4) "INCLUDING" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or
junior to secured Debt merely by virtue of its nature as unsecured
Debt;
(7) the principal amount of any noninterest bearing or other
discount or deferrable interest security at any date shall be the
principal amount thereof that would be shown on a balance sheet of the
issuer dated such date prepared in accordance with GAAP, but accretion
of principal on such security shall not be deemed to be the Incurrence
of Debt;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock, whichever is greater;
(9) the terms "redemption" and "redeemable" shall not be deemed
to refer to Offers to Purchase or to repurchases pursuant to Section
4.10 or similar offers or repurchases.
ARTICLE 2.
THE NOTES
SECTION 2.1. FORM AND DATING. The Notes and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A, which is
hereby incorporated in and expressly made a part of this Indenture. The Notes
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or usage (PROVIDED
that any such notation, legend or endorsement is in a form acceptable to the
Company). Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in the Exhibit A are part of the terms of this Indenture.
SECTION 2.2. EXECUTION AND AUTHENTICATION. Two officers shall sign the
Notes for the Company by manual or facsimile signature.
If an officer whose signature is on a Note no longer holds that office
at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate and deliver Notes for original issue
upon a written order of the Company signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary of the Company. Such
order shall specify the amount of the Notes to be authenticated and the date on
which the original issue of Notes is to be authenticated. The aggregate
principal amount of Notes outstanding at any time may not exceed that amount
except as provided in Section 2.7.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.3. REGISTRAR AND PAYING AGENT. The Company shall maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange (the "REGISTRAR") and an office or agency where Notes may be
presented for payment (the "PAYING AGENT"). The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may have one or
more co-registrars and one or more additional paying agents. The term "PAYING
AGENT" includes any additional paying agent. Whenever the Company must issue or
deliver Notes pursuant to this Indenture, the Trustee shall authenticate the
Notes at the Company's request.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its domestically incorporated wholly owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Notes.
SECTION 2.4. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each due
date of the principal and interest on any Note, the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal and interest when so
becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Notes and shall notify the Trustee of
any default by the Company in making any such payment. If either Company or a
Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 2.5. LISTS OF HOLDERS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders.
SECTION 2.6. TRANSFER AND EXCHANGE. The Notes shall be issued in
registered form and shall be transferable only upon the surrender of a Note for
registration of transfer. When a Note is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401(l) (or any
successor provision thereto) of the Uniform Commercial Code are met. When Notes
are presented to the Registrar or a co-registrar with a request to exchange them
for an equal principal amount of Notes of other denominations, the Registrar
shall make the exchange as requested if the same requirements are met.
To permit registration of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Notes at the Registrar's or
co-registrar's request. The Company may require payment of a sum sufficient to
pay all taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section.
The Company shall not be required to make and the Registrar need not
register transfers or exchanges of Notes selected for redemption (except, in the
case of Notes to be redeemed in part, the portion thereof not to be redeemed) or
any Notes for a period of 15 days before a selection of Notes to be redeemed or
15 days before an interest payment date.
Prior to the due presentation for registration of transfer of any
Note, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Note is registered as
the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
All Notes issued upon any transfer or exchange pursuant to the terms
of this Indenture will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Notes surrendered upon such transfer or
exchange.
SECTION 2.7. REPLACEMENT NOTES. If a mutilated Note is surrendered to
the Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 (or any
successor provision thereto) of the Uniform Commercial Code are met and the
Holder satisfies any other reasonable requirements of the Trustee. Such Holder
shall furnish an indemnity bond sufficient in the judgment of the Company and
the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar
and any co-registrar from any loss which any of them may suffer if a Note is
replaced. The Company and the Trustee may charge the Holder for its expenses in
replacing a Note.
Every replacement Note is an additional obligation of the Company.
SECTION 2.8. OUTSTANDING NOTES. The Notes outstanding at any time are
all Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. A Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Note is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, then on and
after that date such Notes (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.
A Note does not cease to be outstanding because the Company or one of
its Affiliates holds such Note; PROVIDED, HOWEVER, that, in determining whether
the Holders of the requisite principal amount at maturity of the outstanding
Notes have given any request, demand, authorization, direction, notice, consent
or waiver hereunder, Notes owned by the Company or any other obligor upon the
Notes or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which the
Trustee actually knows to be so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not the Company or any
other obligor upon the Notes or any Affiliate of the Company or of such other
obligor.
SECTION 2.9. TEMPORARY NOTES. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company consider appropriate for temporary
Notes. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes and deliver them in exchange for Temporary
Notes.
SECTION 2.10. CANCELLATION. The Company at any time may deliver Notes
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel and may,
but shall not be required to, destroy (subject to the record retention
requirements of the Exchange Act) all Notes surrendered for registration of
transfer, exchange, payment or cancellation unless the Company directs the
Trustee to deliver canceled Notes to the Company. The Company may not issue new
Notes to replace securities they have redeemed, paid or delivered to the Trustee
for cancellation.
SECTION 2.11. DEFAULTED INTEREST. If the Company defaults in a payment
of interest on the Notes, the Company shall pay defaulted interest (plus
interest on such defaulted interest to the extent lawful) in any lawful manner.
The Company may pay the defaulted interest to the persons who are Holders on a
subsequent special record date. The Company shall fix or cause to be fixed any
such special record date and payment date to the reasonable satisfaction of the
Trustee and shall promptly mail to each Holder a notice that states the special
record date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP NUMBERS. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; PROVIDED,
HOWEVER, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3.
REDEMPTION
SECTION 3.1. NOTICES TO THE TRUSTEE. If the Company elects to redeem
Notes pursuant to Sections 3.7 or 3.8 hereof, it shall notify the Trustee in
writing of the redemption date, the principal amount of Notes to be redeemed and
the paragraph of the Notes pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.2. SELECTION OF NOTES TO BE REDEEMED. If less than all the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed by a method that complies with the requirements of the principal
national securities exchange, if any, on which the Notes are listed, or if the
Notes are not listed, on a pro rata basis, by lot or by such method as the
Trustee in its sole discretion shall deem to be fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Notes not previously called for redemption. The Trustee may select for
redemption portions of the principal of Notes that have denominations larger
than $1,000. Notes and portions of them the Trustee selects shall be in amounts
of $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to Notes called for redemption also apply to portions of Notes called for
redemption. The Trustee shall notify the Company promptly of the Notes or
portions of Notes to be redeemed.
SECTION 3.3. NOTICE OF REDEMPTION. At least 30 days but not more than
60 days before a date for redemption of Notes, the Company shall mail a notice
of redemption by first-class mail to each Holder of Notes to be redeemed at such
Holder's registered address. The notice shall identify the Notes (including
CUSIP number(s), if any) to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Notes are to be redeemed,
the identification and principal amounts of the particular Notes to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Notes (or portion
thereof) called for redemption ceases to accrue on and after the
redemption date;
(7) the paragraph of the Notes pursuant to which the Notes called
for redemption are being redeemed; and
(8) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.4. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption
is mailed, Notes called for redemption become due and payable on the redemption
date and at the redemption price stated in the notice. Upon surrender to the
Paying Agent, such Notes shall be paid at the redemption price stated in the
notice, plus accrued interest to the redemption date. Failure to give notice or
any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.
SECTION 3.5. DEPOSIT OF REDEMPTION PRICE. On or prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Notes to be redeemed on that date other than Notes or portions of Notes called
for redemption which have been delivered by the Company to the Trustee for
cancellation.
SECTION 3.6. NOTES REDEEMED IN PART. Upon surrender of a Note that is
redeemed in part, the Company shall execute and the Trustee shall authenticate
for the Holder (at the Company's expense) a new Note equal in principal amount
to the unredeemed portion of the Note surrendered.
SECTION 3.7. OPTIONAL REDEMPTION. At any time following the Issue
Date, the Notes will be redeemable, in whole or in part, at the option of the
Company, upon not less than 30 and no more than 60 days' prior notice, on any
_______ __, _______.__, _______ __ or _______ __ of any year at a redemption
price equal to 100% of the principal amount thereof PLUS accrued and unpaid
interest, if any, to the date of redemption.
SECTION 3.8. MANDATORY REDEMPTION. If (i) as reflected in the
Company's financial statements for the most recently completed period of four
fiscal quarters immediately preceding any Interest Payment Date (commencing
with the four-quarter fiscal period ending immediately prior to the first
anniversary of the Issue Date), the ratio of the Company's Consolidated EBITDA
to Consolidated Interest Expense for such four-quarter period is greater than
2.00 to 1.00 and (ii) the sum of the Company's cash on hand at the last day of
such period PLUS the lesser of the borrowing base or the commitments under the
Revolving Credit Agreement exceeds $25,000,000, then the Company shall be
required to use 50% of such excess amount to redeem the Notes, in whole or in
part, on the next Interest Payment Date, at a redemption price equal to 100% of
the principal amount thereof PLUS accrued and unpaid interest, if any, to the
date of redemption (a "MANDATORY REDEMPTION"); PROVIDED, HOWEVER, that the
Company shall not be required to make a Mandatory Redemption if such redemption
is not otherwise permitted by the Revolving Credit Agreement.
ARTICLE 4.
COVENANTS
SECTION 4.1. PAYMENT OF NOTES. The Company shall promptly pay the
principal of and interest on the Notes on the dates and in the manner provided
in the Notes and in this Indenture. Principal, interest and other amounts due on
the Notes shall be considered paid on the date due if on such date the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient to
pay all such amounts then due and the Trustee or the Paying Agent is not
prohibited from paying such amounts to the Holders on such date pursuant to the
terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Notes, and shall pay interest on overdue installments
of interest at the same rate to the extent lawful.
Notwithstanding any other provision of this Indenture or the Notes,
the Company shall be entitled to defer and compound to principal the first five
semi-annual installments of interest on the Notes; PROVIDED that (i) to the
extent so deferred and compounded, such installments shall be calculated at the
rate of 12.75% per annum (rather than 10% per annum) and (ii) if, as reflected
in the Company's financial statements for the most recently completed period of
four fiscal quarters (commencing with the first fiscal quarter after the Notes
are initially issued) for which such financial statements are available, the
ratio of the Company's Consolidated EBITDA to Consolidated Interest Expense for
such period is greater than 1.75 to 1.00, the Company shall not be entitled to
defer or compound the next succeeding semi-annual installments of interest
pursuant to the foregoing.
SECTION 4.2. SEC REPORTS. Notwithstanding that the Company may not be,
or may not be required to remain, subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall file with the
Commission (unless the Commission will not accept such filing) and provide the
Trustee and Holders with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections.
The Company will also comply with the other provisions of TIA ss. 314(a).
In addition, for so long as any Notes remain outstanding, the Company
shall furnish to the Holders and to securities analysts and prospective
investors, promptly following their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company,
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.3. LIMITATION ON CONSOLIDATED DEBT. (a) The Company may not,
and may not permit any Restricted Subsidiary to, Incur any Debt; PROVIDED,
HOWEVER, that the Company or any Restricted Subsidiary may Incur Debt so long as
the ratio of (i) the aggregate consolidated principal amount of Debt of the
Company and the Restricted Subsidiaries outstanding as of the most recent
available quarterly or annual balance sheet, after giving pro forma effect to
the Incurrence of such Debt and any other Debt Incurred since such balance sheet
date and the receipt and application of the proceeds thereof to (ii)
Consolidated EBITDA for the four full fiscal quarters ending on the date of such
balance sheet determined on a pro forma basis as if any such Debt had been
Incurred and the proceeds thereof had been applied at the beginning of such four
fiscal quarters, would be less than 3.00 to 1.00 (the "DEBT COVERAGE RATIO").
(b) Notwithstanding the foregoing limitation, the Company and any
Restricted Subsidiary may Incur the following:
(i) Debt Incurred under any one or more Vendor Financing
Facilities;
(ii) Debt under the Revolving Credit Agreement or other
agreements or arrangements to finance working capital requirements of
the Company and any Refinancing Debt in respect of such Debt;
PROVIDED, HOWEVER, at the time of the Incurrence of such Debt and
after giving effect thereto, the aggregate principal amount of all
Debt Incurred pursuant to this clause (ii) and then outstanding shall
not exceed $16.5 million;
(iii) Debt under the Senior Secured Notes and any Refinancing
Debt in respect of such Debt; PROVIDED, HOWEVER, at the time of the
Incurrence of such Debt and after giving effect thereto, the aggregate
principal amount of all Debt Incurred pursuant to this clause (iii)
and then outstanding shall not exceed $22 million plus the amount of
any Origination Fee that has become due and payable under the Senior
Secured Note Purchase Agreement;
(iv) Debt owed by the Company to any Wholly-Owned Restricted
Subsidiary or Debt owed by any Wholly-Owned Restricted Subsidiary to
the Company or to another Wholly-Owned Restricted Subsidiary;
PROVIDED, HOWEVER, that upon either (x) the transfer or other
disposition by such Wholly-Owned Restricted Subsidiary or the Company
of any Debt so permitted to a Person other than the Company or another
Wholly-Owned Restricted Subsidiary or (y) the issuance (other than
directors, qualifying shares), sale, lease, transfer or other
disposition of shares of Capital Stock (including by consolidation or
merger) of such Wholly-Owned Restricted Subsidiary to a Person other
than the Company or another such Wholly-Owned Restricted Subsidiary,
the provisions of this clause (iii) shall no longer be applicable to
such Debt and such Debt shall be deemed to have been Incurred by the
Company thereof at the time of such issuance, sale, lease, transfer or
other disposition;
(v) Refinancing Debt Incurred to Refinance Debt Incurred pursuant
to the first paragraph of this covenant or pursuant to clause (i),
(vii) or (viii) or this clause (v) of this paragraph;
(vi) Debt consisting of Permitted Interest Rate and Currency
Protection Agreements;
(vii) Debt represented by the Notes;
(viii) Debt (including Capital Lease Obligations) of the Company
or any Restricted Subsidiary financing the purchase, lease or
improvement of property (real or personal) or equipment (whether
through the direct purchase of assets or the Capital Stock of any
Person owning such assets), in each case Incurred no more than 180
days after such purchase, lease or improvement of such property and
any Refinancing Debt in respect of such Debt, PROVIDED, HOWEVER, that
(x) the amount of such Debt (net of original issue discount) does not
exceed, at the time initially Incurred, 90% of the fair market value
of such acquired property or equipment and (y) at the time of the
Incurrence of such Debt and after giving effect thereto, the aggregate
amount of all Debt Incurred pursuant to this clause (viii) and then
outstanding shall not exceed $10 million;
(ix) Debt consisting of performance and other similar bonds and
reimbursement obligations Incurred in the ordinary course of business
securing the performance of contractual, franchise or license
obligations of the Company or a Restricted Subsidiary, or in respect
of a letter of credit obtained to secure such performance; and
(x) Debt in an aggregate principal amount which, together with
all other Debt of the Company and the Restricted Subsidiaries
outstanding on the date of such Incurrence (other than Debt permitted
by clauses (i) through (ix) above or Section 4.3(a)) does not exceed
$5 million; PROVIDED, HOWEVER, that any Debt Incurred under this
clause (x) shall be expressly subordinated to the Notes.
(c) For purposes of determining compliance with this Section 4.3, in
the event that an item of Debt meets the criteria of more than one of the types
of Debt the Company and the Restricted Subsidiaries are permitted to Incur, the
Company or such Restricted Subsidiary, as the case may be, shall have the right,
in its sole discretion, to classify such item of Debt at the time of its
Incurrence and shall only be required to include the amount and type of such
Debt under the clause permitting the Debt as so classified.
SECTION 4.4. FUTURE GUARANTORS. In the event that, after the Issue
Date, the Company shall acquire or create a Subsidiary, the Company shall cause
such Subsidiary (unless such Subsidiary is an Unrestricted Subsidiary) to become
a Subsidiary Guarantor and to Guarantee the Notes pursuant to a Subsidiary
Guarantee.
SECTION 4.5. LIMITATION ON RESTRICTED PAYMENTS. The Company may not,
and may not permit any Restricted Subsidiary, directly or indirectly, to make a
Restricted Payment. Notwithstanding the foregoing, the Company may (i)
Refinance, and permit its Restricted Subsidiaries to Refinance, any Debt
otherwise permitted to be Refinanced by clause (iv) of Section 4.3(b); and (ii)
make any Restricted Payment by exchange for, or out of the proceeds of the
substantially concurrent sale of, or capital contribution in respect of, Capital
Stock of the Company (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary of the Company or an employee stock ownership
plan or to a trust established by the Company or any of its Subsidiaries for the
benefit of their employees).
SECTION 4.6. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. (a) The Company may not, and may not permit any Restricted
Subsidiary, directly or indirectly, to create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions to the Company
or any of its Restricted Subsidiaries on its Capital Stock or with
respect to any other interest or participation in, or measured by, its
profits;
(ii) pay any indebtedness owed to the Company or any Restricted
Subsidiary;
(iii) make loans or advances to the Company or any Restricted
Subsidiary; or
(iv) transfer any of its properties or assets to the Company or
any Restricted Subsidiary.
(b) Notwithstanding the foregoing, the Company may, and may permit any
Restricted Subsidiary to, suffer to exist any such encumbrance or restriction:
(i) pursuant to any agreement in effect on the Issue Date;
(ii) pursuant to an agreement relating to any Acquired Debt,
which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person so
acquired and its Subsidiaries;
(iii) pursuant to an agreement effecting a Refinancing of Debt
Incurred pursuant to an agreement referred to in clause (i) or (ii)
above or clause (iv) below, PROVIDED, HOWEVER, that the provisions
contained in such Refinancing agreement relating to such encumbrance
or restriction are no more restrictive taken as a whole (as determined
in good faith by the Chief Financial Officer of the Company) than the
provisions contained in the predecessor agreement the subject thereof;
(iv) in the case of clause (iii) of Section 4.6(a), consisting of
restrictions contained in any security agreement (including a Capital
Lease Obligation) securing Debt of the Company or a Restricted
Subsidiary otherwise permitted under this Indenture, but only to the
extent such encumbrances or restrictions restrict the transfer of the
property subject to such security agreement;
(v) in the case of clause (iv) of Section 4.6(a), consisting of
customary nonassignment provisions entered into in the ordinary course
of business in leases governing leasehold interests, but only to the
extent such provisions restrict the transfer of the lease or the
property thereunder;
(vi) with respect to a Restricted Subsidiary, imposed pursuant to
an agreement which has been entered into for the sale or disposition
of all or substantially all of the Capital Stock or assets of such
Restricted Subsidiary; PROVIDED, HOWEVER, that after giving effect to
such transaction no Default shall have occurred or be continuing, that
such restriction terminates if such transaction is not consummated and
that such consummation or abandonment of such transaction occurs
within one year of the date such agreement was entered into;
(vii) imposed pursuant to applicable law or regulations;
(viii) imposed pursuant to the Revolving Credit Agreement;
(ix) imposed pursuant to the Senior Secured Notes;
(x) imposed pursuant to this Indenture and the Notes; or
(xi) consisting of any restriction on the sale or other
disposition of assets or property securing Debt as a result of a
Permitted Lien on such assets or property.
SECTION 4.7. ASSET DISPOSITIONS. (a) The Company may not, and may not
permit any Restricted Subsidiary to, directly or indirectly, make any Asset
Disposition (other than dispositions of the Senior Secured Notes Collateral in
accordance with the terms of the Senior Secured Note Purchase Agreement) unless:
(i) the Company or such Restricted Subsidiary, as the case may be, 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 assets subject to such Asset Disposition, as determined by the Board
of Directors of the Company in good faith and evidenced by a resolution filed
with the Trustee; (ii) at least 80% of the consideration thereof received by the
Company or such Restricted Subsidiary, as the case may be, consists of (a) cash
or Permitted Short-Term Investments or (b) the assumption of Debt (other than
Subordinated Obligations) of the Company or such Restricted Subsidiary and the
release of the Company and the Restricted Subsidiaries, as applicable, from all
liability on the Debt assumed; and (iii) all Net Available Proceeds, less any
amounts invested within 180 days of such disposition in assets that comply with
Section 4.12, are applied within 180 days of such disposition:
(A) FIRST, to the permanent repayment or reduction of Debt then
outstanding under any Bank Credit Agreement or Vendor Financing
Facility (and a concomitant permanent reduction in the commitments, if
any, thereunder), to the extent such agreement or facility would
require such application or prohibit payments pursuant to the
following clause (B),
(B) SECOND, to the extent of remaining Net Available Proceeds, to
make an Offer to Purchase outstanding Notes at 100% of their principal
amount plus accrued and unpaid interest to the date of purchase
thereon and, to the extent required by the terms thereof, any other
Debt of the Company or a Restricted Subsidiary that ranks PARI PASSU
with the Notes at a price no greater than 100% of the principal amount
thereof plus accrued and unpaid interest to the date of purchase and
(C) THIRD, to the extent of any remaining Net Available Proceeds
following the completion of the offer to Purchase, to the repayment of
other Debt of the Company or Debt of a Restricted Subsidiary, to the
extent permitted under the terms thereof.
To the extent any Net Available Proceeds remain after such uses, the Company and
the Restricted Subsidiaries may use such amounts for any purposes not prohibited
by this Indenture. Notwithstanding the foregoing, these provisions shall not
apply to any Asset Disposition which constitutes a transfer, conveyance, sale,
lease or other disposition of all or substantially all of the Company's
properties or assets pursuant to Section 5.1(a).
(b) The Company 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 4.7. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.7, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.7 by virtue
thereof.
SECTION 4.8. TRANSACTIONS WITH AFFILIATES. (a) The Company may not,
and may not permit any Restricted Subsidiary, directly or indirectly, to enter
into any transactions (or series of related transactions) with an Affiliate or
Related Person of the Company (other than the Company or a Wholly-Owned
Restricted Subsidiary) (an "AFFILIATE TRANSACTION") unless:
(i) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary, as the case may be, with an
unrelated Person; and
(ii) the Company delivers to the Trustee (A) with respect to any
Affiliate Transaction involving aggregate consideration in excess of
$500,000, a certificate of the Chief Executive officer of the Company
to the effect that such Affiliate Transaction complies with clause (i)
above; and (B) with respect to any Affiliate Transaction involving
aggregate consideration in excess of $5 million, an opinion as to the
fairness to the Company or such Restricted Subsidiary, as the case may
be, of such Affiliate Transaction from a financial point of view
issued by an Independent Financial Advisor.
(b) Notwithstanding the foregoing Section 4.8(a), the following shall
be deemed not to be Affiliate Transactions:
(i) employee compensation arrangements entered into in the
ordinary course of business and approved by the Board of Directors of
the Company;
(ii) transactions solely between or among the Company and the
Restricted Subsidiaries;
(iii) Restricted Payments permitted by Section 4.5;
(iv) Investments by an Affiliate or Related Person of the Company
in the Capital Stock (other than Disqualified Stock) of the Company or
any Restricted Subsidiary; and
(v) transactions contemplated under the Plan of Reorganization.
SECTION 4.9. LIMITATION ON ISSUANCES AND SALES OF CAPITAL, STOCK OF
RESTRICTED SUBSIDIARIES. The Company may not, and may not permit any Restricted
Subsidiary to, issue, transfer, convey, sell or otherwise dispose of any shares
of Capital Stock of a Restricted Subsidiary or securities convertible or
exchangeable into, or options, warrants, rights or any other interest with
respect to, Capital Stock of a Restricted Subsidiary to any person other than
the Company or a Wholly-Owned Restricted Subsidiary except (i) in a transaction
consisting of a sale of all the Capital Stock of such Restricted Subsidiary and
that complies with the provisions of Section 4.7 to the extent such provisions
apply; (ii) if required, the issuance, transfer, conveyance, sale or other
disposition of directors, qualifying shares; (iii) in a transaction in which, or
in connection with which, the Company or a Restricted Subsidiary acquires at the
same time sufficient Capital Stock of such Restricted Subsidiary to at least
maintain the same percentage ownership interest it had prior to such
transaction; and (iv) Disqualified Stock of a Restricted Subsidiary Incurred to
Refinance Disqualified Stock of such Restricted Subsidiary; PROVIDED, however,
that the amounts of the redemption obligations of such Disqualified Stock shall
not exceed the amounts of the redemption obligations of, and such Disqualified
Stock shall have redemption obligations no earlier than those required by, the
Disqualified Stock being Refinanced.
SECTION 4.10. CHANGE OF CONTROL. (a) Upon the occurrence of a Change
of Control, each Holder of Notes shall have the right to require that the
Company repurchase such Holder's Notes at a purchase price in cash equal to 101%
of the principal amount thereof plus accrued and unpaid interest to 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).
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee stating:
(i) that a Change of Control has occurred and that such Holder
has the right to require the Company to purchase such Holder's Notes
at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest to the date of purchase
(subject to the right of Holders of record on the relevant record date
to receive interest on the relevant interest payment date);
(ii) the circumstances and relevant facts regarding such Change
of Control (including information with respect to pro forma historical
income, cash flow and capitalization, each after giving effect to such
Change of Control);
(iii) the repurchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(iv) the instructions determined by the Company, consistent with
this Section 4.10, that a Holder must follow in order to have its
Notes purchased.
(c) Holders electing to have a Note purchased will be required to
surrender the Note, with an appropriate form duly completed, to the Company at
the address specified in the notice at least three Business Days prior to the
purchase date. Holders will 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 facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note which was delivered for purchase by the
Holder and a statement that such Holder is withdrawing his election to have such
Note purchased.
(d) on the purchase date, all Notes purchased by the Company under
this Section shall be delivered by the Trustee for cancellation, and the Company
shall pay the purchase price plus accrued and unpaid interest, if any, to the
Holders entitled thereto.
(e) The Company 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. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.11. LIMITATION ON LIENS. The Company may not, and may not
permit any Restricted Subsidiary, directly or indirectly, to Incur or permit to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except for the following Liens (each, a "PERMITTED LIEN"):
(i) Liens to secure the Debt outstanding at any time under the
Revolving Credit Agreement or the Senior Secured Notes, subject to the
Intercreditor Agreement;
(ii) Liens to secure up to $5 million of other Debt permitted to
be Incurred under this Indenture so long as effective provision is
made to secure the Notes on a senior basis to the obligations so
secured;
(iii) Liens under the Security Documents;
(iv) Liens in favor of the Company;
(v) Liens on property or shares of Capital Stock of another
Person at the time such other Person becomes a Subsidiary of such
Person; PROVIDED, HOWEVER, that such Liens are not created, incurred
or assumed in connection with, or in contemplation of, such other
Person becoming such a Subsidiary; PROVIDED FURTHER, HOWEVER, that
such Lien may not extend to any other property owned by such Person or
any of its Subsidiaries (other than inventory and receivables
generated in the ordinary course of business and substitute property);
(vi) Liens on property at the time such Person or any of its
Subsidiaries acquires such property, including any acquisition by
means of a merger or consolidation with or into such Person or a
Subsidiary of such Person; PROVIDED, HOWEVER, that such Liens are not
created, incurred or assumed in connection with, or in contemplation
of, such acquisition; PROVIDED FURTHER, HOWEVER, that the Liens may
not extend to any other property owned by such Person or any of its
Subsidiaries;
(vii) Liens securing Debt Incurred pursuant to clause (ix) of
Section 4.3(b); PROVIDED, HOWEVER, that the Lien may not extend to any
assets owned by the Company or any Restricted Subsidiary other than
(a) the assets being financed or refinanced and income and proceeds
therefrom and (b) any other assets of such obligor securing other Debt
of such obligor to the same secured party;
(viii) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
(ix) Liens existing on the Issue Date;
(x) Liens to secure any Refinancing Debt incurred to refinance
any Debt secured by any Lien referred to in the foregoing clauses (i)
through (ix), as the case may be, at the time the original Lien became
a Permitted Lien;
(xi) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded; PROVIDED, HOWEVER, that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been
made therefor;
(xii) Carriers', warehousemens', mechanics', landlords'
materialmens', repairmens' or other like Liens arising in the ordinary
course of business is respect of obligations not overdue for a period
in excess of 60 days or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
PROVIDED, HOWEVER, that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor;
(xiii) purchase money Liens solely on the asset being acquired;
PROVIDED that each such Lien does not secure Debt in excess of $-----;
(xiv) Liens arising from precautionary UCC financing statement
filings;
(xv) statutory and common law landlords' liens under leases to
which the Company or any of its Subsidiaries is a party;
(xvi) Easements, rights-of-way, zoning and similar restrictions
and other similar encumbrances or title defects incurred, or leases or
subleases granted to others, in the ordinary course of business, which
do not in any case materially detract from the value of the property
subject thereto or do not interfere with or adversely affect in any
material respect the ordinary conduct of the business of the Company
and its Restricted Subsidiaries taken as a whole;
(xvii) any attachment or judgment Lien not constituting an Event
of Default under clause (9) of the first paragraph of Section 6.1;
(xviii) Liens incurred in the ordinary course of business of the
Company and the Restricted Subsidiaries with respect to obligations
that do not exceed $1 million at any one time outstanding and that:
(A) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business); and
(B) do not in the aggregate materially detract from the
value of the property or materially impair the use thereof in the
operation of business by the Company and the Restricted
Subsidiaries.
SECTION 4.12. BUSINESS ACTIVITIES. The Company may not, and may not
permit any Restricted Subsidiary to, engage in any business other than that
which it is carrying on at the date hereof.
SECTION 4.13. MAINTENANCE OF INSURANCE.
(a) The Company will and will cause each of its Restricted
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to the respective properties and businesses of the
Company and its Restricted Subsidiaries against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.
(b) In the event that the Company or any of its Restricted
Subsidiaries receives any proceeds of any insurance that they are required to
maintain pursuant to this Section 4.13, such proceeds shall constitute
"INSURANCE PROCEEDS". Promptly following the receipt of any Insurance Proceeds,
the Company shall apply such Insurance Proceeds in accordance with the
provisions of Section 4.7; PROVIDED, HOWEVER, that Insurance Proceeds shall only
be required to be so applied to the extent that the aggregate amount of all
Insurance Proceeds received by the Company exceeds $1 million in any 12-month
period.
SECTION 4.14. COMPLIANCE CERTIFICATES; STATEMENT BY OFFICERS AS TO
DEFAULT. The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate, one of the signers
of which shall be the principal executive, principal financial or principal
accounting officer of the Company, stating that in the course of the performance
by the signers of their duties as officers of the Company they would normally
have knowledge of any Default and whether or not the signers know of any Default
that occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or propose to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).
SECTION 4.15. NOMINATION OF CLASS A DIRECTORS. On or prior to the
90th day prior to the date on which the Company shall file with the Commission a
proxy statement to be sent to the stockholders of the Company in connection with
a meeting of the Company's stockholders to re-elect the Class A Directors (the
"PROXY STATEMENT"), the Company shall mail a notice to each Holder, with a copy
to the Trustee, stating that the Company shall nominate for re-election the
Class A Directors then serving on the Company's Board of Directors (the "CLASS A
DIRECTORS RE-ELECTION NOTICE"), subject to receiving the notice provided for in
the following sentence. The Holders of at least [a majority] in principal amount
of the Notes then outstanding shall have the right to notify the Company in
writing within 60 days from the date the Company mails the Class A Directors
Re-election Notice to the Holders that the Company shall nominate one or two
other named individuals (each a "REPLACEMENT DIRECTOR") to serve as the Class A
Directors in place of a specified then serving Class A Directors or both then
serving Class A Directors, as the case may be (a "HOLDERS NOTICE OF REPLACEMENT
CLASS A DIRECTORS"). Upon receipt of a Holders Notice of Replacement Class A
Directors, the Company shall nominate each Replacement Director for election as
a Class A Director and shall recommend in the Proxy Statement that the Company's
stockholders vote in favor of each such Replacement Director.
SECTION 4.16. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.17. CALCULATION OF ORIGINAL ISSUE DISCOUNT. The Company
shall file with the Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of original issue discount (including daily
rates and accrual periods) accrued on outstanding Notes as of the end of such
year and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Code, as amended from time to time.
ARTICLE 5.
SUCCESSOR COMPANY
SECTION 5.1. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. (a) The
Company may not consolidate with or merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, all or substantially all
its assets to any Person; PROVIDED, HOWEVER, that the Company may consolidate
with or merge with or into, or convey, transfer or lease, in one transaction or
a series of transactions, all or substantially all its assets to any Person, if:
(i) the resulting, surviving or transferee Person (the "SUCCESSOR
COMPANY") shall be a Person organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Notes and this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Debt which becomes an obligation of the Successor Company
or any Subsidiary as a result of such transaction as having been
Incurred by the Successor Company or such Subsidiary at the time of
such transaction), no Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of Debt
pursuant to Section 4.3(a);
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount that
is not less than the Consolidated Net Worth of the Company immediately
prior to such transaction; and
(v) prior to such transaction, the Company shall have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such transaction and such supplemental indenture (if
any) comply with this Indenture.
The Successor Company shall be the successor to the Company and shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture, and the Company (other than in the case of a
lease) shall be released from the obligation to pay the principal of and
interest on the Notes.
(b) The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless: (i) the resulting, surviving or transferee Person (if not
such Subsidiary) shall be a Person organized and existing under the laws of the
jurisdiction under which such Subsidiary was organized or under the laws of the
United States of America, or any State thereof or the District of Columbia, and
such Person shall expressly assume, by a guarantee agreement in a form
acceptable to the Trustee, all the obligations of such Subsidiary, if any, under
its Subsidiary Guarantee; (ii) immediately after giving effect to such
transaction or transactions on a pro forma basis (and treating any Debt which
becomes an obligation of the resulting, surviving or transferee Person as a
result of such transaction as having been issued by such Person at the time of
such transaction), no Default shall have occurred and be continuing; and (iii)
the Company delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
guarantee agreement, if any, complies with this Indenture.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT. An "EVENT OF DEFAULT" occurs if:
(1) the Company defaults in any payment of interest on any Note
when the same becomes due and payable, and such default continues for
a period of 30 days;
(2) the Company (i) defaults in the payment of the principal of
any Note when the same becomes due and payable at its Stated Maturity,
upon optional redemption, upon required repurchase, upon declaration
or otherwise, or (ii) fails to redeem or purchase Notes when required
pursuant to this Indenture or the Notes;
(3) the Company fails to comply with Section 5.1;
(4) the Company fails to comply with Section 4.2, 4.3, 4.4, 4.5,
4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15 or 4.17 (other than a
failure to purchase Notes when required under Section 4.7 or 4.10) and
such failure continues for 30 days after the notice specified below;
(5) the Company fails to comply with any of its agreements in the
Notes or this Indenture (other than those referred to in clause (1),
(2), (3) or (4) above) and such failure continues for 60 days after
the notice specified below;
(6) Debt of the Company or any Significant Subsidiary is not paid
within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Debt unpaid or accelerated exceeds $1 million;
(7) any Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it
in an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or
any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of
$1 million, or its foreign currency equivalent at the time is entered
against the Company or any Significant Subsidiary, remains outstanding
for a period of 60 days following the entry of such judgment or decree
and is not discharged, waived or the execution thereof stayed within
10 days after the notice specified below; or
(10) a Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guarantee)
or a Subsidiary Guarantor denies or disaffirms its obligations under
its Subsidiary Guarantee.
The foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
The term "BANKRUPTCY LAW" means Title 11 of the United States Code, or
any similar Federal or state law for the relief of debtors. The term "CUSTODIAN"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clauses (4), (5), or (9) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
outstanding Notes notify the Company of the Default and the Company does not
cure such Default, or it is not waived, within the time specified after receipt
of such notice. Such notice must specify the Default, demand that it be
remedied, to the extent consistent with law, and state that such notice is a
"NOTICE OF DEFAULT".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
propose to take with respect thereto.
SECTION 6.2. ACCELERATION. If an Event of Default (other than an Event
of Default specified in Section 6.1(7) or (8) with respect to the Company)
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in principal amount of the Notes by notice to the Company and
the Trustee, may declare the principal of and accrued but unpaid interest on all
the Notes to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.1(7) or (8) with respect to the Company occurs, the principal of
and interest on all the Notes shall IPSO FACTO become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holders. The Holders of a majority in principal amount of the Notes by notice to
the Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of acceleration. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.3. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative.
SECTION 6.4. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the Notes by notice to the Trustee may waive an existing
Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Note or (ii) a Default in respect of a provision
that under Section 9.2 cannot be amended without the consent of each Holder
affected. When a Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or impair any consequent right.
SECTION 6.5. CONTROL BY MAJORITY. The Holders of a majority in
principal amount of the Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.1, that the Trustee determines is unduly prejudicial to the
rights of other Holders or would involve the Trustee in personal liability or
expense for which the Trustee has not received a satisfactory indemnity
therefore; PROVIDED, HOWEVER, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to reasonable
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
SECTION 6.6. LIMITATION ON SUITS. A Holder may pursue a remedy with
respect to this Indenture or the Notes only if:
(1) the Holder gives to the Trustee notice of a continuing Event
of Default;
(2) the Holders of at least 25% in principal amount of the Notes
make a request to the Trustee to pursue the remedy;
(3) the Trustee either (i) gives to such Holders notice that it
will not comply with the request, or (ii) does not comply with the
request within 60 days after receipt of the request; and
(4) the Holders of a majority in principal amount of the Notes do
not give the Trustee a direction inconsistent with the request prior
to the earlier of the date, if ever, on which the Trustee delivers a
notice under Section 6.6(3)(i) or the expiration of the period
described in Section 6.6(3)(ii).
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 6.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Notes held by such Holder, on or after the
respective due dates expressed in the Notes, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.8. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders approved or
allowed in any judicial proceedings relative to the Company, its creditors or
its property and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any proceeding.
SECTION 6.10. PRIORITIES. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section. At least 15 days before such record date, the Company
shall mail to each Holder and the Trustee a notice that states the record date,
the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys, fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by
Holders of more than 10% in principal amount of the Notes.
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. The Company (to the
extent they may lawfully do so) shall not at any time insist upon, or plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that they may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 6.13. ACTIONS OF A HOLDER. For purposes of providing any
consent, waiver or instruction to the Company or the Trustee, a "Holder" shall
include a Person who provides to the Company or the Trustee, as the case may be,
an affidavit of beneficial ownership of a Note together with a satisfactory
indemnity against any loss, liability or expense to such party to the extent
that it acts upon such affidavit of beneficial ownership (including any consent,
waiver or instructions given by a Person providing such affidavit and
indemnity).
ARTICLE 7.
TRUSTEE
SECTION 7.1. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(i) The Trustee is hereby authorized and directed to acknowledge,
enter into, execute and deliver, as the case may be, and to perform all of its
obligations and exercise its rights under the following documents, which
documents shall be incorporated into this Indenture by reference:
(1) the Guarantor Security Agreement;
(2) the Intercreditor Agreement;
(3) the Mortgage;
(4) the Pledge Agreement;
(5) the Security Agreement; and
(6) the TSP Pledge Agreement.
SECTION 7.2. RIGHTS OF TRUSTEE. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; PROVIDED, HOWEVER, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer has actual knowledge thereof or unless
written notice of any event which is in fact such a default is received by the
Trustee at the principal corporate trust office of the Trustee, and such notice
references the Notes and this Indenture.
(g) Except in connection with compliance with Sections 7.10 and 7.11,
the Trustee shall only be charged with knowledge of Trust Officers.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustee's
certificate of authentication.
SECTION 7.5. NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each Holder notice
of the Default within 90 days after it occurs. Except in the case of a Default
in payment of principal of or interest on any Note (including payments pursuant
to the mandatory redemption provisions of such Note, if any), the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of Holders.
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS. If required by TIA ss.
313(a), as promptly as practicable after each __________ beginning with the
__________, __________, and in any event prior to __________ in each year, the
Trustee shall mail to each Holder a brief report dated as of that __________
complies with such TIA ss. 313(a). The Trustee also shall comply with TIA ss.
313(b).
A copy of each report at the time of its mailing to Holders shall be
filed with the Commission and each stock exchange (if any) on which the Notes
are listed. The Company agrees to notify promptly the Trustee whenever the Notes
become listed on any stock exchange and of any delisting thereof.
SECTION 7.7. COMPENSATION AND INDEMNITY. Company shall pay to the
Trustee from time to time reasonable compensation for its services (including
for any agent capacity in which it acts). The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Company shall indemnify
the Trustee against any and all loss, damage, claim, liability or reasonable
expense (including reasonable attorneys, fees and expenses) incurred by it
(including for any agent capacity in which it acts) in connection with the
acceptance or administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.8. REPLACEMENT OF TRUSTEE. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Notes may remove the Trustee by so notifying the Trustee and may appoint
a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Notes and such Holders do not reasonably
promptly appoint a successor Trustee, or if a vacancy exists in the office of
Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Notes may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, PROVIDED THAT such corporation or
banking association shall be eligible under this Article 7 and TIA ss. 310(a).
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company is
outstanding if the requirements for such exclusion set forth in TIA ss. 310 (b)
(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8.
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE. (a) When (i)
the Company delivers to the Trustee all outstanding Notes (other than Notes
replaced pursuant to Section 2.7) for cancellation or (ii) all outstanding Notes
have become due and payable, whether at maturity or as a result of the mailing
of a notice of redemption pursuant to Article 3 hereof and the Company
irrevocably deposits with the Trustee funds sufficient to pay at maturity or
upon redemption all outstanding Notes, including interest thereon to maturity or
such redemption date (other than Notes replaced pursuant to Section 2.7), and if
in either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Sections 8.1(c), cease to be of further
effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officers, Certificate and
an Opinion of Counsel and at the cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all its obligations under the Notes and this Indenture ("LEGAL
DEFEASANCE OPTION") or (ii) its obligations under Sections 4.2, 4.3, 4.4, 4.5,
4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15 and 4.17 and the operation of
Sections 6.1(4), 6.1(6), 6.1(7), 6.1(8), 6.1(9) and 6.1(10) (but, in the case of
Sections 6.1(7) and (8), with respect only to Significant Subsidiaries) and the
limitations contained in Sections 5.1(a)(iii) and (iv) ("COVENANT DEFEASANCE
OPTION"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Notes may not be accelerated because of an Event of Default specified in
Sections 6.1(4), 6.1(6), 6.1(7), 6.1(8), 6.1(9) and 6.1(10) (but, in the case of
Sections 6.1(7) and (8), with respect only to Significant Subsidiaries) or
because of the failure of the Company to comply with Section 5.1(a)(iii) or
(iv). If the Company exercises its legal defeasance option or its covenant
defeasance option, (i) each Subsidiary Guarantor, if any, shall be released from
all its obligations with respect to its Subsidiary Guarantee, (ii) all rights of
the Trustee or the Holders under any of the Security Documents shall terminate
and (iii) the Company's obligations under Section 3.8 shall terminate.
Upon satisfaction of the conditions set forth in Section 8.2, the
Trustee shall acknowledge in writing the discharge of those obligations that the
Company terminates under the Indenture, the release of the Subsidiary Guarantees
and the termination of such rights under the Security Documents.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 7.7 and 7.8 and in this
Article 8 shall survive until the Notes have been paid in full. Thereafter, the
Company's obligations in Sections 7.7, 8.4 and 8.5 shall survive.
SECTION 8.2. CONDITIONS TO DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or Defeasance Obligations for the payment of principal of and
interest on the Notes to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited Defeasance Obligations plus any
deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay principal and interest
when due on all the Notes to maturity or redemption, as the case may
be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.1(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the Company delivers to the Trustee an opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the Issue Date there
has been a change in the applicable Federal income tax law, in either
case to the effect that, and based thereon, such Opinion of Counsel
shall confirm that, the Holders will not recognize income, gain or
loss for Federal income tax purposes as a result of such defeasance
and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance
and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
to the defeasance and discharge of the Notes as contemplated by this
Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Notes at a future date in
accordance with Article 3.
SECTION 8.3. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or Defeasance Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from Defeasance Obligations
through the Paying Agent and in accordance with this Indenture to the payment of
principal of and interest on the Notes.
SECTION 8.4. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon written request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Holders entitled to the money must look to the Company for payment
as general creditors.
SECTION 8.5. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited Defeasance Obligations or the principal and
interest received on such Defeasance obligations.
SECTION 8.6. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money or Defeasance Obligations in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 8 until such time as the Trustee or Paying Agent is permitted to
apply all such money or Defeasance Obligations in accordance with this Article
8; PROVIDED, HOWEVER, that, if the Company has made any payment of interest on
or principal of any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or Defeasance Obligations held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENTS
SECTION 9.1. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee
may amend this Indenture or the Notes without notice to or consent of any
Holder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes; PROVIDED, HOWEVER, that the
uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Notes are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Notes, including any
Subsidiary Guarantees, or to secure the Notes or to release such
guarantees in accordance with the terms of Section 4.4;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the Commission in
connection with qualifying, or maintaining the qualification of, this
Indenture under the TIA; or
(7) to make any change that does not adversely affect the rights
of any Holder.
After an amendment under this Section becomes effective, the Company
shall mail to Holders a notice briefly describing such amendment. The failure to
give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
SECTION 9.2. WITH CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture or the Notes without notice to any Holder but with the
written consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including consents obtained in connection with a tender
offer or exchange for the Notes). However, without the consent of each Holder
affected thereby, an amendment may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest
on any Note;
(3) reduce the principal of or extend the Stated Maturity of any
Note;
(4) reduce the premium payable upon the redemption of any Note or
change the time at which any Note may be redeemed in accordance with
Article 3;
(5) make any Note payable in money other than that stated in the
Note;
(6) make any change in Section 6.4 or 6.7 or the second sentence
of this Section; or
(7) make any change in any Subsidiary Guarantee that would
adversely affect the Holders.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Holders a notice briefly describing such amendment. The failure to
give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
SECTION 9.3. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Notes shall comply with the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A consent
to an amendment or a waiver by a Holder of a Note shall bind the Holder and
every subsequent Holder of that Note or portion of the Note that evidences the
same debt as the consenting Holder's Note, even if notation of the consent or
waiver is not made on the Note. However, any such Holder or subsequent Holder
may revoke the consent or waiver as to such Holder's Note or portion of the Note
if the Trustee receives the notice of revocation before the date the amendment
or waiver becomes effective. After an amendment or waiver becomes effective, it
shall bind every Holder. An amendment or waiver becomes effective upon the
execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.5. NOTATION ON OR EXCHANGE OF NOTES. If an amendment changes
the terms of a Note, the Trustee may require the Holder of the Note to deliver
it to the Trustee. The Trustee may place an appropriate notation on the Note
regarding the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Note shall
issue and the Trustee shall authenticate a new Note that reflects the changed
terms. Failure to make the appropriate notation or to issue a new security shall
not affect the validity of such amendment.
SECTION 9.6. TRUSTEE TO SIGN SUCH AMENDMENTS. The Trustee shall sign
any amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.7. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend (and,
if appropriate, tender their Notes) in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement.
ARTICLE 10.
SECURITY
SECTION 10.1. SECURITY DOCUMENTS.
The due and punctual payment of the principal and premium, if any, of,
and interest on, the Notes when and as the same shall be due and payable, by
acceleration, repurchase, redemption or otherwise, interest on the overdue
principal of and interest (to the extent permitted by law), if any, on the Notes
and under this Indenture, performance of all other Obligations with respect to
the Notes, shall be secured as provided in the Security Documents.
The Trustee, the Company and the Subsidiary Guarantors hereby consent
and agree that, with respect to that portion of the Collateral in which the
security interest is being perfected by possession, the Revolving Credit Agent
and/or the Senior Secured Notes Agent shall hold the Collateral for the benefit
of the Trustee in accordance with the terms of the Intercreditor Agreement, for
the purpose of perfecting the Trustee's security interest therein [for so long
as any obligations or commitments outstanding under the Revolving Credit
Agreement or the obligations under the Senior Secured Notes].
The Company shall, and shall cause each of its Restricted Subsidiaries
to, do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Security Documents, to
assure and confirm to the Collateral Agent the security interest in the
Collateral contemplated hereby and by the Security Documents, as from time to
time constituted, so as to render the same available for the security and
benefit of this Indenture and of the Notes secured hereby and thereby, according
to the intent and purposes herein and therein expressed. The Company shall, and
shall cause each of its Restricted Subsidiaries to, take, upon request of the
Trustee or the Collateral Agent, any and all actions required to cause the
Security Documents to create and maintain, as security for the Obligations,
valid and enforceable, perfected (except as expressly provided herein or
therein), Liens in and on all the Collateral, in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons, and subject to no
other Liens, other than as provided herein and therein.
Each Holder of a Note, by its acceptance thereof, consents and agrees
to the terms of the Security Documents and the Intercreditor Agreement
(including, without limitation, the provisions providing for the foreclosure and
release of Collateral and indemnification of the Collateral Agent) as the same
may be in effect or may be amended from time to time in accordance with their
terms, and authorizes and directs (i) the Collateral Agent, with respect to each
of the Security Documents, and (ii) the Trustee, with respect to the
Intercreditor Agreement, to perform their respective obligations and exercise
their respective rights thereunder in accordance therewith; PROVIDED, HOWEVER,
that upon qualification of this Indenture with the TIA, if any provision of the
Intercreditor Agreement limits, qualifies or conflicts with the duties imposed
by the provisions of the TIA, the TIA shall control.
SECTION 10.2. OPINIONS OF COUNSEL.
To the extent required by the TIA, the Company shall furnish to the
Trustee on the Issue Date and within _____ days after each anniversary of the
Issue Date, an Opinion of Counsel, dated as of such date, stating either that
(i) in the opinion of such counsel, all action has been taken with respect to
the recording, registering, filing, re-recording, re-registering and refiling of
all supplemental indentures, financing statements, continuation statements or
other instruments of further assurance as is necessary to maintain the Liens of
the Security Documents and reciting the details of such action or (ii) in the
opinion of such counsel, no such action is necessary to effect and maintain the
validity and perfection of such Liens in full force and effect.
SECTION 10.3. RELEASE AND SUBSTITUTION OF COLLATERAL.
(a) Subject to subsections (b), (c) and (d) of this Section 10.3, (i)
in the event that any Collateral is sold, transferred or otherwise disposed of
in an Asset Disposition (including the application of Insurance Proceeds) or any
other transaction permitted by this Indenture, such Collateral shall,
concurrently with the disposition of such Collateral automatically be released
from the Lien of the relevant Security Documents and (ii) the Company and its
Subsidiaries may (but shall not be required to) from time to time substitute
property or securities released from the Lien of the Security Documents in
connection with the sale, transfer or other disposition thereof for other
property or securities to be subjected to the Lien of the Security Documents, in
each case in accordance with the provisions of the Security Documents and as
provided hereby.
(b) At any time when an Event of Default shall have occurred and be
continuing and the maturity of the Notes shall have been accelerated (whether by
declaration or otherwise) and such acceleration shall not have been rescinded or
annulled, no release of Collateral pursuant to the provisions of this Indenture
or of the Security Documents shall be effective as against the Holders of the
securities without the consent of the Collateral Agent. The Trustee shall
promptly notify the Collateral Agent of any rescission or annulment, pursuant to
Section 6.4 hereof, of an acceleration of the Notes.
(c) The release of any Collateral from the terms of the Security
Documents will not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Collateral is
released pursuant to the Security Documents. At all time after qualification of
this Indenture under the TIA, to the extent applicable, the Company shall cause
TIA Section 314(d) relating to the release of property or securities from the
Lien of the Security Documents and relating to the substitution therefor of any
property or securities to be subjected to the Lien of the Security Documents to
be complied with. Any certificate or opinion required by TIA Section 314(d) may
be made by Officers of the Company, except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person shall be an independent engineer, appraiser or other expert
selected or approved by the Trustee in the exercise of reasonable care.
SECTION 10.4. CERTIFICATES OF THE COMPANY.
The Company shall furnish to the Trustee prior to each proposed
release of Collateral all documents required by TIA Section 314(d). The Trustee
may, to the extent permitted by Sections 7.1 and 7.2 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such instruments. Any certificate or opinion required by
TIA Section 314(d) may be made by Officers of the Company except in cases where
TIA Section 314(d) requires that such certificate or opinion be made by an
independent engineer, appraiser or other such expert within the meaning of TIA
Section 314(d).
SECTION 10.5. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE
UNDER THE SECURITY DOCUMENTS.
Subject to the provisions of the Security Documents and the
Intercreditor Agreement, the Trustee may, in its sole discretion and without the
consent of the Holders, on behalf of the Holders, take all actions it deems
necessary or appropriate in order to (a) enforce any of the terms of the
Security Documents and (b) collect and receive any and all amounts payable in
respect of the Obligations. The Trustee shall have the power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts that may be unlawful or in violation of
the Security Documents or to preserve or protect its interest and the interests
of the Holders in the Collateral (including power to institute and maintain
suits or proceedings to restrain the enforcement of or compliance with any
legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of or compliance with
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders or the Trustee).
SECTION 10.6. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER
THE SECURITY DOCUMENTS.
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture and the Security Documents.
SECTION 10.7. RELEASE UPON TERMINATION OF THE OBLIGATIONS.
(a) If (i) the Company delivers Officers' Certificates certifying that
all of its obligations under this Indenture have been indefeasably satisfied and
discharged by complying with the provisions of Article 8 or (ii) all outstanding
Notes issued under this Indenture shall be surrendered to the Trustee for
cancellation and an Opinion of Counsel that the delivery of such a notice is
authorized, the Trustee shall deliver to the Collateral Agent a notice stating
that the Trustee, for itself and on behalf of the Holders, disclaims and has
given up any and all rights it has in or to the Collateral, and any rights it
has under the Security Documents, and, upon and after the receipt by the
Collateral Agent of such notice, the Collateral Agent shall no longer be deemed
to hold the Lien in the Collateral on behalf of the Trustee for the benefit of
itself and the Holders.
(b) Any release of Collateral made in compliance with this Section
10.7 shall not be deemed to impair the Lien under the Security Documents or the
Collateral thereunder in contravention of the provisions of this Indenture or
the Security Documents.
ARTICLE 11.
SUBSIDIARY GUARANTEES
SECTION 11.1. GUARANTEES. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Notes when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under this Indenture and the securities and (b) the
full and punctual performance within applicable grace periods of all other
obligations of the Company under this Indenture and the Notes (all the foregoing
being hereinafter collectively called the "OBLIGATIONS"). Each Subsidiary
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice or further assent from such Subsidiary
Guarantor and that such Subsidiary Guarantor will remain bound under this
Article 11 notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Notes or the Obligations. The Obligations of each Subsidiary
Guarantor hereunder shall not be affected by (a) the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under this Indenture, the Notes or any
other agreement or otherwise; (b) any extension or renewal of any thereof; (c)
any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Notes or any other agreement; (d) the release
of any security held by any Holder or the Trustee for the Obligations or any of
them; (e) the failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of the Obligations; or (f) any change in the
ownership of the Company.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Obligations.
Except as expressly set forth in Sections 8.1(b), 11.2 and 11.6, the
obligations of each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
Obligations of each Subsidiary Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Notes or any other agreement, by any waiver or modification of any thereof, by
any default, failure or delay, willful or otherwise, in the performance of the
obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
such Subsidiary Guarantor or would otherwise operate as a discharge of such
Subsidiary Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Guarantee herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any obligation
is rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other obligation, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid amount of such obligations, (ii) accrued and unpaid
interest on such Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations to the Holders and the Trustee.
Each Subsidiary Guarantor agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
Obligations Guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of such Subsidiary Guarantor's Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such Obligations as provided in
Article 6, such Obligations (whether or not due and payable) shall forthwith
become due and payable by such Subsidiary Guarantor for the purposes of this
Section.
Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys, fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Section.
SECTION 11.2. LIMITATION ON LIABILITY. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum, aggregate amount of the
obligations guaranteed hereunder by any Subsidiary Guarantor shall not exceed
the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 11.3. SUCCESSORS AND ASSIGNS. This Article 11 shall be binding
upon each Subsidiary Guarantor and its successors and assigns and shall ensure
to the benefit of the successors and assigns of the Trustee and the Holders and,
in the event of any transfer or assignment of rights by any Holder or the
Trustee, the rights and privileges conferred upon that party in this Indenture
and in the Notes shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions of this Indenture.
SECTION 11.4. NO WAIVER. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 11 at law,
in equity, by statute or otherwise.
SECTION 11.5. MODIFICATION. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 11.6. RELEASE OF SUBSIDIARY GUARANTOR. Upon the sale or other
disposition (including by way of consolidation or merger) of a Subsidiary
Guarantor or the sale or disposition of all or substantially all the assets of
such Subsidiary Guarantor (in each case other than to the Company or an
Affiliate of the Company), such Subsidiary Guarantor shall be deemed released
from all Obligations under this Article 11 without any further action required
on the part of the Trustee or any Holder. At the request of the Company, the
Trustee shall execute and deliver an appropriate instrument evidencing such
release.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.1. TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 12.2. NOTICES. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail addressed as follows:
if to the Company:
Planet Hollywood International, Inc.
8669 Commodity Circle
Orlando, Florida 32819
Attention:
Facsimile:
if to the Trustee:
United States Trust Company of New York
Corporate Trust & Agency Division
114 West 47th Street, 25th Floor
New York, New York 10036-1532
Attention: Corporate Trust Administration
Facsimile: (212) 852-1627
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to the
Holder at the Holder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 12.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders may
communicate pursuant to TIA ss. 312(b) with other Holders with respect to their
rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA ss. 312(c).
SECTION 12.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 12.6. WHEN NOTES DISREGARDED. In determining whether the
Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so disregarded. Also, subject to the foregoing, only Notes outstanding at the
time shall be considered in any such determination.
SECTION 12.7. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 12.8. LEGAL HOLIDAYS. A "LEGAL HOLIDAY" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 12.9. GOVERNING LAW. This Indenture and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New York
but without giving effect to applicable principles of conflicts of law to the
extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 12.10. NO RECOURSE AGAINST OTHERS. Any past, present or future
director, officer, partner (including any general partner) employee,
incorporator or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Notes or this Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Note, each Holder shall waive and release all
such liability. The waiver and release shall be part of the consideration for
the issue of the Notes.
SECTION 12.11. SUCCESSORS. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.
SECTION 12.12. MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 12.13. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
PLANET HOLLYWOOD INTERNATIONAL, INC.,
By__________________________
Name:
Title:
[NAMES OF SUBSIDIARY GUARANTORS]
On behalf of each of the above
Subsidiary Guarantors
By__________________________
Name:
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By__________________________
Name:
Title:
<PAGE>
Exhibit A
[The face of the Notes shall
be substantially as follows:]
THIS NOTE IS SUBJECT TO AN INTERCREDITOR AND SUBORDINATION AGREEMENT DATED AS OF
FEBRUARY __, 2000 BY AND AMONG THE CIT GROUP/BUSINESS CREDIT, INC., BAY HARBOUR
MANAGEMENT L.C., AND UNITED STATES TRUST COMPANY OF NEW YORK WHICH MATERIALLY
AFFECTS CERTAIN PAYMENT RIGHTS, SUBORDINATES CERTAIN SECURITY INTERESTS AND
LIMITS RIGHTS TO ENFORCEMENT. ALL PERSONS OR OTHER ENTITIES WHICH AT ANY TIME
HOLD INDEBTEDNESS HEREUNDER ARE BOUND BY THE TERMS OF THE INTERCREDITOR
AGREEMENT WHICH WILL BE MADE AVAILABLE UPON REQUEST.
PLANET HOLLYWOOD INTERNATIONAL, INC.
10% Secured Deferrable Interest Notes Due 2005.
No. __________ $_____________ Initial Principal Amount
Interest Payment Dates: ________ and _________ of each year,
commencing ________, ___________
CUSIP No. ______________
PLANET HOLLYWOOD INTERNATIONAL, INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
________________________, or registered assigns, the Initial Principal Amount
set forth above (as the same may be increased through the compounding of
deferred interest as provided in the immediately succeeding paragraph) on
________ __, 2005 and to pay interest thereon from the date hereof, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on each Interest Payment Date in each year, at the
rate of 10% per annum, until the principal hereof is paid or duly provided for,
PROVIDED that any principal and premium, if any, and any such installment of
interest, which is overdue shall bear interest at the rate of 12.75% per annum
(to the extent that the payment of such interest shall be legally enforceable),
from the dates such amounts are due until they are paid or duly provided for,
and such interest shall be payable on demand.
Notwithstanding the foregoing, the Company shall be entitled to defer
and compound to principal the first four semi-annual installments of interest on
the Notes on the related Interest Payment Dates; PROVIDED that (i) to the extent
so deferred and compounded, such installments shall be calculated at the rate of
12.75% per annum (rather than 10% per annum) and (ii) if, as reflected in the
Company's financial statements for the most recently completed period of four
fiscal quarters (commencing with the first fiscal quarter after the Notes are
initially issued) for which such financial statements are available, the ratio
of the Company's Consolidated EBITDA to Consolidated Interest Expense for such
period is greater than 1.75 to 1.00, the Company shall not be entitled to defer
or compound the next succeeding semi-annual installments of interest pursuant to
the foregoing.
The interest so payable in cash, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on the last day of the calendar month
(whether or not a Business Day) next preceding such Interest Payment Date.
In the case of a default in payment of principal upon acceleration,
redemption or repurchase, the overdue principal and any overdue premium shall
bear interest at the rate of 12.75% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or duly provided for. Interest on any overdue principal or
premium shall be payable on demand. Any such interest on overdue principal or
premium which is not paid on demand shall bear interest at the rate of 12.75%
per annum (to the extent that the payment of such interest on interest shall be
legally enforceable), from the date of such demand until the amount so demanded
is paid or duly provided for, and such shall be payable on demand.
Payment in respect of the principal of (and premium, if any) and any
interest on this Note will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
or at such additional offices or agencies as the Company from time to time may
designate for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts, PROVIDED, HOWEVER, that payment of the principal of (and premium,
if any, on) this Note shall be made only upon presentation and surrender hereof
at any such office or agency and, at the option of the Company, payment of
interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Note Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
[SEAL] PLANET HOLLYWOOD INTERNATIONAL, INC.
By __________________________
Name:
Title:
Attest:
By __________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee, certifies that
this is one of the 10% Secured Deferrable Interest Notes Due 2005 referred to in
the Indenture dated as of _____ __, 2000 among Planet Hollywood International,
Inc., [Names of the Subsidiary Guarantors] and the Trustee.
By _________________________
Authorized Signatory
<PAGE>
[Form of Reverse of Note:]
This Note is one of a duly authorized issue of Notes of the Company
designated as its 10% Secured Deferrable Interest Notes Due 2005 (herein called
the "Notes"), limited in aggregate principal amount to $_________, issued and to
be issued under an Indenture, dated as of ______ __, 2000 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee (herein called the "Trustee" which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders and of the terms upon
which the Notes are, and are to be, authenticated and delivered. Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture.
To guarantee (a) the full and punctual payment of principal of and
interest on the Notes when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
this Indenture and the securities and (b) the full and punctual performance
within applicable grace periods of all other obligations of the Company under
this Indenture and the Notes, the Subsidiary Guarantors have unconditionally and
irrevocably guaranteed, jointly and severally, such obligations pursuant to the
terms of Article 11 of the Indenture.
The Notes are secured to the extent set forth in the Security
Documents and Article 10 of the Indenture.
At any time following the Issue Date, the Notes will be redeemable, in
whole or in part, at the option of the Company, upon not less than 30 and no
more than 60 days' prior notice, on any _______ __, _______.__, _______ __ or
_______ __ of any year at a redemption price equal to 100% of the principal
amount thereof PLUS accrued and unpaid interest, if any, to the date of
redemption.
If (i) [as reflected in the Company's financial statements for the
most recently completed period of four fiscal quarters (commencing with the
fiscal quarter in which the Notes are initially issued) for which such financial
statements are available], the ratio of the Company's Consolidated EBITDA to
Consolidated Interest Expense for [such four-quarter period] is greater than
2.00 to 1.00 and (ii) the sum of the Company's cash PLUS available commitments
under the Revolving Credit Agreement exceeds $25,000,000, then the Company shall
be required to use 50% of such excess amount to redeem the Notes, in whole or in
part, on the next Interest Payment Date, at a redemption price equal to 100% of
the principal amount thereof PLUS accrued and unpaid interest, if any, to the
date of redemption (a "Mandatory Redemption"); PROVIDED, HOWEVER, that the
Company shall not be required to make a Mandatory Redemption if such redemption
is not otherwise permitted by the Revolving Credit Agreement.
The Notes do not have the benefit of any sinking fund obligations.
Under the Indenture, the Company is obligated to make Offers to
Purchase Notes as described below:
(i) If a Change of Control occurs, the Company will be required
to make an Offer to Purchase all of the outstanding Notes at a
purchase price in cash equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, on such principal amount, to
the date of purchase; and
(ii) If the Company or any Restricted Subsidiary consummates an
Asset Disposition, under certain circumstances, the Company will be
required to make an Offer to Purchase up to all or a specified portion
of the Notes at a purchase price in cash equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, on
such principal amount to the date of purchase, in an aggregate
principal amount equal to any Net Available Proceeds from such an
Asset Disposition which are not used to make a permanent repayment or
reduction of (i) Debt then outstanding under any Bank Credit Agreement
or Vendor Financing Facility, to the extent such agreement or facility
would require such application or prohibit an Offer to Purchase Notes
or (ii) Debt then outstanding of the Company or a Restricted
Subsidiary that ranks PARI PASSU with the Notes at a price no greater
than 100% of the principal amount thereof plus accrued and unpaid
interest to the date of purchase.
In the event of redemption, or purchase pursuant to an Offer to
Purchase, of this Note in part only, a new Note or Notes for the unredeemed or
unpurchased portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire Debt of this Note and for defeasance of certain covenants (including
covenants relating to the making of Offers to Purchase the Notes) and Events of
Default with respect to this Note, in each case upon compliance with certain
conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, the Notes may be
declared due and payable, in the manner and with the effect provided in the
Indenture. Upon payment of (i) the principal of the Notes so declared due and
payable, any overdue premium and any overdue installment of interest in respect
of this Note and (ii) as provided on the face hereof, any interest on any
overdue principal, premium or interest in respect of this Note (to the extent
that the payment of such interest shall be legally enforceable), all of the
Company's obligations in respect of the payment of the principal of and any
premium and interest on this Note shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the outstanding Notes. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the outstanding Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
In addition, without the consent of any Holder, the Indenture and the Notes may
be amended and supplemented to cure any ambiguity or inconsistency, make other
changes which will not adversely affect in any material aspect the rights of the
Holders or certain other matters set forth in the Indenture. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver, or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the outstanding
Notes shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity and the Trustee shall not have received from the Holders of a majority
in principal amount of the outstanding Notes a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to certain suits described in the Indenture, including any suit
instituted by the Holder of this Note for the enforcement of any payment of
principal hereof or any premium or interest hereon on or after the respective
due dates expressed herein (or, in the case of redemption, on or after the
Redemption Date or, in the case of any purchase of this Note required to be made
pursuant to an Offer to Purchase, on or after the Purchase Date).
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Note
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Note Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
A director, officer, employee, stockholder or incorporator of the
Company shall not have any liability for any obligations of the Company under
this Note or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting this Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of this Note.
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Note shall be computed on the basis of a 360-day year
of twelve 30-day months.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law, but otherwise without regard to conflict
of laws rules.
<PAGE>
[FORM OF GUARANTEE]
THIS GUARANTEE IS SUBJECT TO AN INTERCREDITOR AND SUBORDINATION AGREEMENT DATED
AS OF FEBRUARY __, 2000 BY AND AMONG THE CIT GROUP/BUSINESS CREDIT, INC., BAY
HARBOUR MANAGEMENT L.C., AND UNITED STATES TRUST COMPANY OF NEW YORK WHICH
MATERIALLY AFFECTS CERTAIN PAYMENT RIGHTS, SUBORDINATES CERTAIN SECURITY
INTERESTS AND LIMITS RIGHTS TO ENFORCEMENT. ALL PERSONS OR OTHER ENTITIES WHICH
AT ANY TIME HOLD INDEBTEDNESS GUARANTEED HEREUNDER ARE BOUND BY THE TERMS OF THE
INTERCREDITOR AGREEMENT WHICH WILL BE MADE AVAILABLE UPON REQUEST.
Each Subsidiary Guarantor hereby unconditionally and irrevocably
guarantees jointly and severally, on a subordinated basis to the extent and in
the manner provided in the Intercreditor Agreement, to each Holder and to the
Trustee and its successors and assigns (a) the full and punctual payment of
principal of and interest on the Notes when due, whether at maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under this Indenture and the securities and (b) the full and
punctual performance within applicable grace periods of all other obligations of
the Company under the Indenture and the Notes (all the foregoing being
hereinafter collectively called the "OBLIGATIONS"). Each Subsidiary Guarantor
further agrees that the Obligations may be extended or renewed, in whole or in
part, without notice or further assent from such Subsidiary Guarantor and that
such Subsidiary Guarantor will remain bound under Article 11 of the Indenture
notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor further agrees that its Guarantee
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Obligations.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which this Guarantee is
notes shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
The terms of the Guarantees evidences hereby are qualified in their
entirety and remain subject to the terms of Article 11 of the Indenture, as such
Article may be amended, modified or changes from the date hereof, including but
not limited to the addition of additional Subsidiary Guarantors and the release
of existing Subsidiary Guarantors form their obligations under the Indenture.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflicts of
law.
[THE SIGNATURE PAGE FOLLOWS.]
<PAGE>
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this
instrument to be duly executed.
[NAMES OF SUBSIDIARY GUARANTORS]
On behalf of each of the above
Subsidiary Guarantors
By____________________________________
Name:
Title:
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to:
-----------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint:
-----------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Dated: __________________ Your Signature: _______________________________
(sign exactly as name appears on
the other side of this Note)
Signature Guarantee: ___________________________________
(Signature must be guaranteed by a financial institution that is a
member of the Securities Transfer Agent Medallion Program ("STAMP"),
the Stock Exchange Medallion Program ("SEMP"), the New York Stock
Exchange, Inc. Medallion Signature Program ("MSP") or such other
signature guarantee program as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, SEMP or MSP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased in its entirety by
the Company pursuant to Section 4.7 or 4.10 of the Indenture, check here:
- ---------
If you want to elect to have only a part of the principal amount of
this Note purchased by the Company pursuant to Section 4.7 or 4.10 of the
Indenture, state the portion of such amount: $________.
Dated: __________________ Your Signature: _______________________________
(sign exactly as name appears on
the other side of this Note)
Signature Guarantee: ___________________________________
(Signature must be guaranteed by a financial institution that is a
member of the Securities Transfer Agent Medallion Program ("STAMP"),
the Stock Exchange Medallion Program ("SEMP"), the New York Stock
Exchange, Inc. Medallion Signature Program ("MSP") or such other
signature guarantee program as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, SEMP or MSP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
Exhibit T3C-2
[The face of the Notes shall be substantially as follows:]
PLANET HOLLYWOOD INTERNATIONAL, INC.
10% Secured Deferrable Interest Notes Due 2005.
No. __________ $_____________ Initial Principal Amount
Interest Payment Dates: ________ and _________ of each year,
commencing
------, -----
CUSIP No. ______________
PLANET HOLLYWOOD INTERNATIONAL, INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "COMPANY",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
________________________, or registered assigns, the Initial Principal Amount
set forth above (as the same may be increased through the compounding of
deferred interest as provided in the immediately succeeding paragraph) on
________ __, 2005 and to pay interest thereon from the date hereof, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on each Interest Payment Date in each year, at the
rate of 10.00% per annum, until the principal hereof is paid or duly provided
for, PROVIDED that any principal and premium, if any, and any such installment
of interest, which is overdue shall bear interest at the rate of 12.75% per
annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or duly
provided for, and such interest shall be payable on demand.
Notwithstanding the foregoing, the Company shall be entitled to defer
and compound to principal the first four semi-annual installments of interest on
the Notes on the related Interest Payment Dates; PROVIDED that (i) to the extent
so deferred and compounded, such installments shall be calculated at the rate of
12.75% per annum (rather than 10.00% 10% per annum) and (ii) if, as reflected in
the Company's financial statements for the most recently completed period of
four fiscal quarters (commencing with the FIRST fiscal quarter in which AFTER
the Notes are initially issued) for which such financial statements are
available, the ratio of the Company's Consolidated EBITDA to Consolidated
Interest Expense (as defined in the Indenture hereinafter referred to) for such
four-quarter FOR SUCH period is greater than 1.75 to 1.00, the Company shall not
be entitled to defer or compound the next succeeding semi-annual installment
INSTALLMENTS of interest pursuant to the foregoing.
The interest so payable in cash, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on the last day of the calendar month
(whether or not a Business Day) next preceding such Interest Payment Date.
In the case of a default in payment of principal upon acceleration,
redemption or repurchase, the overdue principal and any overdue premium shall
bear interest at the rate of 12.75% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or duly provided for. Interest on any overdue principal or
premium shall be payable on demand. Any such interest on overdue principal or
premium which is not paid on demand shall bear interest at the rate of 12.75%
per annum (to the extent that the payment of such interest on interest shall be
legally enforceable), from the date of such demand until the amount so demanded
is paid or duly provided for, and such shall be payable on demand.
Payment in respect of the principal of (and premium, if any) and any
interest on this Note will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
or at such additional offices or agencies as the Company from time to time may
designate for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts, PROVIDED, HOWEVER, that payment of the principal of (and premium,
if any, on) this Note shall be made only upon presentation and surrender hereof
at any such office or agency and, at the option of the Company, payment of
interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the Note Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
[SEAL] PLANET HOLLYWOOD INTERNATIONAL, INC.
By
---------------------------------
Name:
Title:
Attest:
By __________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee, certifies that
this is one of the Notes referred to in the Indenture.
By _________________________
Authorized Signatory
<PAGE>
[Form of Reverse of Note:]
This Note is one of a duly authorized issue of Notes of the Company
designated as its 10% Secured Deferrable Interest Notes Due 2005 (herein called
the "Notes"), limited in aggregate principal amount to $_________, issued and to
be issued under an Indenture, dated as of ______ __, 2000 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee (herein called the "Trustee" which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders and of the terms upon
which the Notes are, and are to be, authenticated and delivered. Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture.
To guarantee (a) the full and punctual payment of principal of and
interest on the Notes when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
this Indenture and the securities and (b) the full and punctual performance
within applicable grace periods of all other obligations of the Company under
this Indenture and the Notes, the Subsidiary Guarantors have unconditionally and
irrevocably guaranteed, jointly and severally, such obligations pursuant to the
terms of Article 11 of the Indenture.
The Notes are secured to the extent set forth in the Security
Documents and Article 10 of the Indenture.
At any time following the Issue Date, the Notes will be redeemable, in
whole or in part, at the option of the Company, upon not less than 30 and no
more than 60 days' prior notice, on any _______ __, _______.__, _______ __ or
_______ __ of any year at a redemption price equal to 100% of the principal
amount thereof PLUS accrued and unpaid interest, if any, to the date of
redemption.
If (i) [as reflected in the Company's financial statements for the
most recently completed period of four fiscal quarters (commencing with the
fiscal quarter in which the Notes are initially issued) for which such financial
statements are available], the ratio of the Company's Consolidated EBITDA to
Consolidated Interest Expense for [such four-quarter period] is greater than
2.00 to 1.00 and (ii) the sum of the Company's cash PLUS available commitments
under the Revolving Credit Agreement exceeds $25,000,000, then the Company shall
be required to use 50% of such excess amount to redeem the Notes, in whole or in
part, on the next Interest Payment Date, at a redemption price equal to 100% of
the principal amount thereof PLUS accrued and unpaid interest, if any, to the
date of redemption (a "Mandatory Redemption"); PROVIDED, HOWEVER, that the
Company shall not be required to make a Mandatory Redemption if such redemption
is not otherwise permitted by the Revolving Credit Agreement.
The Notes do not have the benefit of any sinking fund obligations.
Under the Indenture, the Company is obligated to make Offers to
Purchase Notes as described below:
(i) If a Change of Control occurs, the Company will be
required to make an Offer to Purchase all of the outstanding Notes at a
purchase price in cash equal to 101% 100% of the principal amount
thereof, plus accrued and unpaid interest, if any, on such principal
amount, to the date of purchase; and
(ii) If the Company or any Restricted Subsidiary consummates
an Asset Disposition, under certain circumstances, the Company will be
required to make an Offer to Purchase up to all or a specified portion
of the Notes at a purchase price in cash equal to 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, on such
principal amount to the date of purchase, in an aggregate principal
amount equal to any Net Available Proceeds from such an Asset
Disposition which are not used to make a permanent repayment or
reduction of (i) Debt then outstanding under any Bank Credit Agreement
or Vendor Financing Facility, to the extent such agreement or facility
would require such application or prohibit an Offer to Purchase Notes
or (ii) Debt then outstanding of the Company or a Restricted Subsidiary
that ranks PARI PASSU with the Notes at a price no greater than 100% of
the principal amount thereof plus accrued and unpaid interest to the
date of purchase.
In the event of redemption, or purchase pursuant to an Offer to
Purchase, of this Note in part only, a new Note or Notes for the unredeemed or
unpurchased portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
The Indenture contains provisions for defeasance at any time of the
entire Debt of this Note and for defeasance of certain covenants (including
covenants relating to the making of Offers to Purchase the Notes) and Events of
Default with respect to this Note, in each case upon compliance with certain
conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, the Notes may be
declared due and payable, in the manner and with the effect provided in the
Indenture. Upon payment of (i) the principal of the Notes so declared due and
payable, any overdue premium and any overdue installment of interest in respect
of this Note and (ii) as provided on the face hereof, any interest on any
overdue principal, premium or interest in respect of this Note (to the extent
that the payment of such interest shall be legally enforceable), all of the
Company's obligations in respect of the payment of the principal of and any
premium and interest on this Note shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the outstanding Notes. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the outstanding Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
In addition, without the consent of any Holder, the Indenture and the Notes may
be amended and supplemented to cure any ambiguity or inconsistency, make other
changes which will not adversely affect in any material aspect the rights of the
Holders or certain other matters set forth in the Indenture. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver, or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the outstanding
Notes shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity and the Trustee shall not have received from the Holders of a majority
in principal amount of the outstanding Notes a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to certain suits described in the Indenture, including any suit
instituted by the Holder of this Note for the enforcement of any payment of
principal hereof or any premium or interest hereon on or after the respective
due dates expressed herein (or, in the case of redemption, on or after the
Redemption Date or, in the case of any purchase of this Note required to be made
pursuant to an Offer to Purchase, on or after the Purchase Date).
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Note
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company in the Borough of Manhattan, The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Note Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
A director, officer, employee, stockholder or incorporator of the
Company shall not have any liability for any obligations of the Company under
this Note or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting this Note waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of this Note.
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Note shall be computed on the basis of a 360-day year
of twelve 30-day months.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York, including Section 5-1401 of
the New York General Obligations Law, but otherwise without regard to conflict
of laws rules.
<PAGE>
GUARANTEES
Each Subsidiary Guarantor hereby unconditionally and irrevocably
guarantees, jointly and severally, to each Holder and to the Trustee and its
successors and assigns (a) the full and punctual payment of principal of and
interest on the Notes when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
this Indenture and the securities and (b) the full and punctual performance
within applicable grace periods of all other obligations of the Company under
the Indenture and the Notes (all the foregoing being hereinafter collectively
called the "OBLIGATIONS"). Each Subsidiary Guarantor further agrees that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor and that such Subsidiary Guarantor
will remain bound under Article 11 of the Indenture notwithstanding any
extension or renewal of any Obligation.
Each Subsidiary Guarantor further agrees that its Guarantee
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Obligations.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which this Guarantee is
notes shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
The terms of the Guarantees evidences hereby are qualified in their
entirety and remain subject to the terms of Article 11 of the Indenture, as such
Article may be amended, modified or changes from the date hereof, including but
not limited to the addition of additional Subsidiary Guarantors and the release
of existing Subsidiary Guarantors form their obligations under the Indenture.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflicts of
law.
[THE SIGNATURE PAGE FOLLOWS.]
<PAGE>
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this
instrument to be duly executed.
[NAMES OF SUBSIDIARY GUARANTORS]
On behalf of each of the above
Subsidiary Guarantors
By
------------------------------------
Name:
Title:
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to:
-----------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint:
-----------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Dated: __________________
Your Signature: ______________________________________________________________
(sign exactly as name appears on the other side of this Note)
Signature Guarantee: ___________________________________
(Signature must be guaranteed by a financial institution that is a
member of the Securities Transfer Agent Medallion Program ("STAMP"),
the Stock Exchange Medallion Program ("SEMP"), the New York Stock
Exchange, Inc. Medallion Signature Program ("MSP") or such other
signature guarantee program as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, SEMP or MSP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased in its entirety by the
Company pursuant to Section 1013 4.7 or 1015 4.10 of the Indenture, check here:
If you want to elect to have only a part of the principal amount of
this Note purchased by the Company pursuant to Section 1013 4.7 or 1015 4.10 of
the Indenture, state the portion of such amount: $________.
Dated: __________________
Your Signature: ______________________________________________________________
(sign exactly as name appears on the other side of this Note)
Signature Guarantee: ___________________________________
(Signature must be guaranteed by a financial institution that is a
member of the Securities Transfer Agent Medallion Program ("STAMP"),
the Stock Exchange Medallion Program ("SEMP"), the New York Stock
Exchange, Inc. Medallion Signature Program ("MSP") or such other
signature guarantee program as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, SEMP or MSP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
Exhibit T3C-4
INTERCREDITOR AND SUBORDINATION AGREEMENT
THIS INTERCREDITOR AND SUBORDINATION AGREEMENT, dated as of February
__, 2000 (as amended, restated or otherwise modified from time to time, this
"AGREEMENT"), among THE CIT GROUP/BUSINESS CREDIT, INC., as agent (together with
its successors and assigns in such capacity, the "SENIOR AGENT") pursuant to the
CR Senior Credit Agreement (as hereinafter defined), BAY HARBOUR MANAGEMENT
L.C., as lender (together with its successors and assigns, the "BH SENIOR
LENDER") under the BH Senior Credit Agreement (as hereinafter defined), UNITED
STATES TRUST COMPANY OF NEW YORK as trustee under the Junior Subordinated
Indenture (as hereinafter defined) acting on behalf of the noteholders
thereunder (together with its successors and assigns in such capacity, the
"JUNIOR SUBORDINATED TRUSTEE") and [LIST PRINCIPAL PIK NOTEHOLDERS] (together
with their successors and assigns, collectively, the "JUNIOR SUBORDINATED
PRINCIPAL LENDERS") under the Junior Subordinated Indenture (as hereinafter
defined).
RECITALS:
WHEREAS, Planet Hollywood International, Inc. ("PHI"), and the other
entities listed on Schedule 1 hereto (herein being referred to collectively as
the "COMPANY"), CIT, Rothschild Recovery Fund, L.P. and various financial
institutions as may from time to time become parties thereto (collectively, the
"CR SENIOR LENDERS") and the Senior Agent are entering into a Revolving Credit
Agreement, dated as of the date hereof and the Guaranties (as hereinafter
defined) (in each case as amended, restated, supplemented, replaced or otherwise
modified from time to time in accordance with SECTION 3.10 hereof, the "CR
SENIOR CREDIT AGREEMENT");
WHEREAS, the CR Senior Obligations are secured by (a) first priority
liens on and security interests in substantially all of the assets (excluding
the BH First Priority Collateral) of the Company and the Subsidiary Guarantors
as more fully described on Schedule 2 (collectively, the "CR FIRST PRIORITY
COLLATERAL"), and (b) second priority liens on all real property of the Company
located at 1567 Broadway, New York, New York and the other collateral listed on
and as more fully described on Schedule 3 (the "BH FIRST PRIORITY COLLATERAL"),
in each case pursuant to the CR Senior Security Agreements;
WHEREAS, the Company and the BH Senior Lender are entering into a
SENIOR NOTE CREDIT AGREEMENT, dated as of the date hereof (as amended, restated,
supplemented, replaced or otherwise modified from time to time in accordance
with SECTION 3.10, the "BH SENIOR CREDIT AGREEMENT");
WHEREAS, the BH Senior Obligations are secured by (a) second priority
liens on and security interests in substantially all of the CR First Priority
Collateral and (b) first priority liens on all of the BH First Priority
Collateral, in each case pursuant to the BH Senior Security Agreements; and
WHEREAS, the Company, the Junior Subordinated Trustee, the Junior
Subordinated Principal Lenders and certain other persons (the Junior
Subordinated Principal Lenders and such other persons, together with their
successors and assigns, collectively the "JUNIOR SUBORDINATED LENDERS") are
entering into a Junior Subordinated Indenture dated the date hereof (as amended,
restated, supplemented, replaced or otherwise modified from time to time in
accordance with SECTION 3.10 hereof, the "JUNIOR SUBORDINATED INDENTURE");
WHEREAS, the Junior Subordinated Obligations are secured by third
priority liens and security interests in all the Intercreditor Collateral (as
hereinafter defined) pursuant to the Junior Subordinated Credit Documents (as
hereinafter defined);
WHEREAS, the Junior Subordinated Obligations are junior and
subordinate in right of payment in full of the CR Senior Obligations and the BH
Senior Obligations;
WHEREAS, the Intercreditor Parties are entering into this Agreement in
order to, among other things, (a) confirm (i) the first priority security
interests and liens of the Senior Agent in the CR First Priority Collateral,
(ii) the second priority security interests and liens of the Senior Agent in the
BH First Priority Collateral, (iii) the second priority security interest of the
BH Senior Lender in the CR First Priority Collateral and (iv) the first priority
security interest of the BH Senior Lender in the BH First Priority Collateral
(the "CR First Priority Collateral" and the "BH First Priority Collateral" being
collectively referred to as the "INTERCREDITOR COLLATERAL") and (b) provide for
the relative rights of the Intercreditor Parties, in connection with the
enforcement of their security interests in the Intercreditor Collateral.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained, and for other good and valuable consideration, each
of the Senior Agent, the BH Senior Lender, the Junior Subordinated Trustee and
the Junior Subordinated Lenders hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 CERTAIN DEFINITIONS. The following terms when used in this
Agreement shall have the following meanings:
"AGREEMENT" is defined in the PREAMBLE hereto.
"APPLICABLE LAW" means any law of the United States or any other
jurisdiction where any Intercreditor Collateral is located or any Obligor
operates, including, without limitation, the UCC.
"BANKRUPTCY CODE" means Title 11 of the United States Bankruptcy Code
(11 U.S.C. 101 et seq), as amended from time to time and any successor statute.
"BH COLLATERAL" means the assets of the Company and the Guarantors
listed on Schedules 2 and 3.
"BH COLLATERAL PROCEEDS" is defined in SECTION 1.2(A) hereof.
"BH FIRST PRIORITY COLLATERAL" is defined in SECOND RECITAL hereto.
"BH SCHEDULED PAYMENTS" [to come]
"BH SENIOR CREDIT DOCUMENTS" collectively means the BH Senior Credit
Agreement, the BH Senior Security Agreements and all documents, instruments and
agreements now or hereafter executed and/or delivered in connection therewith,
as the same may be amended, restated, supplemented, replaced or otherwise
modified from time to time in accordance with SECTION 3.10 hereof.
"BH SENIOR LENDERS" is defined in the PREAMBLE hereto.
"BH SENIOR OBLIGATIONS" means the principal of, and premium, if any,
payable on redemption or prepayment of, and interest on, all indebtedness and
all other obligations now existing or hereafter incurred under the BH Senior
Credit Documents, up to $22,000,000 including without limitation, all fees,
expenses, claims, charges and indemnity obligations (on an aggregate basis not
to exceed $____________).
"BH SENIOR SECURITY AGREEMENTS" collectively means all of the
agreements specified on ANNEX II hereto and each other guaranty, security
agreement, mortgage, deed of trust or other collateral agreement now or
hereafter entered into in connection with the BH Senior Obligations, the same
may be as amended, restated, supplemented, replaced or otherwise modified from
time to time in accordance with SECTION 3.10 hereof.
"BH/PIK CREDIT DOCUMENTS" collectively means the BH Senior Credit
Documents and the Junior Subordinated Credit Documents.
"BH/PIK GUARANTIES" collectively means all the guaranties forming a
part of the BH Senior Credit Documents or the Junior Subordinated Credit
Documents.
"BH/PIK LENDERS" collectively means the BH Senior Lenders, the Junior
Subordinated Trustee on behalf of the noteholders under the Junior Subordinated
Indenture and each of the Junior Subordinated Lenders.
"BH/PIK OBLIGATIONS" collectively means the BH Senior Obligations and
the Junior Subordinated Obligations.
"BH/PIK SECURITY AGREEMENTS" collectively means the BH Senior Security
Agreements and the Junior Subordinated Security Agreements.
"COMPANY" is defined in the FIRST RECITAL hereto.
"CR COLLATERAL" means the assets of the Company and the Guarantors
listed on Schedules 2 and 3.
"CR COLLATERAL PROCEEDS" is defined in SECTION 3.18 hereof.
"CR CREDIT DOCUMENTS" collectively means the CR Senior Credit
Agreement, the CR Senior Security Agreements and all documents, instruments and
agreements now or hereafter executed and/or delivered in connection therewith,
as the same may be amended, restated, supplemented, replaced or otherwise
modified from time to time in accordance with SECTION 3.10 hereof.
"CR FIRST PRIORITY COLLATERAL" is defined in the SECOND RECITAL
hereto.
"CR SENIOR CREDIT AGREEMENT" is defined in the FIRST RECITAL hereto.
"CR SENIOR LENDERS" is defined in the FIRST RECITAL hereto.
"CR SENIOR OBLIGATIONS" means the principal of, and premium, if any,
payable on redemption or prepayment of, and interest on, all indebtedness and
all other obligations now existing or hereafter incurred or owing under the CR
Credit Documents up to $16,500,000 plus, all fees, expenses, claims, charges and
indemnity obligations.
"CR SENIOR SECURITY AGREEMENTS" collectively means all of the
agreements specified on ANNEX I hereto and each other guaranty, security
agreement, pledge agreement, mortgage, deed of trust or other collateral
agreement now or hereafter entered into in connection with the CR Senior
Obligations, as the same may be as amended, restated, supplemented, replaced or
otherwise modified from time to time in accordance with SECTION 3.10 hereof.
"CREDIT DOCUMENTS" collectively means the CR Credit Documents and the
BH/PIK Credit Documents.
"GUARANTIES" collectively means the Senior Guaranties and the BH/PIK
Guaranties.
"GUARANTY ACTION" means any claim, demand, proceeding, action or act
against any guarantor pursuant to affecting or otherwise in connection with any
CR Senior Security Agreement.
"INSOLVENCY PROCEEDING" means (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding relative to PHI, any Obligor or any of their property or
assets, (b) any liquidation, dissolution, reorganization or winding up of PHI or
any Obligor, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of PHI or any Obligor.
"INTERCREDITOR COLLATERAL" is defined in the SEVENTH RECITAL hereto,
together with all Proceeds therefrom.
"INTERCREDITOR PARTIES" collectively means the Senior Agent and the
BH/PIK Lenders.
"JUNIOR SCHEDULED PAYMENTS" mean [to come]
"JUNIOR SUBORDINATED CREDIT DOCUMENTS" means the Junior Subordinated
Indenture, the Junior Subordinated Security Agreements and all documents,
instruments and agreements executed and/or delivered in connection therewith, as
the same may be amended, restated, supplemented, replaced or otherwise modified
from time to time in accordance with SECTION 3.10 hereof.
"JUNIOR SUBORDINATED INDENTURE" is defined in the FIFTH RECITAL
hereto.
"JUNIOR SUBORDINATED LENDERS" is defined in the FIFTH RECITAL hereto.
"JUNIOR SUBORDINATED OBLIGATIONS" means the principal of, and premium,
if any, payable on redemption or prepayment of, and interest on, all
indebtedness and all other obligations now existing or hereafter incurred or
owing under, the Junior Subordinated Credit Documents, including without
limitation, all fees, expenses, claims, charges and indemnity obligations.
"JUNIOR SUBORDINATED PRINCIPAL LENDERS" is defined in the PREAMBLE
hereto.
"JUNIOR SUBORDINATED TRUSTEE" is defined in the PREAMBLE hereto.
"JUNIOR SUBORDINATED SECURITY AGREEMENTS" collectively means all of
the agreements specified on ANNEX III hereto and each other guaranty, security
agreement, pledge agreement, mortgage, deed of trust or other collateral
agreement now or hereafter entered into in connection with the Junior
Subordinated Obligations, as the same may be as amended, restated, supplemented,
replaced or otherwise modified from time to time in accordance with SECTION 3.10
hereof.
"LEGEND" is defined in SECTION 3.16 hereof.
"LIEN" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such property or asset.
"NOTEHOLDERS" means the holders of the Junior Subordinated
Obligations.
"OBLIGOR" means PHI and each of its subsidiaries that is obligated
under any CR Credit Documents or BH/PIK Credit Documents.
"PERMITTED ENFORCEMENT ACTION" means any Remedial Action taken by the
BH Senior Lenders with respect to the BH Collateral only.
"PHI" is defined in the FIRST RECITAL hereto.
"PROCEEDS" means "proceeds," as such term is defined in Section
9-306(1) of the UCC and, in any event, shall include without limitation, (a) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
any Obligor from time to time with respect to any of the Intercreditor
Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to any Obligor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Intercreditor Collateral by any governmental authority, (c) any and all other
amounts from time to time paid or payable under or in connection with any of the
Intercreditor Collateral on account of any Guaranty Action or on account of any
Remedial Action and (d) the following types of property acquired with cash
Proceeds: accounts, chattel paper, contracts, documents, general intangibles,
equipment, investment property and inventory, as such terms are defined in the
UCC.
"REMEDIAL ACTION" means any claim, action, proceeding or agreement
(whether by judicial action, self help or otherwise) to foreclose upon, take
possession or control of, sell, lease, dispose of or otherwise realize or
protect upon any property or asset of the Company or any Guarantor, whether
pursuant to the UCC or other Applicable Law.
"SECURITY AGREEMENTS" collectively means the CR Senior Security
Agreements and the BH/PIK Security Agreements.
"SENIOR AGENT" is defined in the PREAMBLE hereto.
"SENIOR DEFAULT" is defined in SECTION 1.3 hereof.
"SENIOR GUARANTIES" means the guarantees forming a part of the CR
Credit Documents.
"SUBSIDIARY GUARANTORS" collectively means [_______________]. [PHI TO
PROVIDE A LIST OF GUARANTORS WHICH WILL EXCLUDE ONLY SHELL OR OTHER
NON-OPERATING ENTITIES WITH DI MINIMUS ASSETS.]
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.
SECTION 1.1 A BH/PIK LENDERS LIEN SUBORDINATION. The BH/PIK Lenders
each hereby severally agrees that notwithstanding anything contained in the
BH/PIK Credit Documents or any other document or instrument evidencing or in any
way relating to the BH/PIK Obligations, the security interests and liens of the
BH/PIK Lenders in the CR First Priority Collateral is expressly "subordinate and
junior" to the lien of the CR Senior Lenders in the CR First Priority
Collateral. Except for the (x) BH Collateral Proceeds paid to the BH Senior
Lender or (y) payments of the Junior Scheduled Payments and the BH Scheduled
Payments made by the Company to the BH Senior Lender or to the Junior
Subordinated Trustee at such times required under the BH/PIK Credit Documents
(in effect on the date hereof), in each case, to the extent no Senior Default
under the CR Senior Credit Agreement shall have occurred and then be continuing
or would occur as a result of such payment, "subordinate and junior" shall mean
that until the CR Senior Obligations shall have been paid in full and satisfied
as more fully described herein, the BH/PIK Lenders shall not without the express
prior written consent of the CR Senior Lenders (A) demand, require or accept any
payments or prepayment of the BH/PIK Obligations, (B) enforce or take any action
to (x) enforce or collect the BH/PIK Obligations or any portion thereof (other
than, in the case of the BH Senior Lender, the Permitted Enforcement Action) or
(y) enforce any rights or remedies with respect to, or to realize upon, the CR
First Priority Collateral or (C) declare an event of default, accelerate or
exercise any remedies with respect thereto under the BH/PIK Credit Documents
except, in the case of the BH Senior Lender, for the Permitted Enforcement
Action.
SECTION 1.1 B JUNIOR SUBORDINATED LENDERS DEBT SUBORDINATION. On
behalf of the Noteholders, the Trustee hereby covenants and agrees that, to the
extent and in the manner hereinafter set forth, the payment of the Junior
Subordinated Obligations is hereby expressly made subordinate and subject in
right of payment to the prior payment in full in cash of all the CR Senior
Obligations (first) and the BH Senior Obligations (second) pursuant to the terms
of this Agreement unless and until the CR Senior Obligations and the BH Senior
Obligations shall have been indefeasibly paid in full and satisfied. The Junior
Subordinated Lenders will not, without the express prior written consent of the
Senior Agent (or the BH Senior Lenders when the CR Senior Lenders have been
indefeasibly paid in full), take demand or receive, and the Company or any
Guarantor will not make, give or permit, directly or indirectly, by set-off,
redemption, purchase or in any other manner, any payment on or security for the
whole or any part of the Junior Subordinated Obligations, and, without the
express prior written consent of the Senior Agent (or the BH Senior Lender when
the CR Senior Lenders have been indefeaibly paid in full), the Junior
Subordinated Lenders will not accelerate the scheduled maturities of any amounts
owing under the Junior Subordinated Obligations, PROVIDED, that the Company may
make, and the Junior Subordinated Lenders may demand and receive the Junior
Scheduled Payments so long as no Senior Default under the CR Credit Documents
shall have occurred and then be continuing, or would occur as a result of such
payment.
SECTION 1.2 NO PAYMENT UPON INSOLVENCY EVENT. During any Insolvency
Proceeding:
(a) the CR Senior Lenders shall receive payment in full in cash of all
amounts due on or to become due on or in respect of all CR Senior Obligations
(including any fees, costs and interest accruing thereon at the rate provided in
the CR Senior Credit Agreement after the commencement of any such Insolvency
Proceeding, whether or not such fees, costs and interests are allowed as a claim
against the Company and/or any Guaranty in such Insolvency Proceeding) before
the BH/PIK Senior Lenders receive or accept any payment or distribution, whether
by setoff, exercising contractual or statutory rights or otherwise and whether
in the form of cash, stock, property or otherwise, on account of the BH/PIK
Obligations; PROVIDED, HOWEVER, nothing set forth herein shall be deemed to
restrict or limit in any way, the rights of the BH Senior Lenders to receive
proceeds of the BH First Priority Collateral received pursuant to a Permitted
Enforcement Action (the "BH COLLATERAL PROCEEDS");
(b) any payment, transfer or other distribution of assets of the
Company (or of any Guarantor) of any kind or character, whether in the form of
cash, property, securities or otherwise, by set-off, exercising contractual or
statutory rights or otherwise (other than BH Collateral Proceeds to the BH
Senior Lender), to which the BH/PIK Senior Lenders would be entitled but for the
provisions of this SECTION 1.2, shall be paid by the Company, the Guarantor or
the liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the Senior Agent on behalf of the CR Senior Lenders;
and
(c) to the extent any portion of (or payment in respect of) the CR
Senior Obligations (whether by or on behalf of the Company, as proceeds of
security or enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential, set aside or required to be paid to any receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar person under
any Insolvency Proceeding or in connection with any fraudulent conveyance or
similar law, then if such payment or incurrence of such obligation is recovered
by, or paid over to, such receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar person, the CR Senior Obligations or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
Notwithstanding the foregoing provisions of this Section 1.2, in the event that
the BH/PIK Lenders shall receive any payment, transfer or distribution of assets
of the Company (or any Guarantor) of any kind or character, whether in the form
of cash, property, securities or otherwise (other than (x) the Junior Scheduled
Payments and the BH Scheduled Payments previously paid by the Company to the
extent paid in accordance with the terms hereof and (y) payments received by the
BH Senior Lender of BH Collateral Proceeds), before all the CR Senior
Obligations have been paid in full in cash and all commitments of the CR Senior
Lenders to make extensions of credit available to the Company have irrevocably
terminated, then such payment or distribution shall be held in trust for the
benefit of, and be immediately paid over to, the Senior Agent on behalf of the
CR Senior Lenders.
SECTION 1.3 NO PAYMENT WHEN CR SENIOR OBLIGATIONS IN DEFAULT. In the
event that any default or event of default (collectively, a "SENIOR DEFAULT")
has occurred under the Senior Credit Agreement, the BH/PIK Lenders shall not
receive or accept any BH Scheduled Payments or any Junior Scheduled Payments or
any other payment, transfer or distribution (other than payments received by the
BH Senior Lender of BH Collateral Proceeds), whether by setoff, exercising
contractual or statutory rights or otherwise and whether in the form of cash,
stock, property or otherwise, on account of the BH Senior Obligations until the
earlier to occur of (a) such Senior Default having been waived in writing by the
CR Senior Lenders or (b)(i) the CR Senior Obligations (including, without
limitation, amounts that have become and remain due by acceleration, together
with all costs, fees and any interest accruing thereon at the rate provided in
the Senior Credit Agreement) having been paid in full in cash and (ii) all the
commitments by the CR Senior Lenders to make credit extensions available to the
Company having been irrevocably terminated. Notwithstanding the foregoing, in
the event that the Company shall have made, or the BH/PIK Lenders shall have
received, any payment or distribution of assets of PHI or any of its
subsidiaries of any kind or character, whether in the form of cash, property,
securities or otherwise, at any time when prohibited by the foregoing provisions
of this Section 1.3 (other than payments received by the BH Senior Lender of BH
Collateral Proceeds), then in such event such payment shall be held in trust for
the benefit of, and be immediately paid over to, the Senior Agent on behalf of
the CR Senior Lenders.
SECTION 1.4 REMEDIES STANDSTILL. At any time while the BH/PIK Senior
Lenders are prohibited from obtaining or receiving any payment on the BH/PIK
Obligations, the BH/PIK Lenders shall not take, demand, sue for, accelerate or
commence any remedial proceeding with respect to any amount that is payable on
account of the BH/PIK Obligations until (a) all of the CR Senior Obligations
have been paid in full in cash and (b) all the commitments by the CR Senior
Lenders to make credit extensions available to the Company have irrevocably
terminated; PROVIDED, HOWEVER, that (x) if the CR Senior Lenders have commenced
Remedial Action with respect to any material portion of the CR First Priority
Collateral, the BH/PIK Lenders shall immediately have the right to accelerate
the BH/PIK Obligations but shall be limited as to Remedial Action by the terms
hereof and (y) the BH Senior Lenders may pursue a Permitted Enforcement Action.
SECTION 1.5 WAIVER OF CERTAIN RIGHTS. Each of the BH/PIK Lenders (a)
hereby severally waives any and all rights to require the CR Senior Lenders (i)
to marshal any property or assets of the Company or of any Guarantor or (ii)
enforce any guaranty or any security interest or lien given by any guarantor or
other person to secure the payment of any or all of the CR Senior Obligations,
(b) shall not oppose, interfere or otherwise attempt to prevent or impair the CR
Senior Lenders from enforcing the security interests on any collateral securing
the repayment of the CR Senior Obligations and (c) shall not take, or permit to
be taken on its behalf, any action that is inconsistent with the terms hereof.
SECTION 1.6 NO AUTHORITY TO ACT DURING INSOLVENCY PROCEEDINGS. During
the pendency of any Insolvency Proceeding, the BH/PIK Lenders agree to take no
action unless such action is expressly permitted hereunder.
SECTION 1.7 [INTENTIONALLY LEFT BLANK]
SECTION 1.8 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The
provisions of this Agreement are and are intended solely for the purpose of
defining the relative rights of the BH Senior Lenders, the Junior Subordinated
Lenders and the CR Senior Lenders. Nothing contained in this Agreement, in the
BH/PIK Credit Documents or elsewhere shall impair, as among the Company (or any
Guarantor), its creditors other than the CR Senior Lenders and the BH/PIK
Lenders, the obligations of the Company and any Guarantor, which are absolute
and unconditional, to pay the principal of, premium, if any, and, interest on
the CR Senior Obligations and the BH/PIK Obligations, in each case in accordance
with their respective terms.
SECTION 1.9 NO WAIVER OF SUBORDINATION PROVISIONS. No right of any
present or future CR Senior Lender or the Senior Agent to enforce the
subordination provisions provided herein shall at any time be prejudiced or
impaired in any manner by (x) any act or failure to act on the part of the
Company (or any Guarantor) or the BH/PIK Lenders, (y) any act or failure to act
by the CR Senior Lenders or the Senior Agent or (z) any noncompliance by the
Company or the BH/PIK Lenders with the terms, provisions and covenants of this
Agreement, regardless, in each case, of any knowledge thereof any CR Senior
Lender may have or be otherwise charged with.
SECTION 1.10 AMENDMENTS, ETC. No provision of this Agreement may be
amended, supplemented or otherwise modified in any respect without the consent
of all the CR Senior Lenders.
SECTION 1.11 SPECIFIC ENFORCEMENT.
(a) The provisions of this Agreement are intended for the benefit of,
and shall be enforceable directly by, the Senior Agent and the CR Senior Lender.
The BH/PIK Lenders acknowledge and agree that the terms of this Agreement are a
material inducement to the CR Senior Lenders to make the CR Senior Obligations
available to the Company, that the CR Senior Lenders would not have made the CR
Senior Obligations available to the Company without the benefit of the
provisions contained in this Agreement, and that the BH/PIK Lenders are
receiving substantial benefits as a result of the CR Senior Lenders making the
CR Senior Obligations available to the Company.
(b) Each CR Senior Lender and the Senior Agent is hereby authorized to
demand specific performance of the provisions of this Agreement, whether or not
the Company shall have complied with any of the provisions hereof applicable to
it, at any time when the BH/PIK Lenders shall have failed to comply with any of
such provisions applicable to it. The BH/PIK Lenders hereby irrevocably waive
any defense based on the adequacy of a remedy at law that might be asserted as a
bar to such remedy of specific performance, it being agreed that the CR Senior
Lenders will suffer irreparable harm if the terms of this Agreement are not
strictly enforced in accordance with its terms.
ARTICLE II
COLLATERAL ISSUES, ETC.
SECTION 2.1 REPRESENTATIONS AND WARRANTIES AS TO THIS AGREEMENT. Each
Intercreditor Party hereby represents and warrants for itself to the other
Intercreditor Parties hereto that (a) it has all requisite power and authority
to execute, deliver and perform this Agreement; (b) the execution, delivery and
performance by it of this Agreement has been duly authorized by all requisite
corporate or other action; (c) no consent or approval of any other person and no
consent, license, approval or authorization of any governmental authority is
required in connection with the execution, delivery and performance by it of
this Agreement; (d) the execution, delivery and performance by it of this
Agreement does not violate the CR Senior Credit Documents, the BH/PIK Credit
Documents, the [Plan, the Confirmation Order]; and (e) this Agreement
constitutes its legal, valid and binding obligation enforceable against each
such Intercreditor Party in accordance with its terms.
SECTION 2.2 CR FIRST PRIORITY COLLATERAL RIGHTS. Irrespective of (a)
the time, order, manner or method of creation, attachment or perfection of the
respective Liens granted by PHI or any Obligor to any Intercreditor Party in any
or all of the CR First Priority Collateral, (b) the time, manner or place of the
filing of the respective UCC financing statements or other applicable filings of
any Intercreditor Party with respect to any or all of the CR First Priority
Collateral, (c) any statement contained in any Credit Document, (d) any other
event, circumstance, occurrence or otherwise or (e) any provision of any
Applicable Law to the contrary, (i) the Liens granted by PHI or any Obligor to
the Senior Agent (for and on behalf of itself and the CR Senior Lenders) in and
to the CR First Priority Collateral shall be superior and prior to any Liens
granted by PHI or any other Obligor therein to the BH Senior Lenders and (ii)
the Liens granted by PHI or any Obligor to the BH Senior Lender in and to the CR
First Priority Collateral shall be superior and prior to any Liens granted by
PHI or any other Obligor therein to the Junior Subordinated Trustee or the
Junior Subordinated Lenders.
SECTION 2.3 BH FIRST PRIORITY COLLATERAL RIGHTS. Irrespective of (a)
the time, order, manner or method of creation, attachment or perfection of the
Liens granted by PHI or any other Obligor to any Intercreditor Party with
respect in any or all of the BH First Priority Collateral, (b) the time, manner
or place of filing of any mortgages or UCC financing statements or other
applicable filings by any Intercreditor Party with respect to any or all of the
BH First Priority Collateral, (c) any statement contained in any Credit
Document, (d) any other event, circumstance, occurrence or otherwise or (e) any
provision of any Applicable Law to the contrary, (i) the Liens granted by PHI
and the other Obligors to the BH Senior Lender in and to the BH First Priority
Collateral shall be superior and prior to any Liens granted by PHI or any other
Obligor therein to the Senior Agent, the CR Senior Lenders or the Junior
Subordinated Lenders and (ii) the Liens granted by PHI and the other Obligors to
the Senior Agent (for and on behalf of itself and the CR Senior Lenders) in and
to the BH First Priority Collateral shall be superior and prior to any Liens
granted by PHI or any other Obligor therein to the Junior Subordinated Trustee
or the Junior Subordinated Lenders.
SECTION 2.4 GUARANTY AND SUBORDINATION ACTION. (a) So long as the CR
Senior Obligations have not been paid in full or the commitments under the
Senior Credit Documents have not been terminated, the Senior Agent shall have
the sole and exclusive right to take or fail to take any Guaranty Action with
respect to each Guaranty in any manner deemed appropriate by the Senior Agent or
the CR Senior Lenders in its or their sole discretion (without regard to the
rights of the BH/PIK Lenders in any Subordinated Guaranty) that is consistent
with the terms of each such Guaranty, and the BH/PIK Lenders shall not take any
Guaranty Action with respect to any Subordinated Guaranty or seek to hinder,
delay, impede or seek judicial review of or jurisdiction over the method, manner
or actions of the Senior Agent or any CR Senior Lender in its pursuit of any
Guaranty Action with respect to each Guaranty.
(b) So long as the CR Senior Obligations have not been paid in full or
the commitments under the Senior Credit Documents have not been terminated, the
Senior Agent shall have the sole and exclusive right to take or fail to take any
Remedial Action in any manner deemed appropriate by the Senior Agent or the CR
Senior Lenders in its or their sole discretion (without regard to the BH Senior
Lenders) that is consistent with the terms hereof, and the BH Senior Lender
shall not take any Remedial Action or seek to hinder, delay, impede or seek
judicial review of or jurisdiction over the method, manner or actions of the
Senior Agent or any CR Senior Lender in its pursuit of any Remedial Action.
SECTION 2.5 [INTENTIONALLY LEFT BLANK]
SECTION 2.6 EXCLUSIVE ENFORCEMENT RIGHTS. (a) (i) The Senior Agent and
each CR Senior Lender shall have the exclusive right to carry out, or not to
carry out, the provisions of each CR Senior Security Agreement (as each such
agreement relates to the CR Collateral but not the BH Collateral) and Guaranty
and to exercise or not to exercise any Guaranty Action or Remedial Action in
connection therewith, all in the Senior Agent's and each CR Senior Lender's sole
discretion and in the exercise of its and their sole business judgment (without
regard to the rights of the BH/PIK Lenders under any Subordinated Credit
Document). Such exclusive rights shall include, specifically (but not by way of
limitation) (i) the right to sell or otherwise dispose of (or not take any such
action) any or all of the CR First Priority Collateral and to incur expenses in
connection therewith or (ii) the right to take or not take any Guaranty Action
with respect to any Guaranty, all as may be desirable in the Senior Agent's and
each CR Senior Lender's sole discretion to the extent provided in the relevant
CR Senior Security Agreements (only to the extent related to the CR Collateral)
and Guaranties, as the case may be. In exercising its rights as aforesaid, the
Senior Agent and each CR Senior Lender shall not have any duties, obligations or
liabilities to the BH/PIK Lenders.
(ii) The BH/PIK Lenders shall not, either directly or indirectly,
assert or exercise any Remedial Action in respect of all or any part of the CR
First Priority Collateral or any Lien thereon held by the BH/PIK Lenders or
exercise any Guaranty Action with respect to any Guaranty. The BH/PIK Lenders
agree not to take or receive from or on behalf of PHI or any other Obligor,
directly or indirectly, in cash or other property or by set-off or in any other
manner (whether pursuant to any enforcement, collection, execution, levy or
foreclosure proceeding or otherwise) any portion of the CR First Priority
Collateral or proceeds thereof, except as provided in SECTION 3.6 hereof.
Without limiting the generality of the foregoing, the sole right of the BH/PIK
Lenders (i) with respect to the CR First Priority Collateral is to hold a Lien
thereon granted pursuant to the BH/PIK Security Agreements and not exercise any
Remedial Action with respect thereto and (ii) with respect to each Subordinated
Guaranty to hold the same and not take any Guaranty Action with respect thereto
except as provided in SECTION 3.6 hereof.
(b) (i) The BH Senior Lender shall have the exclusive right to carry
out, or not to carry out, the provisions of each BH Senior Security Agreement
(as each such agreement relates to the BH First Priority Collateral but not the
CR Collateral) and to exercise or not to exercise any Remedial Action in
connection therewith, all in the BH Senior Lender's sole discretion and in the
exercise of its sole business judgment (without regard to the rights of the
Senior Agent, the CR Senior Lenders, the Junior Subordinated Trustee or the
Junior Subordinated Lenders under any of their respective Credit Documents).
Such exclusive rights shall include, specifically (but not by way of limitation)
the right to sell or otherwise dispose of (or not take any such action), any or
all of the BH First Priority Collateral and to incur expenses in connection
therewith, all as may be desirable in the BH Senior Lender's sole discretion to
the extent provided in the BH Senior Security Agreements (only those evidencing
BH First Priority Collateral). In exercising its rights as aforesaid, the BH
Senior Lender shall not have any duties, obligations or liabilities to any of
the Senior Agent, the CR Senior Lenders, the Junior Subordinated Trustee and the
Junior Subordinated Lenders, except as provided herein.
(ii) None of the Senior Agent, the CR Senior Lenders, the Junior
Subordinated Trustee and the Junior Subordinated Lenders shall, either directly
or indirectly, assert or exercise any Remedial Action in respect of all or any
part of the BH First Priority Collateral or any Lien thereon held by such party.
Each of the Senior Agent, the CR Senior Lenders, the Junior Subordinated Trustee
and the Junior Subordinated Lenders agrees not to take or receive from or on
behalf of PHI or any Obligor, directly or indirectly, in cash or other property
or by set-off or in any other manner (whether pursuant to any enforcement,
collection, execution, levy or foreclosure proceeding or otherwise) any portion
of the BH First Priority Collateral or proceeds thereof, except as provided in
SECTION 3.6 hereof. Without limiting the generality of the foregoing, the sole
right of each of the Senior Agent, the CR Senior Lenders, the Junior
Subordinated Trustee and the Junior Subordinated Lenders with respect to the BH
First Priority Collateral is to hold a Lien thereon granted pursuant to the CR
Senior Security Agreements or the Junior Subordinated Security Agreements, as
the case may be, and not exercise any Remedial Action with respect thereto.
ARTICLE III
OTHER AGREEMENTS
SECTION 3.1 RELEASES. (a) If the Senior Agent or any CR Senior Lender
releases any Lien on any part of the CR First Priority Collateral in connection
with any sale, lease, exchange, transfer or other disposition thereof in
accordance with the terms of the CR Credit Documents (not involving any Remedial
Action or Guaranty Action), the Liens of the BH/PIK Lenders shall be
automatically and unconditionally and simultaneously released [HANDLE TIA ISSUE]
and the BH/PIK Lenders shall execute and deliver to PHI and the Senior Agent
such termination statements, releases and other documents as the Senior Agent,
the CR Senior Lenders or PHI may reasonably request to effectively confirm such
release. All such disposition proceeds shall be applied as provided in the CR
Senior Credit Agreement. Notwithstanding the foregoing, the Senior Agent shall
endeavor to notify the Junior Subordinated Trustee of such proposed sale, lease,
exchange, transfer or other disposition and shall have been provided the
opportunity to purchase the Collateral to be sold, leased, exchanged,
transferred or otherwise disposed of on terms more favorable to PHI than those
offered as aforesaid; PROVIDED, HOWEVER, that neither the Senior Agent nor the
CR Senior Lender shall have any liability for a failure to provide such notice
and opportunity to purchase.
(b) If the BH Senior Lender releases any Lien on any part of the BH
First Priority Collateral in connection with any sale, lease, exchange, transfer
or other disposition thereof in accordance with the terms of the BH Senior
Credit Documents (not involving any Remedial Action or Guaranty Action), the
Liens of the Senior Agent, the CR Senior Lenders, the Junior Subordinated
Trustee and the Junior Subordinated Lenders shall be automatically and
unconditionally and simultaneously released and the Senior Agent, the CR Senior
Lenders, the Junior Subordinated Trustee and the Junior Subordinated Lenders
shall execute and deliver to PHI and the BH Senior Lender such termination
statements, releases and other documents as the BH Senior Lender or PHI may
reasonably request to effectively confirm such release. All such disposition
proceeds shall be applied as provided in the BH Senior Credit Agreement.
Notwithstanding the foregoing, the BH Senior Lenders shall endeavor to notify
the CR Senior Lenders and the Junior Subordinated Trustee of such proposed sale,
lease, exchange, transfer or other disposition and shall have been provided the
opportunity to purchase the Collateral to be sold, leased, exchanged,
transferred or otherwise disposed of on terms more favorable to PHI than those
offered as aforesaid; PROVIDED, HOWEVER, that the BH Senior Lenders shall have
no liability for a failure to provide such notice and opportunity to purchase.
SECTION 3.2 INSURANCE AND CONDEMNATION AWARDS. (a)(i) The Senior Agent
and the CR Senior Lenders shall have the sole and exclusive right as among the
Intercreditor Parties to adjust, settle, direct or otherwise deal with any
insurance policy or proceeds therefrom covering the CR First Priority Collateral
in the event of any loss thereunder and to approve any award granted in any
condemnation or similar proceeding affecting the CR First Priority Collateral.
(ii) All the proceeds of any insurance policies and any awards
relating to the CR Collateral shall (x) first, be paid exclusively to the Senior
Agent and applied as provided in the CR Senior Credit Agreement, and the BH/PIK
Lenders shall have no right, title or interest therein and (y) second, after all
amounts owing under the CR Credit Documents have been paid in full and the same
have been terminated, be paid as provided in SECTION 3.6.
(b) (i) The BH Senior Lender shall have the sole and exclusive right
as among the Intercreditor Parties to adjust, settle, direct or otherwise deal
with any insurance policy or proceeds therefrom covering the BH First Priority
Collateral in the event of any loss thereunder and to approve any award granted
in any condemnation or similar proceeding affecting the BH First Priority
Collateral.
(ii) All the proceeds of any insurance policies and any awards
relating to the BH First Priority Collateral shall (x) first, be paid
exclusively to the BH Senior Lender and applied as provided in the BH Senior
Credit Agreement, and none of the Senior Agent, the CR Senior Lenders, the
Junior Subordinated Trustee and the Junior Subordinate Lenders shall have any
right, title or interest therein and (y) second, after all amounts owing under
the BH Senior Credit Documents have been paid in full and the same have been
terminated, be paid as provided in SECTION 3.6 hereof.
SECTION 3.3 NO ADDITIONAL OBLIGATIONS. (a) The Senior Agent and the CR
Senior Lenders will be entitled to manage and supervise the CR Senior
Obligations and the CR Credit Documents in accordance with their sole and
absolute discretion, without regard to any of the rights or interests of the
BH/PIK Lenders (but subject to the terms of this Agreement).
(b) (i) The Senior Agent and the CR Senior Lenders shall have no
obligation whatsoever to the BH/PIK Lenders to assure the ownership, existence
or genuineness of any CR Collateral. The Senior Agent and the CR Senior Lenders
shall have no obligation whatsoever to the BH/PIK Lenders to preserve their
rights or benefits in any of the CR Collateral.
(ii) The BH Senior Lender shall have no obligation whatsoever to
any of the Senior Agent, the CR Senior Lenders, the Junior Subordinated Trustee
and the Junior Subordinated Lenders to assure the ownership, existence or
genuineness of any BH Collateral. The BH Senior Lenders shall have no obligation
whatsoever to the Senior Agent, the CR Senior Lenders, the Junior Subordinated
Trustee and the Junior Subordinated Lenders to preserve their rights or benefits
in any of the BH Collateral.
SECTION 3.4 WAIVERS. (a)(i) No right of the Senior Agent or any CR
Senior Lender to enforce the subordination with respect to any CR First Priority
Collateral or take Remedial Action in connection with the CR First Priority
Collateral, exercise any Guaranty Action in respect of the Guaranties or
exercise any Remedial Action, in each case as provided in this Agreement, shall
in any manner be prejudiced or impaired by any act or failure to act on the part
of PHI, any other Obligor or the Senior Agent or any CR Senior Lender, or by
any noncompliance by any person with the terms, provisions and covenants of this
Agreement, any of the CR Credit Documents or any of the BH/PIK Credit Documents,
regardless of any knowledge thereof which the Senior Agent or any CR Senior
Lender may have or be otherwise charged with.
(ii) No right of the BH Senior Lender to enforce the
subordination with respect to any BH First Priority Collateral or take Remedial
Action in connection with the BH First Priority Collateral as provided in this
Agreement, shall in any manner be prejudiced or impaired by any act or failure
to act on the part of PHI, any other Obligor or the BH Senior Lender, or by any
noncompliance by any person with the terms, provisions and covenants of this
Agreement or any of the BH/PIK Credit Documents, regardless of any knowledge
thereof which the BH Senior Lender may have or be otherwise charged with.
(b) (i) Each of the BH/PIK Lenders hereby waives, to the fullest
extent permitted by law, any claim it may have against the Senior Agent or any
CR Senior Lender (including, without limitation, any such claims under Sections
9-207, 9-506 and 9-507 of the UCC) arising out of or with respect to any action
which the Senior Agent or any CR Senior Lender may take or permit or omit to
take with respect to the CR Collateral pursuant to, and in accordance with the
terms of, this Agreement.
(ii) Each of the Senior Agent, the CR Senior Lenders, the Junior
Subordinated Lenders hereby waives, to the fullest extent permitted by law, any
claim it may have against the BH Senior Lender (including, without limitation,
any such claims under Sections 9-207, 9-506 and 9-507 of the UCC) arising out of
or with respect to any action which the BH Senior Lender may take or permit or
omit to take with respect to the BH Collateral pursuant to, and in accordance
with the terms of, this Agreement.
(c) (i) With respect to the CR First Priority Collateral, the BH/PIK
Lenders agree not to assert and hereby waive, to the fullest extent permitted by
law, any right to demand, request, plead or otherwise assert or otherwise claim
the benefit of, any marshalling, appraisement, valuation or other similar right
that may otherwise be available under any Applicable Law or any other similar
rights a junior secured creditor it may have under any Applicable Law.
(ii) With respect to the BH First Priority Collateral, each of
the Senior Agent, the CR Senior Lenders, the Junior Subordinated Trustee and the
Junior Subordinated Lenders agrees not to assert and hereby waives, to the
fullest extent permitted by law, any right to demand, request, plead or
otherwise assert or otherwise claim the benefit of, any marshalling,
appraisement, valuation or other similar right that may otherwise be available
under any Applicable Law or any other similar rights a junior secured creditor
it may have under any Applicable Law.
SECTION 3.5 INFORMATION CONCERNING PHI, ETC. Each Intercreditor Party
shall be responsible for keeping itself informed of (a) the financial condition
of PHI, the Obligors and all endorsers and/or guarantors of the BH/PIK
Obligations or the CR Senior Obligations, as the case may be, and (b) all other
circumstances bearing upon the risk of nonpayment of the BH/PIK Obligations or
the CR Senior Obligations, as the case may be. No Intercreditor Party shall have
any present or future duty or responsibility to any other Intercreditor Party to
advise them of information known to it regarding the financial condition of PHI
or any other Obligor or of any circumstances bearing upon the risk of nonpayment
of the BH/PIK Obligations or the CR Senior Obligations, as the case may be.
SECTION 3.6 APPLICATION OF PAYMENTS. (a) All proceeds arising from any
Remedial Action with respect to any CR First Priority Collateral or any Guaranty
Action shall be applied, FIRST, to the payment of the CR Senior Obligations
until they have been paid in full in cash SECOND, to the payment of the BH
Senior Obligations until they have been paid in full in cash, and THIRD, to the
payment of the Junior Subordinated Obligations until this Agreement is
terminated.
(b) All proceeds arising from any Remedial Action with respect to any
BH First Priority Collateral shall be applied, FIRST, to the payment of the BH
Senior Obligations until they have been paid in full in cash, SECOND, to the
payment of the CR Senior Obligations until they have been paid in full in cash,
and THIRD, to the payment of the Junior Subordinated Obligations until this
Agreement is terminated.
SECTION 3.7 INDEPENDENT DECISIONS. Each Intercreditor Party has,
independently and without reliance on any other Intercreditor Party, and in
reliance upon information supplied to it by PHI and the Obligors and upon such
other information as it has deemed appropriate, has made its own independent
decision to enter into its Credit Documents and to make the extensions of credit
contemplated thereunder; and each Intercreditor Party shall, independently and
without reliance upon any other Intercreditor Party, continue to make its own
independent analysis and decisions in acting or not acting under its Credit
Documents and this Agreement.
SECTION 3.8 TURNOVER OF PROHIBITED TRANSFERS. If any amount is
received by any Intercreditor Party in violation of the terms of this Agreement,
such amount shall, without the necessity of demand or request by any other
Intercreditor Party, be delivered forthwith by such Intercreditor Party to the
applicable Intercreditor Party entitled to receive the same for application to
payment of the CR Senior Obligations or BH/PIK Obligations, as the case may be,
in the form received, except for the addition of any endorsement or assignment
necessary to effect a transfer of all rights therein to such other party. Until
so delivered, any such amount shall be deemed received and held by the relevant
Intercreditor Party in trust for the Intercreditor Party entitled to receive the
same and shall not be commingled with other funds or property of such
Intercreditor Party.
SECTION 3.9 EFFECTIVENESS DURING INSOLVENCY PROCEEDING. This Agreement
shall continue in full force and effect notwithstanding any Insolvency
Proceeding.
SECTION 3.10 AMENDMENTS. No Intercreditor Party shall amend,
supplement or otherwise modify, without the consent of each other Intercreditor
Party, the terms of any of its Credit Documents, or enter into any other
agreement having the effect of doing so, in a manner that (a) is inconsistent in
any respect with the terms of this Agreement, (b) modifies the scope of the
Intercreditor Collateral. Other than the CR Senior Lender or the Senior Agent,
no Intercreditor Party shall be entitled to a first lien on any now or hereafter
acquired property of the Company or any its subsidiaries (except for the BH
Senior Lender with respect to the BH First Priority Collateral). In addition,
the Legend shall not be amended or modified in any respect.
SECTION 3.11 LIMITATION ON DECLARING DEFAULTS. Notwithstanding the
occurrence of any fact or circumstance that may result in any default or event
of default under any BH/PIK Credit Document, no BH/PIK Lender shall declare any
default or event of default thereunder. In addition, no BH/PIK Lender shall join
in any involuntary Insolvency Proceeding against PHI or any Obligor.
SECTION 3.12 DURATION AND TERMINATION; PAYMENT INVALIDATED. (a) This
Agreement shall constitute a continuing agreement and shall terminate with
respect to the Senior Agent and the CR Senior Lenders only upon written notice
by the Senior Agent to PHI, the BH Senior Lender and the Junior Subordinated
Trustee of the final and indefeasible payment in full in cash of all of the CR
Senior Obligations and the termination of the CR Credit Documents (such written
notice the Senior Agent agrees to give promptly (and, in any event, within three
(3) business days) after the occurrence of the foregoing). The termination of
this Agreement with respect to the Senior Agent and the CR Senior Lenders shall,
subject to CLAUSE (B), release fully and irrevocably such persons from any and
all liabilities, duties and responsibilities hereunder to the same extent as if
this Agreement had been fully terminated by all the parties hereto, PROVIDED
that the foregoing shall not release any of the parties with respect to any
obligations arising prior to such termination.
(b) In the event that this Agreement is terminated with respect to the
Senior Agent and the CR Senior Lenders, as provided in CLAUSE (A), and the
Senior Agent or any CR Senior Lender shall be required by a court or other
tribunal of competent jurisdiction to disgorge, refund, rebate or otherwise
return any amount received with respect to any of the Intercreditor Collateral,
any Senior Guaranty to any debtor-in-possession or trustee in respect of any
Insolvency Proceeding or any other person (whether as the result of such payment
constituting, or being alleged to constitute, a preference, a fraudulent
conveyance or any other payment required to be disgorged pursuant to any such
Insolvency Proceeding) then, in any such event, (i) the terms and conditions of
this Agreement shall be reinstated, notwithstanding any prior termination of
this Agreement pursuant to this Section, and (ii) all provisions of this
Agreement shall once again be operative until all such CR Senior Obligations are
again paid in full in cash.
(c) If both the BH Senior Obligations and Junior Subordinated
Obligations are outstanding at the time this Agreement is terminated with
respect to the Senior Agent and the CR Senior Lenders, the BH Senior Lender and
the Junior Subordinated Lenders shall continue to be subject to this Agreement
with respect to the Intercreditor Collateral on the same terms as provided in
this Agreement immediately prior to such termination with respect to the Senior
Agent and the CR Senior Lenders, except that (i) all references to the Senior
Agent, the CR Senior Lenders and the BH Senior Lender shall refer to the BH
Senior Lender and (ii) this Agreement shall be interpreted as if there were two
classes of Intercreditor Parties, with the Senior Agent, CR Senior Lenders and
the BH Senior Lender being, collectively, the senior class, and the Junior
Subordinated Trustee and the Junior Subordinated Lenders being be the junior
class (it being understood and agreed that, to the extent the BH Senior Lender
is prohibited from taking any action hereunder as it relates to the Senior Agent
and the CR Senior Lenders, such provisions shall be null and void as it relates
to the BH Senior Lender). Notwithstanding the foregoing sentence, with respect
to Guaranties and any Guaranty Action, the BH Senior Lender shall not have any
rights hereunder that are senior to those of the Junior Subordinated Trustee and
references to the Senior Agent and the Senior Lenders in respect of the
Guaranties and any Guaranty Action shall not refer to the BH Senior Lender.
[THIS PARAGRAPH TO BE MARKED UP BY WF&G TO REFLECT DISCUSSIONS.]
(d) In connection with the termination of this Agreement with respect
to the Senior Agent and the CR Senior Lenders, the Senior Agent shall transfer
the possession to the BH Senior Lender (if the BH Senior Obligations are
outstanding) or the Junior Subordinated Trustee (if the Junior Subordinated
Obligations are outstanding but no BH Senior Obligations are outstanding) any
Intercreditor Collateral it holds as bailee for the BH/PIK Lenders. No such
transfer shall be taken in violation of any applicable law, rule or regulation
or court order, and shall be taken at the sole cost and expense of the Company.
All such transfers shall be done without any representation or warranty by the
Senior Agent or the CR Senior Lenders and on an "as is, where is" basis, and
none of the CR Senior Lenders shall have any liability with respect thereto.
SECTION 3.13 NOTICE OF BH/PIK LENDERS INTERESTS. This Agreement
constitutes a written notification of demand to the Senior Agent by the BH/PIK
Lenders for the satisfaction of the indebtedness outstanding under the BH/PIK
Credit Documents that are secured by the Intercreditor Collateral for the
purposes of Section 9-504(1)(c) of the UCC, and the Senior Agent hereby waives
any rights that it might otherwise have under said Section to require the BH/PIK
Lenders to file any proof of their interest in the Intercreditor Collateral.
SECTION 3.14 CREDIT DOCUMENTS. Each Intercreditor Party confirms that
it has delivered to each other Intercreditor Party true and correct copies of
its Credit Documents, in each case as in effect on the date hereof, and all UCC
financing statements and other filings to perfect its security interest in the
Intercreditor Collateral.
SECTION 3.15 BAILEE FOR PERFECTION. For purposes of the UCC, each
BH/PIK Lender hereby appoints the Senior Agent as its bailee (and by its
execution hereof the Senior Agent accepts such appointment) to hold on its
behalf all the instruments and certificates forming a part of the Intercreditor
Collateral solely for the purpose of perfecting its Liens in the same pursuant
to the BH/PIK Security Agreements, subject to the terms and conditions of this
Agreement and otherwise on terms and conditions satisfactory to the Senior
Agent. Neither the Senior Agent nor any CR Senior Lender shall have by reason of
this Agreement or any other document a fiduciary relationship in respect of the
BH/PIK Lenders, nor shall the Senior Agent or any CR Senior Lender incur any
liabilities of any kind whatsoever to the BH/PIK Lenders by virtue of it acting
as bailee on behalf of the BH/PIK Lenders.
SECTION 3.16 LEGEND. The BH Senior Credit Agreement and any notes or
other evidences of indebtedness in connection therewith and the Junior
Subordinated Indenture and any notes or other evidence of indebtedness in
connection therewith shall contain a legend which shall read as follows:
THIS AGREEMENT IS SUBJECT TO AN INTERCREDITOR AND SUBORDINATION
AGREEMENT DATED AS OF FEBRUARY __, 2000 BY AND AMONG THE CIT
GROUP/BUSINESS CREDIT, INC., BAY HARBOUR MANAGEMENT L.C., AND UNITED
STATES TRUST COMPANY OF NEW YORK WHICH MATERIALLY AFFECTS CERTAIN
PAYMENT RIGHTS, SUBORDINATES CERTAIN SECURITY INTERESTS AND LIMITS
RIGHTS TO ENFORCEMENT. ALL PERSONS OR OTHER ENTITIES WHICH AT ANY TIME
HOLD INDEBTEDNESS HEREUNDER ARE BOUND BY THE TERMS OF THE INTECREDITOR
AGREEMENT WHICH WILL BE MADE AVAILABLE UPON REQUEST.
SECTION 3.17 JUNIOR SUBORDINATED LENDERS: POWER OF ATTORNEY; AGREEMENT
TO COOPERATE. The Junior Subordinated Lenders irrevocably authorize and empower
the Senior Agent and the CR Senior Lender (or any and all representatives
thereof) to demand, sue for, collect and receive every such payment or
distribution to which such Junior Subordinated Lenders are entitled and give
acquittance therefor, and to file claims and proofs of claim in any statutory or
non-statutory proceeding, to vote such claim in any such proceeding, and to take
any and all such other actions, in its own name as the CR Senior Lender, or in
the name of such Junior Subordinated Lenders or otherwise, as the Senior Agent
and the CR Senior Lender (or their respective representatives) may deem
necessary or advisable in its sole discretion for the enforcement of the
provisions of this Agreement and for the satisfaction and payment in full of the
CR Senior Obligations. The Junior Subordinated Lenders hereby agree, duly and
promptly to take such action as may be requested at any time and from time to
time by the Senior Agent and the CR Senior Lender (or their respective
representatives), to file appropriate proofs of claim in respect of the Junior
Subordinated Obligations, and to execute and deliver such powers of attorney,
assignments of proofs of claim or other instruments as may be requested by the
Senior Agent and the CR Senior Lender (or their respective representatives), in
order to enable the CR Senior Lender to enforce any and all claims upon or in
respect of the Junior Subordinated Obligations and to collect and receive any
and all payments or distributions which may be payable or deliverable at any
time upon or in respect of the Junior Subordinated Obligations.
SECTION 3.18 BH SENIOR LENDERS: POWER OF ATTORNEY; AGREEMENT TO
COOPERATE. In the event the BH Senior Lender has taken Remedial Action with
respect to the BH First Priority Collateral [exclusive of any related equity
interest] and has received all or substantially all of the BH Collateral
Proceeds such BH Senior Lender is reasonably likely to receive therefrom at a
time when the CR Senior Obligations shall not have been paid in full and the CR
Senior Lender has commenced Remedial Action with respect to the CR First
Priority Collateral, the BH Senior Lender irrevocably authorizes and empowers
Senior Agent and the CR Senior Lender (or their respective representatives) to
demand, sue for, collect and receive every such payment or distribution to which
the BH Senior Lender is entitled from the proceeds of the CR First Priority
Collateral (the "CR COLLATERAL PROCEEDS") and give acquittance therefor, and to
file claims and proofs of claim in any statutory or non-statutory proceeding, to
vote such claim in any such proceeding, and to take such other actions, in its
own name as the CR Senior Lender, or in the name of the BH Senior Lender or
otherwise, as the Senior Agent and CR Senior Lender (or their respective
representatives) may deem necessary or advisable for the enforcement of the
provisions of this Agreement. The BH Senior Lender hereby agrees, duly and
promptly to take such action as may be requested at any time and from time to
time by the Senior Agent and CR Senior Lender (or their respective
representatives), to file appropriate proofs of claim in respect of the BH
Senior Obligations, and to execute and deliver such powers of attorney,
assignments of proofs of claim or other instruments as may be requested by the
Senior Agent and CR Senior Lender (or their respective representatives), in
order to enable the CR Senior Lender to enforce any and all claims upon or in
respect of the CR Senior Obligations and to collect and receive any and all
payments or distributions which may be payable or deliverable at any time upon
or in respect of the CR Senior Obligations from the CR Collateral Proceeds.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1 CONFLICT. In the event of any conflict between the terms
of any Credit Document and the terms of this Agreement, the terms of this
Agreement shall control.
SECTION 4.2 NO THIRD PARTY BENEFIT, ETC. This Agreement is entered
into for the benefit of the parties hereto and their respective successors and
assigns only and no benefit shall accrue or is intended with respect to any
third party, including, without limitation, any trustee in bankruptcy for PHI or
any other Obligor.
SECTION 4.3 AMENDMENTS AND WAIVERS. All modifications, amendments or
waivers of any of the terms or provisions of this Agreement shall be in writing
and duly executed by a duly authorized officer of each of the parties to this
Agreement.
SECTION 4.4 SUCCESSORS AND ASSIGNS. All the covenants, terms and
agreements in this Agreement shall bind and inure to the benefit of the
respective successors and assigns of PHI, the other Obligors, the Noteholders
and the Intercreditor Parties.
SECTION 4.5 PARTIAL INVALIDITY. The unenforceability or invalidity of
any provision or provisions of this Agreement shall not render any other
provision or provisions herein contained unenforceable or invalid.
SECTION 4.6 COMMUNICATIONS. All communications between or among the
Intercreditor Parties provided for herein shall be in writing and via overnight
delivery or telecopier, and shall be deemed to have been given:
(a) when delivered, if delivered personally or by overnight delivery
service;
(b) when delivered, if delivered by the United States mail, postage
prepaid, with return receipt requested; or
(c) if delivered by telecopier transmissions, upon receipt of
confirmation of transmission thereof by the sender thereof, addressed, in each
case, at the address of each party set forth below or such other address as such
party may designate by notice duly given in accordance with this Section to the
other parties hereto:
IF TO THE SENIOR AGENT:
----------------------
CIT Group/Business Group, Inc., as Senior Agent
1211 Avenue of the Americas
New York, New York 10036
Telecopier No.: (212) 790-9140
Attention: Mitchell Drucker
with a copy to:
Rothschild Recovery Fund, L.P.
1251 Avenue of the Americas, 51st Floor
New York, New York 10020
Attention: Wilbur Ross
IF TO THE BH SENIOR LENDER:
Bay Harbour Management L.C.
---------------------------
Attention:
IF TO THE JUNIOR SUBORDINATED TRUSTEE
OR THE JUNIOR SUBORDINATED PRINCIPAL LENDERS:
United States Trust Company of New York
Corporate Trust & Agency Division
114 West 47th Street, 25th Floor
New York, New York 10036-1532
Attention: Corporate Trust Administration
Facsimile: (212) 852-1627
SECTION 4.7 GOVERNING LAW; CONSENT TO JURISDICTION. THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICTS-OF-LAW PRINCIPLES).
SECTION 4.8 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF ANY PARTY TO THIS AGREEMENT, SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE FEDERAL OR STATE COURTS OF NEW YORK LOCATED IN THE
BOROUGH OF MANHATTAN; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY INTERCREDITOR COLLATERAL MAY BE BROUGHT IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH PARTY
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR
THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
EACH PARTY HERETO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK. EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY PARTY HERETO HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT.
SECTION 4.9 WAIVER OF JURY TRIAL, ETC. EACH PARTY TO THIS AGREEMENT
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO.
EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR EACH OF THE PARTIES HERETO ENTERING INTO THIS AGREEMENT.
SECTION 4.10 COUNTERPARTS. This Agreement may be executed and
delivered in any number of counterparts, each of such counterparts constituting
an original but altogether only one Agreement.
SECTION 4.11 FURTHER ASSURANCES. Each Intercreditor Party agrees to
execute such further documents and agreements as may be reasonably requested by
the other to give effect to the purposes of this Agreement.
SECTION 4.12 SPECIFIC ENFORCEMENT. EACH PARTY TO THIS AGREEMENT
ACKNOWLEDGES AND AGREES THAT THE TERMS OF THIS AGREEMENT ARE A MATERIAL
INDUCEMENT TO ITS ENTERING INTO ITS RESPECTIVE CREDIT DOCUMENTS. ACCORDINGLY,
EACH INTERCREDITOR PARTY IS HEREBY AUTHORIZED TO DEMAND SPECIFIC PERFORMANCE OF
THE PROVISIONS OF THIS AGREEMENT AT ANY TIME WHEN ANY OTHER INTERCREDITOR PARTY
SHALL HAVE FAILED TO COMPLY WITH ANY OF THE PROVISIONS THAT ARE APPLICABLE TO
IT. EACH INTERCREDITOR PARTY HEREBY IRREVOCABLY WAIVES ANY DEFENSE BASED ON THE
ADEQUACY OF A REMEDY AT LAW THAT MIGHT BE ASSERTED AS A BAR TO SUCH REMEDY OF
SPECIFIC PERFORMANCE.
SECTION 4.13 ACKNOWLEDGEMENT BY PHI. By executing the acknowledgement
to this Agreement, PHI agrees, for and on behalf of itself and the other
Obligors, to all the terms hereof and shall not, either directly or indirectly,
take any action to challenge or otherwise impair in any respect the operation of
this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Senior Agent
By:
----------------------------
Name:
Title:
BAY HARBOUR MANAGEMENT L.C.
By:
----------------------------
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW YORK
By:
----------------------------
Name:
Title:
[OTHER BONDHOLDERS]
ACKNOWLEDGED AND AGREED:
PLANET HOLLYWOOD INTERNATIONAL, INC.
By:
----------------------------
Name:
Title:
[SPV AND SUBSIDIARY BORROWERS]
By:
----------------------------
Name:
Title:
<PAGE>
SCHEDULE 1
LIST OF BORROWERS
<PAGE>
SCHEDULE 2
CR FIRST PRIORITY COLLATERAL
<PAGE>
SCHEDULE 3
BH FIRST PRIORITY COLLATERAL
<PAGE>
Annex I
CR SENIOR SECURITY AGREEMENTS
<PAGE>
Annex II
BH SENIOR SECURITY AGREEMENTS
<PAGE>
Annex III
JUNIOR SUBORDINATED SECURITY AGREEMENTS
<PAGE>
===============================================================================
INTERCREDITOR AND SUBORDINATION AGREEMENT
dated as of February __, 2000
among
THE CIT GROUP/BUSINESS CREDIT, INC.,
THE SENIOR AGENT ON BEHALF OF THE CR SENIOR LENDERS,
BAY HARBOUR MANAGEMENT L.C.,
THE BH SENIOR LENDER,
UNITED STATES TRUST COMPANY OF NEW YORK,
THE JUNIOR SUBORDINATED TRUSTEE
ON BEHALF OF THE NOTEHOLDERS
and
[LIST INSTITUTIONAL PIK NOTEHOLDERS]
===============================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
-----
ARTICLE I DEFINITIONS.....................................................2
Section 1.1 Certain Definitions.......................................2
Section 1.1 A BH/PIK Lenders Lien Subordination.........................6
Section 1.1 B Junior Subordinated Lenders Debt Subordination............7
Section 1.2 No Payment Upon Insolvency Event..........................7
Section 1.3 No Payment When CR Senior Obligations in Default..........8
Section 1.4 Remedies Standstill.......................................8
Section 1.5 Waiver of Certain Rights..................................9
Section 1.6 No Authority to Act During Insolvency Proceedings.........9
Section 1.7 [Intentionally Left Blank]................................9
Section 1.8 Provisions Solely To Define Relative Rights...............9
Section 1.9 No Waiver of Subordination Provisions.....................9
Section 1.10 Amendments, etc..........................................10
Section 1.11 Specific Enforcement.....................................10
ARTICLE II COLLATERAL ISSUES, ETC........................................10
Section 2.1 Representations and Warranties as to this Agreement......10
Section 2.2 CR First Priority Collateral Rights......................10
Section 2.3 BH First Priority Collateral Rights......................11
Section 2.4 Guaranty and Subordination Action........................11
Section 2.5 [Intentionally Left Blank]...............................12
Section 2.6 Exclusive Enforcement Rights.............................12
ARTICLE III OTHER AGREEMENTS.............................................13
Section 3.1 Releases................................................13
Section 3.2 Insurance and Condemnation Awards.......................14
Section 3.3 No Additional Obligations...............................14
Section 3.4 Waivers.................................................15
Section 3.5 Information Concerning PHI, etc.........................16
Section 3.6 Application of Payments.................................16
Section 3.7 Independent Decisions...................................16
Section 3.8 Turnover of Prohibited Transfers........................17
Section 3.9 Effectiveness During Insolvency Proceeding..............17
Section 3.10 Amendments..............................................17
Section 3.11 Limitation on Declaring Defaults........................17
Section 3.12 Duration and Termination; Payment Invalidated...........17
Section 3.13 Notice of BH/PIK Lenders Interests......................18
Section 3.14 Credit Documents........................................19
Section 3.15 Bailee for Perfection...................................19
Section 3.16 Legend..................................................19
Section 3.17 Junior Subordinated Lenders: Power of Attorney;
Agreement to Cooperate..................................19
Section 3.18 BH Senior Lenders: Power of Attorney; Agreement
to Cooperate............................................20
ARTICLE IV MISCELLANEOUS.................................................20
Section 4.1 Conflict................................................20
Section 4.2 No Third Party Benefit, etc.............................20
Section 4.3 Amendments and Waivers..................................21
Section 4.4 Successors and Assigns..................................21
Section 4.5 Partial Invalidity......................................21
Section 4.6 Communications..........................................21
Section 4.7 Governing Law; Consent to Jurisdiction..................22
Section 4.8 Forum Selection and Consent to Jurisdiction.............22
Section 4.9 Waiver of Jury Trial, etc...............................23
Section 4.10 Counterparts............................................23
Section 4.11 Further Assurances......................................23
Section 4.12 Specific Enforcement....................................23
Section 4.13 Acknowledgement by PHI..................................23
SCHEDULES
Schedule 1 - List of Borrowers
Schedule 2 - CR First Priority Collateral
Schedule 3 - BH First Priority Collateral
Annex I - CR Senior Security Agreements
Annex II - BH Senior Security Agreements
Annex III - Junior Subordinated Security Agreements
<PAGE>
ANNEX __
SUBORDINATION PROVISIONS TO THE SENIOR
SUBORDINATED CREDIT AGREEMENT
SECTION 1.01 SUBORDINATION TO SENIOR DEBT. Planet Hollywood
International, Inc. ("PHI"), certain subsidiaries of PHI (PHI and such
subsidiaries, together with their respective successors and assigns, being
collectively, the "COMPANY"), and Bay Harbour Management L.C., (together with
its successors and assigns, the "SENIOR SUBORDINATED LENDER"), each a party to
the Senior Subordinated Credit Agreement, dated as of February __, 2000 (as
amended, restated, supplemented or otherwise modified from time to time, the
"SENIOR SUBORDINATED CREDIT AGREEMENT"), covenant and agree that, to the extent
and in the manner hereinafter set forth, the payment of the principal of,
premium, if any, interest on and all other amounts owing on or in respect of
(including, without limitation, claims for rescission, damages, indemnification
and costs and expenses) the Senior Subordinated Credit Agreement and the other
Senior Subordinated Credit Documents (such capitalized term and all other
capitalized terms used herein without being defined shall have the meanings
provided for in the Intercreditor Agreement referenced in SECTION 1.12)
(collectively, the "SENIOR SUBORDINATED OBLIGATIONS") is hereby expressly made
subordinate and subject in right of payment to the prior payment in full in cash
of all the Senior Obligations in the manner set forth in this ANNEX I. Each
Senior Lender shall be deemed to have acquired the Senior Obligations in
reliance upon the covenants and provisions contained herein.
SECTION 1.02 NO PAYMENT UPON INSOLVENCY EVENT. During any Insolvency
Proceeding:
(a) the Senior Lenders shall receive payment in full in cash of all
amounts due on or to become due on or in respect of all Senior Obligations
(including any interest accruing thereon at the rate provided in the Senior
Credit Agreement after the commencement of any such Insolvency Proceeding,
whether or not allowed as a claim against the Company in such Insolvency
Proceeding) before the Senior Subordinated Lender receives or accepts any
payment or distribution, whether by setoff, exercising contractual or statutory
rights or otherwise and whether in the form of cash, stock, property or
otherwise, on account of the Senior Subordinated Obligations;
(b) any payment or distribution of assets of the Company of any kind
or character, whether in the form of cash, property, securities or otherwise, by
set-off, exercising contractual or statutory rights or otherwise, to which the
Senior Subordinated Lender would be entitled but for the provisions of this
SECTION 1.02, shall be paid by the Company or the liquidating trustee or agent
or other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to the
Senior Agent on behalf of the Senior Lenders; and
(c) to the extent any payment of Senior Obligations (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar person under any Insolvency Proceeding or in connection
with any fraudulent conveyance or similar law, then if such payment is recovered
by, or paid over to, such receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar person, the Senior Obligations or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred.
In the event that, notwithstanding the foregoing provisions of this
Section the Senior Subordinated Lender shall receive any payment or distribution
of assets of the Company of any kind or character, whether in the form of cash,
property, securities or otherwise, before all the Senior Obligations have been
paid in full in cash and all commitments of the Senior Lenders to make
extensions of credit available to the Company have irrevocably terminated, then
such payment or distribution shall be held in trust for the benefit of, and be
immediately paid over to, the Senior Agent on behalf of the Senior Lenders.
SECTION 1.03 NO PAYMENT WHEN SENIOR OBLIGATIONS IN DEFAULT. In the
event that any default or event of default (collectively, a "SENIOR DEFAULT")
has occurred under the Senior Credit Agreement, the Senior Subordinated Lender
shall not receive or accept any payment or distribution, whether by setoff,
exercising contractual or statutory rights or otherwise and whether in the form
of cash, stock, property or otherwise, on account of the Senior Subordinated
Obligations until the earlier to occur of (a) such Senior Default having been
waived in writing by the Senior Lenders or (b)(i) the Senior Obligations
(including, without limitation, amounts that have become and remain due by
acceleration, together with any interest accruing thereon at the rate provided
in the Senior Credit Agreement) having been paid in full in cash and (ii) all
the commitments by the Senior Lenders to make credit extensions available to the
Company having been irrevocably terminated. In the event that, notwithstanding
the foregoing, the Company shall have made, or the Senior Subordinated Lender
shall have received, any payment or distribution of assets of PHI or any of its
subsidiaries of any kind or character, whether in the form of cash, property,
securities or otherwise, at any time when prohibited by the foregoing provisions
of this Section, then in such event such payment shall be held in trust for the
benefit of, and be immediately paid over to, the Senior Agent on behalf of the
Senior Lenders.
SECTION 1.04 REMEDIES STANDSTILL. During any period of time in which
the Senior Subordinated Lenders are prohibited from obtaining or receiving any
payment on the Subordinated Obligations as provide in SECTIONS 1.02 and 1.03,
the Senior Subordinated Lender shall not take, demand, sue for, accelerate or
commence any remedial proceeding with respect to any amount that is payable on
account of the Subordinated Obligations until (a) all of the Senior Obligations
have been paid in full in cash and (b) all the commitments by the Senior Lenders
to make credit extensions available to the Company have irrevocably terminated.
SECTION 1.05 WAIVER OF CERTAIN RIGHTS. The Senior Subordinated Lender
(a) hereby waives any and all rights that it otherwise might have to require the
Senior Lenders (i) to marshal any property or assets of the Company or (ii)
enforce any guaranty or any security interest or lien given by any guarantor or
other person to secure the payment of any or all of the Senior Obligations, in
each case as a condition precedent to enforcing their rights hereunder, (b)
shall not oppose, interfere or otherwise attempt to prevent or impair the Senior
Lenders from enforcing the security interests on any collateral securing the
repayment of the Senior Obligations and (c) shall not take, or permit to be
taken on its behalf, any action that is inconsistent with the terms of this
ANNEX I.
SECTION 1.06 NO AUTHORITY TO ACT DURING INSOLVENCY PROCEEDINGS. During
the pendency of any Insolvency Proceeding, the Senior Subordinated Lender agrees
not to take any action which it is not permitted to take under this ANNEX I.
SECTION 1.07 SUBROGATION TO RIGHTS OF SENIOR LENDERS. Subject to (a)
the payment in full in cash of the Senior Obligations and (b) the irrevocable
termination of all commitments of the Senior Lenders to make further credit
extensions of credit available to the Company, the Senior Subordinated Lender
shall be subrogated to the rights of the Senior Lenders to receive payments and
distributions of cash, property and securities applicable to the Senior
Obligations until the principal of, premium, if any, and interest on the Senior
Obligations shall be paid in full. For purposes of such subrogation, no payments
or distributions to the Senior Lenders of any cash, property or securities to
which the Senior Subordinated Lender would be entitled except for the provisions
of this ANNEX I, and no payments pursuant to the provisions of this ANNEX I to
the Senior Lenders by the Senior Subordinated Lender, shall, as among the
Company, its creditors other than Senior Lenders and the Senior Subordinated
Lender, be deemed to be a payment or distribution by the Company to or on
account of the Senior Obligations.
SECTION 1.08 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The
provisions of this ANNEX I are and are intended solely for the purpose of
defining the relative rights of the Senior Subordinated Lender, on the one hand,
and the Senior Lenders, on the other hand. Nothing contained in this ANNEX I or
elsewhere or in the Senior Subordinated Credit Agreement shall impair, as among
the Company, its creditors other than the Senior Lenders and the Senior
Subordinated Lender, the obligation of the Company, which is absolute and
unconditional, to pay the principal of, premium, if any, and, interest on the
Senior Obligations and the Senior Subordinated Obligations, in each case in
accordance with its terms.
SECTION 1.09 NO WAIVER OF SUBORDINATION PROVISIONS. No right of any
present or future Senior Lender to enforce the subordination provisions provided
herein shall at any time be prejudiced or impaired in any manner by any act or
failure to act on the part of the Company or the Senior Subordinated Lender, by
any act or failure to act by the Senior Lenders or by any noncompliance by the
Company or the Senior Subordinated Lender with the terms, provisions and
covenants of this ANNEX I, regardless of any knowledge thereof any Senior Lender
may have or be otherwise charged with.
SECTION 1.10 AMENDMENTS, ETC. No provision of this ANNEX I may be
amended, supplemented or otherwise modified in any respect without the consent
of all the Senior Lenders.
SECTION 1.11 THIRD PARTY BENEFICIARIES; SPECIFIC ENFORCEMENT.
(a) The provisions of this ANNEX I are intended for the benefit of,
and shall be enforceable directly by, each Senior Lender. The Senior
Subordinated Lender acknowledges and agrees that the terms of this ANNEX I are a
material inducement to the Senior Lenders to make the Senior Obligations
available to the Company, that the Senior Lenders would not have made the Senior
Obligations available to the Company without the benefit of the provisions
contained in this ANNEX I, and that the Senior Subordinated Lender is receiving
substantial benefits as a result of the Senior Lenders making the Senior
Obligations available to the Company. Accordingly, the Senior Subordinated
Lender agrees that the Senior Agent and the Senior Lenders are third party
beneficiaries of this ANNEX I and may enforce all of its terms directly against
the Senior Subordinated Lender.
(b) Each Senior Lender is hereby authorized to demand specific
performance of the provisions of this ANNEX I, whether or not the Company shall
have complied with any of the provisions hereof applicable to it, at any time
when the Senior Subordinated Lender shall have failed to comply with any of such
provisions applicable to it. The Senior Subordinated Lender hereby irrevocably
waives any defense based on the adequacy of a remedy at law that might be
asserted as a bar to such remedy of specific performance, it being agreed that
the Senior Lenders will suffer irreparable harm if the terms of this ANNEX I are
not strictly enforced in accordance with its terms.
SECTION 1.12 DEFINITIONS. For purposes of this Annex capitalized terms
not defined herein have the meanings ascribed thereto in the Intercreditor
Agreement, dated February __, 2000 among the Senior Agent, the Senior Lenders,
the Senior Subordinated Lender, the Junior Subordinated Trustee and the Junior
Subordinated Lenders, as amended, restated or otherwise modified from time to
time (the "INTERCREDITOR AGREEMENT").
The provisions of this Annex should be construed to supplement the
provisions of the Intercreditor Agreement and should not be interpreted to
restrict or modify the provisions of the Intercreditor Agreement in any manner.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Annex as of the day
and year first above written:
PLANET HOLLYWOOD INTERNATIONAL, INC.
By:
---------------------------------
Name:
Title:
BAY HARBOUR MANAGEMENT L.C.
By:
---------------------------------
Name:
Title:
Exhibit T3D
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
) CHAPTER 11
PLANET HOLLYWOOD )
INTERNATIONAL, INC., et al. ) CASE NO. 99-3612 (JJF)
DEBTORS. ) (JOINTLY ADMINISTERED)
ORDER CONFIRMING THE FIRST AMENDED JOINT PLAN OF
REORGANIZATION DATED DECEMBER 13, 1999 OF PLANET HOLLYWOOD
INTERNATIONAL, INC. AND CERTAIN OF ITS SUBSIDIARIES
Planet Hollywood International, Inc. ("PHI") and twenty-five of its
affiliates that are debtors and debtors-in-possession herein (collectively with
PHI, the "Debtors") having filed their First Amended Joint Plan of
Reorganization dated December 13, 1999 (the "Plan") in accordance with Section
1121 of Title 11 of the United States Code (the "Bankruptcy Code"), 11 U.S.C.
Section 1121, and their First Amended Disclosure Statement pursuant to Section
1125 of the Bankruptcy Code relating to the Plan dated December 13, 1999 (the
"Disclosure Statement"); and the Court by order dated December 14, 1999 (the
"December 14 Order") having approved the Disclosure Statement as containing
adequate information, and the December 14 Order having, INTER ALIA, (i) approved
the procedures for the solicitation and tabulation of votes to accept or reject
the Plan, (ii) established deadlines for voting on and objecting to the Plan,
and (iii) established January 20, 2000 as the date for commencement of the
hearing, pursuant to Section 1129 of the Bankruptcy Code, 11 U.S.C. Section
1129, to consider confirmation of the Plan (the "Confirmation Hearing"); and the
transmittal of materials to Holders1 of Claims, Interests and other
parties-in-interest, and the solicitation of acceptances from Holders of Claims
in Class 5 and Class 6, having been made within the time and in the manner
required by the December 14 Order; and affidavits of publication having been
filed with the Court evidencing that the Confirmation Procedures Notice was
published in accordance with the provisions of the December 14 Order (the
"Publication Affidavits"); and an affidavit of service having been filed with
respect to the mailing of the Confirmation Procedures Notice (the "Mailing
Affidavit"); and objections to confirmation of the Plan having been filed by (i)
Simon Property Group, L.P. ("Simon") (subsequently withdrawn), (ii) 270, L.P.
("270") (subsequently withdrawn), (iii) M. Caransa, b.v. ("Caransa")
(subsequently withdrawn), (iv) Wilroad Associates Limited Partnership
("Wilroad"), (v) State of New Jersey, Division of Taxation ("NJ Tax Division"),
(vi) United States of America for the Internal Revenue Service ("IRS"), (vii)
Stanley Goldich ("Goldich") (subsequently withdrawn in part), (viii) Joseph Mele
("Mele") (subsequently withdrawn); (ix) Al O'Rourke ("O'Rourke"), (x) 601 Pine
Street, L.P. ("601") and (xi) Karen Hojniak (collectively, the "Confirmation
Objections"); and the Court having considered and approved the Stipulation
between the Debtors and America Europe Asia International Trade and Management
Consultants, Ltd. ("AEA") (the "AEA Stipulation") providing, INTER ALIA, for AEA
to vote its $7,000,000 Class 6 Claim in favor of the Plan; and 270 having
elected to change its vote in Class 6 from a rejection to an acceptance of the
Plan; and the Debtors having moved for modification of the Plan pursuant to 11
U.S.C. Section 1127(a) (the "Modification Motion"); and a hearing having been
held on January 20, 2000 (the "Confirmation Hearing") where the Court considered
(i) confirmation of the Plan (as amended by the modifications), (ii) the
withdrawal or settlement of Confirmation Objections, (iii) the Confirmation
Objections not otherwise withdrawn or settled, (iv) the fairness and
appropriateness of substantively consolidating the Debtors' Estates, and (v) the
fairness and reasonableness of the settlements embodied in the Plan; and notice
of the Confirmation Hearing being deemed good and sufficient notice of the
Modification Motion; and upon the entire record of the Debtors' Chapter 11
Cases, including, without limitation, the record made at the Confirmation
Hearing; and after finding that due, sufficient and adequate notice of the
Confirmation Hearing, the substantive consolidation of the Debtors' Estates,
the AEA Stipulation and the settlements and compromises embodied in the Plan has
been given to Holders of Claims, Interests and to all parties-in-interest, and
after due deliberation, the Court makes the following findings of fact and
conclusions of law:2
- ---------
1 All capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Plan or, to the extent not inconsistent
therewith, in the December 14 Order.
2 This Confirmation Order constitutes the Court's findings of fact and
conclusions of law under Federal Rules of Civil Procedure 52, as made
applicable by Bankruptcy Rules 7052 and 9014. Any finding of fact shall
constitute a finding of fact even if it is stated as a conclusion of law,
and any conclusion of law shall constitute a conclusion of law even if it
stated as a finding of fact when necessary and appropriate.
FINDINGS OF FACT AND CONCLUSIONS OF LAW:
A. The District Court has jurisdiction over the Chapter 11 Cases
pursuant to 28 U.S.C. Sections 157(l) and 1334(a). Venue of these proceedings
and the Chapter 11 Cases in this district is proper pursuant to 28 U.S.C.
Sections 1408 and 1409. Confirmation of the Plan is a core proceeding pursuant
to 28 U.S.C. Section 157(b) and this Court has jurisdiction to enter a final
order with respect thereto.
B. Due, timely, sufficient and adequate notice of the Plan, the
Confirmation Hearing, the Modification Motion and the deadlines for voting on,
and filing objections to, the Plan has been given to all known Holders of Claims
and Interests and other parties-in-interest in accordance with the procedures
established by the December 14 Order, the Bankruptcy Code, the Bankruptcy Rules,
the local rules of the Court and all other applicable laws, rules and
regulations.
C. The solicitation by the Debtors of votes accepting or rejecting the
Plan was proposed and conducted in good faith and complied with Sections 1125
and 1126 of the Bankruptcy Code, Bankruptcy Rules 3017 and 3018, the December 14
Order and all other applicable provisions of the Bankruptcy Code and all other
applicable laws, rules and regulations.
D. The procedures by which the ballots and master ballots, as
applicable, were distributed to Holders of Claims against the Debtors in Class 5
and Class 6 under the Plan entitled to vote on the Plan and tabulated were fair,
properly conducted and in accordance with the Bankruptcy Code, the Bankruptcy
Rules, the local rules of this Court, the December 14 Order and all other
applicable laws, rules and regulations.
E. The Class 6 ballot cast by AEA in accordance with the AEA
Stipulation in the amount of $7.0 million to accept the Plan (the "AEA Ballot")
shall be included in the final tabulation of the Class 6 Claims voting on the
Plan. 270 has changed its Class 6 vote rejecting the Plan to an acceptance of
the Plan, and shall be counted as such.
F. As evidenced by the Affidavit of Carole Donlin dated January 19,
2000 certifying the method and results of the ballot tabulation (the "Plan Vote
Certification"), the AEA Ballot and the testimony of Thomas Avallone at the
Confirmation Hearing, (i) at least two-thirds in amount and more than one-half
in number of the Holders of Claims in Class 5 (Old Senior Subordinated Notes
Claims), and Class 6 (General Unsecured Claims) voting on the Plan accepted the
Plan without including the votes of insiders.
G. The classification scheme of Claims and Interests in the Plan is
reasonable and complies with the requirements of Sections 1122 and 1123 of the
Bankruptcy Code. Claims or Interests in each particular Class are substantially
similar to other Claims contained in such Class. In addition, consistent with
Section 1122(b), the Plan contains a convenience class (Class 4) encompassing
Holders of Allowed Claims in an amount of $2000 or less and each Holder of a
General Unsecured Claim that has elected on its Class 6 ballot to reduce the
Allowed amount of its Claim to $2000 or less. The inclusion of a convenience
class in the Plan is reasonable and appropriate for administrative convenience.
H. Classes 1, 2, 3, 4, 7, 10 and 11 are not impaired under the Plan
and, therefore, such Classes are deemed to have accepted the Plan pursuant to
Section 1126(f) of the Bankruptcy Code.
I. Classes 8 and 9 are impaired under the Plan and are deemed to have
rejected the Plan pursuant to Section 1126(g) of the Bankruptcy Code.
J. As required by Section 1129(a)(1) of the Bankruptcy Code, the Plan
complies with all applicable provisions of the Bankruptcy Code.
K. As required by and in compliance with Sections 1123(a)(1), (a)(2)
and (a)(3) of the Bankruptcy Code, the Plan (i) identifies the Classes of Claims
against and Interests in the Debtors, (ii) specifies the Classes of Claims and
Interests that are not impaired under the Plan as well as those that are
impaired under the Plan, and (iii) specifies the treatment of each Class of
Claims or Interests under the Plan.
L. Consistent with Section 1123(a)(4) of the Bankruptcy Code, the
Plan provides the same treatment for each Claim or Interest in a particular
Class, unless a Holder of a Claim or Interest has agreed with the Debtor to a
less favorable treatment.
M. As required by Section 1123(a)(5) of the Bankruptcy Code, the Plan
contemplates adequate means for its execution and implementation including, but
not limited to, (i) the substantive consolidation of the Chapter 11 Cases; (ii)
the utilization of available Cash on hand plus (a) $30 million Cash from the New
Money Investors, (b) an amount not to exceed $25 million as consideration for
the purchase of New Senior Secured Notes or a comparable debt instrument to be
issued by Reorganized PHI on the Effective Date, (c) up to $15.0 million under
the terms of the Working Capital Facility, and (d) proceeds of asset sales;
(iii) the adoption by Reorganized PHI of the Amended PHI By-Laws and Amended PHI
Articles and the filing of the Amended PHI Articles pursuant to Section 6.2.3 of
the Plan; (iv) the issuance by Reorganized PHI of the New Secured PIK Notes, the
New Warrants, the New Common Stock and the New Options; and (v) the vesting in
the applicable Reorganized Debtor of all property of the Consolidated Estates,
and any property and assets acquired by the Debtors or the Reorganized Debtors
under the Plan.
N. As required by Section 1123(a)(6) of the Bankruptcy Code, the Plan
provides for the inclusion in the Amended Articles of a provision prohibiting
the issuance of nonvoting equity securities and for an appropriate distribution
of voting power among New Class A Common Stock and New Class B Common Stock. The
provisions of the Amended By-Laws and the Plan with respect to the manner of
selection of the directors after the Effective Date were the product of good
faith negotiations among the Debtors, the Creditors' Committee and the New Money
Investors and are necessary for the implementation of the Plan.
0. Consistent with Section 1123(a)(7) of the Bankruptcy Code, the Plan
provides for Robert Earl to be chief executive officer of PHI and for the manner
by which the other officers and directors of Reorganized PHI and the other
Reorganized Debtors are to be chosen. The designation of Robert Earl as chief
executive officer on and after the Effective Date, and the manner of selection
and/or designation of the other officers and the directors of the Reorganized
Debtors, as applicable, provided for by the Plan are consistent with the
interests of Holders of Claims and Interests and public policy.
P. Consistent with Sections 1123(b)(1) and (b)(2) of the Bankruptcy
Code, the Plan impairs or leaves unimpaired, as the case may be, each Class of
Claims or Interests, and provides for the assumption, assignment or rejection
of each of the Debtors' executory contracts and unexpired leases which have not
been previously assumed or rejected pursuant to Section 365 of the Bankruptcy
Code, by prior order of the Court as of the Confirmation Hearing.
Q. Consistent with Section 1123 (b)(3) of the Bankruptcy Code, the
Plan provides for either (i) the settlement or adjustment, or (ii) retention
and enforcement by Reorganized PHI, of any claims, demands, rights and causes of
action that any of the Consolidated Debtors or the Consolidated Estates may hold
against any Entity, other than claims that are released by virtue of Section
12.1 of the Plan.
R. As required by Section 1129(a)(2), the Debtors have complied with
all of the applicable provisions of the Bankruptcy Code including the disclosure
and solicitation requirements of Sections 1125 and 1126 of the Bankruptcy Code.
The Debtors transmitted solicitation materials including ballots to the Holders
of Claims in Classes 5 and 6 entitled to vote on the Plan, and non-voting
materials including the Plan Summary to the Holders of Interests, only after the
Court approved the Disclosure Statement and Plan Summary as containing adequate
information and related materials for distribution in compliance with the
requirements of the December 14 Order.
S. As required by Section 1129(a)(3), the Plan has been proposed in
good faith and not by any means forbidden by law. The Debtors' objectives in
proposing the Plan were for the valid business purpose of resolving disputes and
restructuring substantial obligations of the Debtors.
T. As required by Section 1129(a)(4) of the Bankruptcy Code, any
payment made or to be made by the Debtors for services or for costs and expenses
in connection with these Chapter 11 Cases, or in connection with the Plan, other
than those incurred in the ordinary course of business has been approved by this
Court or is subject to the approval by this Court as being reasonable.
U. The Debtors have disclosed their designation of Robert Earl,
presently the President and chief executive officer of PHI, to continue as chief
executive officer of PHI on and after the Effective Date, and have disclosed the
identity of those persons who shall be executive officers and directors of
Reorganized PHI on and after the Effective Date to the extent now known. The
officers and directors for each of the Reorganized Debtors other than PHI are to
be designated on and after the Effective Date by the Board of Directors of
Reorganized PHI.
V. Section 1129(a)(6) of the Bankruptcy Code is inapplicable as there
is no governmental regulatory commission with jurisdiction over any rates
charged by the Debtors.
W. As required by Section 1129(a)(7) of the Bankruptcy Code, with
respect to each impaired Class of Claims, and each impaired Class of Interests,
each Holder of a Claim or Interest of such Class has either accepted the Plan or
will receive or retain under the Plan on account of such Claim or Interest
property of a value, as of the Effective Date, that is not less than the amount
such Holder would receive or retain if the Debtors were liquidated on the
Effective Date under Chapter 7 of the Bankruptcy Code.
X. The Debtors have requested that the Court confirm the Plan under
Section 1129(b) as to Classes 8 and 9.
Y. The Plan is fair and equitable with respect to the Holders of Class
8 Interests as no Class junior to Class 8 under the Plan will receive or retain
any property under the Plan on account of such junior Interest. In addition, the
Plan is fair and equitable with respect to the Holders of Class 9 Claims as no
Class junior to Class 9 under the Plan will receive or retain any property under
the Plan on account of such junior Claim, and the Plan does not discriminate
unfairly with respect to impaired, non-accepting Classes of Claims and
Interests.
Z. The Plan provides for the treatment of Allowed Administrative
Expense Claims and Allowed Priority Claims pursuant to Sections 507(a)(1),
(a)(3), and (a)(8) of the Bankruptcy Code, in accordance with Section
1129(a)(9) of the Bankruptcy Code, except to the extent that the Holder of a
particular Claim has agreed in writing to a different treatment. Administrative
Expense Claims incurred in the ordinary course of the Debtors' business shall be
paid or performed in accordance with the terms and conditions of the parties'
agreement.
AA. The rate of post-Effective Date interest to be paid on account of
Allowed Priority Tax Claims, if any, as provided for by Section 4.5 of the Plan,
is proper under Section 1129(a)(9) of the Bankruptcy Code and shall be the
Treasury Rate except as to the State of New Jersey, Division of Taxation, as to
which the rate shall be the prime rate plus three (3%) percent.
BB. As required by Section 1129(a)(10) of the Bankruptcy Code, and as
demonstrated by the Plan Vote Certification, at least one impaired Class of
Claims has accepted the Plan, determined without including any acceptance of the
Plan by any insider.
CC. The Plan is feasible. The Debtors have demonstrated that on and
after the Effective Date they will have the ability to meet their financial
obligations under the Plan and continue their business in the ordinary course.
As required by Section 1129(a)(11) of the Bankruptcy Code, confirmation of the
Plan is not likely to be followed by the liquidation or the need for further
financial reorganization of the Debtors.
DD. As required by Section 1129(a)(12) of the Bankruptcy Code, all
fees payable under 28 U.S.C. Section 1930, which are unpaid and due to be paid
as of the Effective Date, shall be paid in Cash on or before the Effective Date.
EE. Consistent with Section 1129(a)(13) of the Bankruptcy Code,
Section 6.5 of the Plan provides for Reorganized PHI to continue to pay all
retiree benefits (as defined in Section 1114(a) of the Bankruptcy Code), if any,
maintained or established by the Debtors prior to the Confirmation Date.
FF. Based on the record of the Confirmation Hearing, the Old Common
Stock had no value as of the Petition Date.
GG. The substantive consolidation of the Debtors as provided for by
Section 6.2.6 of the Plan will facilitate the consummation and implementation of
the Plan, is integral to the treatment provided to Creditors under the Plan,
will not prejudice any Creditor of the Estates and is appropriate under the
circumstances.
HH. The Plan is the only plan of reorganization for the Debtors
pending before this or any other Court.
II. The primary purpose of the Plan is not the avoidance of taxes or
the avoidance of the application of Section 5 of the Securities Act of 1933, as
amended (15 U.S.C. Section 77e).
JJ. By order dated January 18, 2000, this Court has approved the
Debtors' execution of a Commitment Letter and Term Sheet dated January 18, 2000
(the "Revolver Commitment") with The CIT Group/Business Credit, Inc. and
Rothschild Recovery Fund (together, the "Working Capital Lenders"), which sets
forth the material terms and conditions of a commitment by the Working Capital
Lenders to provide to PHI and other specified PHI affiliates, subject to the
execution of definitive documentation and satisfaction of other conditions, a
revolving credit facility in an aggregate principal amount not to exceed $15.0
million to become effective upon the Effective Date.
KK. PHI has entered into Subscription Agreements with the New Money
Investors (the "Investor Agreements") pursuant to which the New Money Investors
have agreed to acquire 70 million shares of Reorganized PHI's New Class B Common
Stock for $30.0 million. In accordance with the terms of the Investor
Agreements, the New Money Investors previously made a $5.0 million good faith
deposit into escrow, which money will be applied toward their $30.0 million
funding obligation if the Effective Date of the Plan occurs not later than
February 29,2000.
LL. The Debtors have presented evidence of the likelihood that they
will execute a senior secured loan agreement or comparable agreement for a $22
million term loan (the "Bridge Loan") as contemplated by Section 6.1 of the
Plan.
MM. The record established at the Confirmation Hearing demonstrates
that all conditions precedent to confirmation of the Plan have been satisfied,
or are concurrently satisfied by entry of this Confirmation Order, or have been
waived.
NN. The Debtors have stated that they believe that conditions
precedent to the Effective Date of the Plan, as set forth in Section 10.2 of the
Plan, will occur or be duly waived.
OO. Pursuant to Section 1125(e) of the Bankruptcy Code, the Debtors
and the Releasees shall not be liable on account of their solicitation of
acceptances of the Plan and Reorganized PHI's issuance and/or the Reorganized
Debtors' distribution of Plan Securities pursuant to the Plan in good faith and
in compliance with the applicable provisions of the Bankruptcy Code, for any
violation of applicable law, rule or regulation governing the solicitation of
acceptances of a plan of reorganization or the offer, issuance, sale or purchase
of securities.
PP. Pursuant to Section 1145(a)(1) of the Bankruptcy Code, the offer
and sale of those Plan Securities issued by Reorganized PHI and distributed to
Holders of Allowed Class 5 and Class 6 Claims and Class 8 Interests, in exchange
for or principally in exchange for a Claim against, or an Interest in, the
Debtors shall be exempt from Section 5 of the Securities Act, and any state or
local law requiring registration prior to the offering, issuance, distribution
or sale of securities. The resale of Plan Securities initially distributed to
such Entities pursuant to the Plan, shall be exempt from Section 5 of the
Securities Act and any state or local law requiring registration prior to the
offering, issuance, distribution or sale of securities.
QQ. The Plan Securities issued to the New Money Investors, to the
Lenders on account of the Term Loan, or to any other Entity not exchanging
Claims or Interests for such securities shall be issued pursuant to the
exemption provided by Section 4(2) of the Securities Act.
RR. For all purposes under the Plan, the record established at the
Confirmation Hearing demonstrates that the New Secured PIK Notes have an
aggregate value as of the Confirmation Date of approximately their face amount.
SS. For all purposes under the Plan, the record established at the
Confirmation Hearing demonstrates that the New Class A Common Stock and the New
Class B Common Stock each have a value of approximately $4.2857 per share.
TT. As indicated by the Plan Vote Certification, Holders of Class 5
Claims in the aggregate approximate principal amount of S123.7 million have
elected to receive their Pro Rata Share of New Senior Secured Notes, a Cash fee
and New Class A Common Stock as provided for by the Plan if Bay Harbour
executes an agreement with the Debtors to acquire the New Senior Secured Notes.
UU. As indicated by the Plan Vote Certification, Holders of Class 6
Claims in the aggregate approximate amount of $9.36 million have elected on
their Class 6 ballots to be treated as Class 4 (Convenience Class) Claims.
VV. Absent the funds to be provided by the Working Capital Lenders
pursuant to the Working Capital Facility, the Plan could not be consummated. The
Working Capital Lenders will not provide such funds absent the findings of fact
and conclusions of law set forth in this Confirmation Order. The Working Capital
Lenders are explicitly relying on the findings of fact and conclusions of law
set forth in this Confirmation Order in determining to provide funds pursuant to
the Working Capital Facility. Each of the Reorganized Debtors will receive the
benefits directly or indirectly from the Working Capital Facility in the form of
revolving credit loans and letters of credit.
WW. On a consolidated basis, as of the Effective Date, and after
giving effect to the agreements and transactions contemplated by the Plan on
such date the Reorganized Debtors (i) are adequately capitalized and solvent and
the sum of their property, at a fair valuation, is greater than the sum of their
debts, (ii) are not engaged or to be engaged in business or any transaction for
which their capital is unreasonably small, and (iii) do not intend, or believe,
that they will incur debts beyond their to pay as such debts mature.
XX. The making, delivery, issuance, transfer, assignment, exchange,
filing or recording at any time of any deed, bill of sale, mortgage, leasehold
mortgage, deed of trust, memorandum of lease, assignment, leasehold assignment,
security agreement, lien, financing statement, negative pledge or other
instrument of absolute or collateral transfer by the Debtors and/or Reorganized
Debtors in connection with the consummation of the Plan shall be, and hereby is,
"under a plan confirmed under section 1129 of (the Bankruptcy Code)" within the
meaning of that phrase in section 1146(c) of the Bankruptcy Code.
MODIFICATIONS TO THE PLAN
YY. The modifications to the Plan proposed by the Debtors prior to, at
or in connection with the Confirmation Hearing as set forth below in this
Confirmation Order (the "Plan Modifications") have been reviewed by and
consented to by the Creditors' Committee. The Plan Modifications do not
adversely change the treatment of the Holders of Claims against, or Interests
in, the Debtors. Consequently, in accordance with Section 1127 of the Bankruptcy
Code and Bankruptcy Rule 3019, the Plan as amended is deemed accepted by each
Holder of a Claim against the Debtors that voted to accept the Plan, without the
need to resolicit the votes of such Creditors on the Plan as amended, and is
deemed accepted by each Holder of an unimpaired Claim deemed to have accepted
the Plan in accordance with Section 1126(f) of the Bankruptcy Code.
FINDING THAT THE PLAN IS CONFIRMABLE BASED UPON, INTER ALIA, ALL OF THE
FOREGOING FINDINGS OF FACT AND CONCLUSIONS OF LAW, THE COURT ORDERS THAT:
1. The Plan and each of its provisions, as modified to the limited extent
set forth herein, are hereby confirmed in accordance with Sections 1129(a) and
(b) of the Bankruptcy Code.
2. The Plan is hereby modified as follows:
(a) Article 1, Definitions and Rules of Construction, Intercreditor
and Collateral Agency Agreement
Section 1.61 of the Plan is hereby amended and modified by
replacing the definition in that Section with the following:
"means the agreement governing the respective rights in property
of the Debtors, securing parties to the Working Capital Facility,
the New Senior Secured Notes (or comparable debt instrument), and
the New Secured PIK Notes Indenture in the form acceptable to the
Working Capital Lenders and consistent with the Revolver
Commitment and approved by the Court."
(b) Article 1, Definition and Rules of Construction, Treasury Rate
Section 1.123 of the Plan is hereby amended by replacing the text
in the parenthesis of the definition of "Treasury Rate" with the following:
"(as defined in Section 6621(a)(2) of the Internal Revenue Code
of 1986, as amended)"
(c) Article 1, Definition and Rules of Construction, Working Capital
Facility
Section 1.128 of the Plan is hereby amended and modified by
replacing the definition in that Section with the following:
"means a post-Effective Date Working Capital Facility in an
amount not to exceed $15 million consistent with the terms and
conditions of the Revolver Commitment.
(d) Article 1, Definition and Rules of Construction, Working Capital
Facility Security and Pledge Agreement.
Section 1. 129 of the Plan is hereby deleted in its entirety and
replaced by the following:
"1.129 "Working Capital Facility Loan Documents", means any and
all of the documents and instruments the Working Capital Lenders
require to be executed to evidence and give effect to the Working
Capital Facility, including without limitation, a note, loan
agreement, security agreements, pledge agreements, mortgages,
financing statements, and the Intercreditor and Collateral Agency
Agreement."
(e) SECTION 4.2. ORDINARY COURSE LIABILITIES
Section 4.2 of the Plan is hereby amended and modified by adding
a new sentence at the end of such Section which states as follows:
"There shall be no bar date with respect to the Administrative
Claims of the Internal Revenue Service ("IRS") and the amount of
any Administrative Claim held by the IRS and the rights of the
IRS, if any, to payment in respect thereof shall (i) be
determined in the manner in which the amount of such Claim and
the rights of the IRS would have been resolved or adjudicated if
the Chapter 11 Cases had not been commenced; PROVIDED, HOWEVER,
that the Debtors reserve the right to seek a determination by the
Bankruptcy Court of the validity, amount and priority of any
Administrative Claim under 11 U.S.C. Section 505, (ii) survive
the Effective Date and consummation of the Plan as if the Chapter
11 Cases had not been commenced, and (iii) not be discharged
pursuant to Section 1141 of the Bankruptcy Code."
(f) Section 6.2.6, Substantive Consolidation
Section 6.2.6 of the Plan is hereby amended and modified by
inserting the following text at the beginning of the first sentence of such
Section:
"Except as otherwise provided in Section 6.2.8 hereof, the"
Section 6.2.6 of the Plan is hereby further amended by deleting
the words "Pursuant to the Confirmation Order," from the beginning of the second
sentence of such Section and instead beginning the second sentence of such
Section with "On the Confirmation Date, ..."
(g) Section 6.2.8, Continued Corporate Existence
Section 6.2.8 of the Plan is hereby amended by deleting the words
"Except as otherwise provided in the Plan," from the beginning of the third
sentence of that Section and instead beginning the third sentence of such
Section with "On or after the Effective Date,..."
(h) Section 10.2, Conditions to the Occurrence of the Effective Date.
Section 10.2 of the Plan is hereby amended by adding the
following text as a new subsection (f) to that Section:
"(f) The Working Capital Facility Loan Documents shall have been
approved by Order of the Bankruptcy Court together with a finding
as to the applicability of 11 U.S.C. Section 364(e). The
conditions to the effectiveness of the Working Capital Facility
and the New Senior Secured Notes (or comparable debt instrument)
shall have been satisfied. This condition cannot be waived by the
Debtors without the consent of the Working Capital Lenders, the
Holders of the New Senior Secured Notes (or comparable debt
instrument) and the Creditors' Committee.
(i) SECTION 12.1, RELEASES
Section 12.1 of the Plan is hereby amended and modified by
replacing the second full paragraph of that Section with the following:
On the Effective Date, each Holder of a Claim or Interest shall
be deemed to have released unconditionally, and hereby is deemed
to release unconditionally on such date, the Releasees, from any
and all rights, claims, causes of action, obligations, suits,
judgments, damages and liabilities whatsoever which any such
Holder may be entitled to assert, whether known or unknown,
foreseen or unforeseen, existing or hereafter arising, in law,
equity or otherwise, based in whole or in part upon any act or
omission, transaction, event or other occurrence taking place on
or before the Effective Date in any way relating to Reorganized
PHI, the other Reorganized Debtors, the Chapter 11 Cases or the
Plan, except that no Releasees shall be released from acts or
omissions which are the result of fraud, gross negligence,
willful misconduct or willful violation of the securities laws or
the Internal Revenue Code. The releases provided for herein shall
not preclude police, federal tax, or regulatory agencies from
fulfilling their statutory duties. Notwithstanding anything to
the contrary in the Plan or the Confirmation Order, the releases
provided for herein shall not apply to the Claims, if any, of the
United States."
(j) SECTION 12.4, GENERAL INJUNCTION
Section 12.4 of the Plan is hereby amended and modified by
replacing both provisos at the end of this Section with the following:
"PROVIDED, HOWEVER, that each Holder of a Claim or Interest may,
to the extent permitted by and in accordance with the provisions
of the Plan, commence or continue any action or proceeding to
determine the amount of its Claim or Interest in the Bankruptcy
Court or any other court of competent jurisdiction, and all
Holders of Claims or Interests shall be entitled to enforce their
rights under the Plan and the Plan Documents, PROVIDED FURTHER,
HOWEVER, that nothing in the Plan shall restrain and enjoin all
Entities who received or are Holders of Plan Securities and all
Holders of Claims against and Interests in the Estates from
taking any action to enforce liability arising from acts or
omissions which are the result of fraud, gross negligence,
willful misconduct or willful violation of the securities laws or
the Internal Revenue Code. The injunction provided for herein
shall not preclude police, federal tax, or regulatory agencies
from fulfilling their statutory duties. Notwithstanding anything
to the contrary in the Plan or the Confirmation Order the
injunction provided for herein shall not apply to bar the Claims,
if any, of the United States."
3. For the reasons set forth on the record of the Confirmation Hearing,
each and every Confirmation Objection, to the extent not withdrawn or resolved
pursuant to the terms of this Confirmation Order, including the Plan
Modifications set forth herein, is overruled.
4. Subject to the provisions of the Plan (including any Plan Document) and
this Confirmation Order, the Debtors will, as Reorganized Debtors, continue to
exist after the Effective Date, with all the powers of a corporation or
partnership, as applicable, under applicable law and without prejudice to any
right to alter or terminate such existence (whether by merger or otherwise)
under applicable law.
5. Consistent with the Plan, the following agreements and documents,
substantially in the form of those filed with the Court at or after the
Confirmation Hearing, as they may be modified by the Debtors with the consent of
the Creditors' Committee including all the annexes and exhibits thereto, and all
terms and provisions thereof (collectively, the "Plan Documents") are hereby
approved in all respects:
a. Amended and Restated PHI Certificate of Incorporation (the "Amended PHI
Articles");
b. Amended and Restated PHI By-Laws (the "Amended PHI By-Laws");
c. New Warrant Agreement; and New Warrants; and
d. Registration Rights Agreement.
6. PHI, the other Debtors, Reorganized PHI the other Reorganized Debtors
and their directors, officers and agents are hereby authorized to enter into,
execute, deliver, file and/or implement the Plan Documents and other documents
and instruments substantially consistent therewith or incidental thereto and any
amendments, supplements or modifications to such Plan Documents as may be
appropriate, and to take such other steps and perform such other acts as may be
necessary to implement and effectuate the Plan, the Plan Documents, all other
related instruments and documents and this Confirmation Order, and to satisfy
all other conditions precedent to the implementation and effectiveness of the
Plan.
7. The Plan and all other agreements provided for under the Plan, including
the Plan Documents, and all transactions, documents, instruments and agreements
referred to therein, contemplated thereunder or executed and delivered in
connection therewith, and any amendments or modifications thereto in substantial
conformity therewith are approved, and the Debtors are authorized and directed
to enter into and to perform such agreements according to their terms.
8. Pursuant to Section 6.2.4 of the Plan, on the Effective Date, the
following persons shall be appointed to the Board of Directors of PHI:
(a) Robert Earl
(b) Claudio Gonzalez
(c) Thomas Avallone
(d) Steven Grapstein
(e) Mustafa Al Heijelen
(f) two Creditors' Committee designees
The appointment of the foregoing persons to the Board of Directors of PHI is
consistent with the interest of Holders of Claims against, and Interests in, the
Debtors, and with public policy.
9. Pursuant to Section 6.2.4 of the Plan, on the Effective Date, Robert
Earl shall be the chief executive officer of PHI. The appointment of Robert Earl
as chief executive officer of PHI is consistent with the interests of Holders of
Claims against, and Interests in, the Debtors, and with public policy.
10. Reorganized PHI is authorized to issue the Plan Securities consistent
with the terms of the applicable Plan Documents.
SUBSTANTIVE CONSOLIDATION
11. Except as otherwise provided in Section 6.2.8 of the Plan, the
substantive consolidation of the Chapter 11 Cases into a single case solely for
purposes of confirmation and consummation of the Plan is hereby approved in
accordance with Section 105(a) of the Bankruptcy Code, and (i) all assets and
all proceeds thereof and all liabilities of the Consolidated Debtors will be
merged or treated as though they were merged with and into the assets and
liabilities of Reorganized PHI; (ii) all Consolidated Claims and Claims among
the Consolidated Debtors will receive no distribution under the Plan; (iii) any
obligations of any Consolidated Debtor, and all guarantees thereof executed by
one or more of the Consolidated Debtors, and any Claims filed or to be filed in
connection with any such obligation and guarantee will be deemed one Claim
against Reorganized PHI; (iv) each and every Claim filed in the individual
Chapter 11 Case of any of the Consolidated Debtors will be deemed filed against
Reorganized PHI; and (v) for purposes of determining the availability of the
right of set-off under Section 553 of the Bankruptcy Code, the Consolidated
Debtors shall be treated for purposes of the Plan as one entity so that, subject
to the other provisions of Section 553 of the Bankruptcy Code, debts due to any
of the Consolidated Debtors may be setoff against the debts of any of the
Consolidated Debtors.
12. On and after the Effective Date, PHI shall exist as a corporation duly
organized under the laws of Delaware, and the other Reorganized Debtors shall
exist as entities duly organized under the laws of their respective states of
incorporation or organization with each such entity having assets and
liabilities separate and apart from and not merged with assets and liabilities
of the other Reorganized Debtors.
WORKING CAPITAL FACILITY
13. The Debtors, Reorganized PHI, the other Reorganized Debtors and their
directors, officers and agents are hereby authorized to enter into, execute and
deliver the Working Capital Facility Loan Documents to be negotiated with the
Working Capital Lenders if such documents are approved by the Creditors'
Committee and to take such other steps and perform such other acts as may be
necessary to effectuate the terms thereof, including, without limitation, the
payment of all appropriate fees and expenses to, the Working Capital Lenders.
All liens and security interests provided for therein shall be deemed to be
authorized and approved, without any further act required; provided, however,
that the Working Capital Lenders are authorized to file all documents and
instruments and to take all actions required under the Working Capital Facility
Loan Documents and each of the Reorganized Debtors are authorized and directed
to cooperate in connection with such actions.
NEW SENIOR SECURED NOTES
14. As of the Effective Date, the Debtors shall have effectuated a sale of
up to $25 million of New Senior Secured Notes or other instruments on comparable
terms as provided in the Plan, or as modified by agreement between the Debtors
and the Creditors' Committee.
LIENS AND SECURITY INTERESTS
15. On the Effective Date, transfers of property by the Debtors
contemplated by the Plan, including with respect to the Working Capital
Facility, the New Senior Secured Notes (or comparable debt instruments) and the
other Plan Documents, will be legal, valid, binding and effective transfers of
property and will vest, to the fullest extent permitted by the Bankruptcy Code,
good title to such property in the respective transferee, free and clear of all
Liens, Claims and Encumbrances, except as otherwise provided by the Plan,
including as required to implement the New Senior Secured Note obligations, the
Working Capital Facility and the New Secured PIK Notes Indenture, and this
Confirmation Order.
16. On and after the Effective Date, the creation and perfection of the
Liens securing the New Senior Secured Note obligations, the Working Capital
Facility and the New Secured PIK Notes and the execution and delivery of
guarantees by any of the Debtors thereunder will not be made with actual intent
to hinder, delay or defraud any person, will be made for reasonably equivalent
value and fair consideration, will not result in the insolvency of any of the
Reorganized Debtors, will not leave any of the Reorganized Debtors with
unreasonably small capital with which to conduct their businesses, will not be
made with the intent to, or belief that they will, incur debts that the
respective Reorganized Debtors would be unable to pay as they become due, nor
will such transfers or the incurring of such obligations in any manner
constitute fraudulent conveyances or transfers.
BINDING EFFECT
17. Pursuant to Section 1141(a) of the Bankruptcy Code, from and after
the Confirmation Date, the Plan shall be binding upon and inure to the benefit
of the Reorganized Debtors, all Holders of Claims against and Interests in, the
Debtors and any other party-in-interest in these Chapter 11 Cases and their
respective successors and assigns, regardless of whether the Claims of such
Holders or obligations of any party-in-interest (i) are in a Class that is
impaired under the Plan, (ii) have accepted the Plan, or (ii) have filed a proof
of claim.
VESTING
18. Except as otherwise provided in the Plan (including any Plan Document)
or any other indentures, instruments or agreements to be executed and delivered
pursuant to the Plan or this Confirmation Order, upon the Effective Date, all
property of the Consolidated Estates shall vest in and be retained by
Reorganized PHI or the other Reorganized Debtors, as applicable, or distributed
to Creditors or Interest Holders as provided in the Plan, free and clear of all
Liens, Encumbrances and Interests of Creditors and Holders of Interests
expressly provided for in the Plan. On and after the Effective Date, the
Reorganized Debtors may operate their businesses and may use, acquire and
dispose of property and compromise and settle any Claims against them without
supervision or approval by this Court and free of any restrictions of the
Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly
imposed by the Plan and this Confirmation Order.
DISCHARGE
19. Except as otherwise expressly provided in the Plan or this Confirmation
Order, as of the Effective Date there shall be discharged, pursuant to Section
1141(d) of the Bankruptcy Code, existing debts of and Claims of any kind,
nature or description against the Debtors, any of their assets or properties or
any property dealt with under the Plan, and all obligations of the Debtors,
directly or as guarantors, under the SunTrust Agreements and the Old Senior
Subordinated Notes Indenture. Upon the Effective Date, the Debtors shall be
discharged and released to the extent permitted by Section 1141 of the
Bankruptcy Code from any and all Claims and all debts of the kind specified in
Sections 502(g), 502(h) and 502(i) of the Bankruptcy Code, whether or not a
proof of claim based upon such Claim is Filed or deemed Filed or the Holder of a
Claim based upon such debt has accepted the Plan.
INJUNCTION
20. Except as otherwise provided in the Plan or this Confirmation Order,
all Holders of Claims and Interests shall be precluded from asserting against
the Debtors, any of their assets or properties or any property dealt with under
the Plan, any or other further Claim based upon any act or omission, transaction
or other activity of any kind or nature that occurred prior to the Confirmation
Date, whether or not such Holder Filed a proof of claim. Except, as otherwise
provided in the Plan or this Confirmation Order, the discharge of all existing
debts and Claims effected hereby to the extent permitted by Section 1141. shall
void any judgment against the Debtors obtained at any time to the extent it
relates to a discharged Claim and operates as an injunction against the
commencement or continued prosecution of any action against the Debtors,
Reorganized PHI, the other Reorganized Debtors, or any of their respective
properties to the extent it relates to a discharged Claim.
21. Except as otherwise provided in the Plan or this Confirmation Order,
all Entities who received or are Holders of Plan Securities and all Holders of
Claims against, and Interests in, the Estates are permanently restrained and
enjoined after the Confirmation Date from commencing, continuing or taking any
act, to enforce, or from collecting or recovering by any manner or means, any
right, claim or cause of action related to any Old Security or any claim,
against any of the Debtors or any Foreign Subsidiary or Domestic Subsidiary.
22. Notwithstanding anything to the contrary in the Plan or this
Confirmation Order, the releases provided for in Section 12.1 of the Plan and
the injunction provided for in Section 12.4 of the Plan shall not apply to bar
or otherwise impair Caransa from (i) finalizing an agreement in principle
negotiated with PH Amsterdam B.V. ("PH Amsterdam"), an affiliate of PHI and a
Netherlands company, and the Trustee in the pending Netherlands insolvency
proceeding of PH Amsterdam, in respect of Caransa's claim under a lease with PH
Amsterdam and a certain loan agreement between Caransa and PH Amsterdam and (ii)
otherwise pursuing its rights and claims as against PH Amsterdam in the context
of PH Amsterdam's Netherlands insolvency proceeding and otherwise pursuant to
Dutch law and in respect of the real property subject to the lease; PROVIDED,
HOWEVER, that Caransa will reduce the amount of its Claim against PHI by the
amount of any recovery obtained in PH Amsterdam's Netherlands insolvency
proceeding or otherwise pursuant to Dutch law.
23. The releases provided for in Section 12.1 of the Plan and the
injunction provided for in Section 12.4 of the Plan shall not prevent the NJ Tax
Division from pursuing recovery against the applicable Reorganized Debtors
either in the Bankruptcy Court or in the applicable non-bankruptcy court and
thereafter from pursuing collection of trust fund taxes from responsible persons
of the Debtors.
RELEASES
24. Except as otherwise provided for in the Plan or this Confirmation
Order, the Releases provided for in Sections 12.1 of the Plan and the General
Injunction provided for in Section 12.4 of the Plan are hereby approved and
authorized and incorporated herein as if fully set forth herein.
25. Except as otherwise provided for in the Plan or this Confirmation
Order, pursuant to Section 12.3 of the Plan, neither the Debtors, Reorganized
PHI, the other Reorganized Debtors, nor any of their respective employees,
officers, directors, agents, or representatives, nor any Professionals employed
by any of them, nor the Creditors' Committee, or any of its members, agents,
representatives, or professional advisors shall have or incur any liability to
any Entity for any act taken or omission made in good faith in connection with
or related to formulating, implementing, confirming or consummating the Plan, or
any contract, instrument, release, or other agreement or document created in
connection with the Plan.
26. Nothing contained in the Plan, including, but not limited to, Article
12, or in this Confirmation Order shall be construed to effect a waiver of the
rights of any party under Section 1125(e) of the Bankruptcy Code or the waiver
of the rights of any party to indemnification.
TRANSFER TAXES
27. Pursuant to Section 1146(c) of the Bankruptcy Code, neither (i) the
issuance, transfer or exchange of any security under the Plan, nor the making or
delivery of any instrument of transfer, nor the revesting, transfer or sale of
any real or personal property of the Debtors, (ii) the making, delivery,
creation, assignment, amendment or recording of any note or other obligation for
the payment of money, any deed or other instrument of transfer, in connection
with, or in furtherance of, the Plan, or as further provided under Section 14.8
of the Plan, including without limitation the sale of the Debtors' interests in
1567 Broadway, New York, New York, pursuant to the Purchase and Sale Agreement
dated January 4, 2000 between PH (Region III), Inc. and Intell 1567 LLC (the
"Agreement") and in connection with the Atlantic Transaction (as such term is
defined in the Agreement), shall be subject to any document recording tax, stamp
tax, or other similar tax or governmental assessment. Each and every recorder of
deeds or similar official for any county, city or governmental unit in which any
instrument under, in furtherance of, or in connection with the Plan, is to be
recorded, is directed to accept for filing or recording this Confirmation Order
and any and all such instruments, without requiring the payment of any
documentary stamp tax, deed stamps, stamp tax, transfer tax, intangible tax or
other similar tax.
28. Distributions required to be made to the Holders of Allowed Claims
against, and Allowed Interests in, the Debtors shall be made to the Entities
entitled thereto as provided in the Plan. The record date for determining which
Holders of Allowed Claims and Allowed Interests are entitled to receive
distributions under the Plan shall be the fifth Business Day prior to the
Effective Date (the "Distribution Record Date"). Pursuant to Section 6.3.7 of
the Plan, the respective transfer registers for the Old Securities will be
closed, and Reorganized PHI, the Old Indenture Trustee, the Old Stock Transfer
Agent and their respective agents shall have no obligation to recognize the
transfer of any Old Securities occurring after the Distribution Record Date.
29. Notice of the date which shall be the Distribution Record Date shall be
provided to the Old Indenture Trustee, the Old Stock Transfer Agent and their
respective agents, if any, at least three (3) Business Days prior to the
Distribution Record Date.
30. Those Plan Securities that are issued by Reorganized PHI to the Holders
of Allowed Claims in Classes 5 and 6, and Allowed Interests in Class 8, under
the Plan in exchange for a Claim against, an Interest in, or an Administrative
Claim against the Debtors, or principally in such exchange and partly for cash
or property, are exempt from registration pursuant to Section 1145 of the
Bankruptcy Code and those Plan Securities may be resold by such Holder without
restriction except to the extent that such Holder is deemed an underwriter with
respect to those securities pursuant to Section 1145(b)(1) of the Bankruptcy
Code.
31. For purposes of distribution, multiple General Unsecured Claims (i)
Filed by a single Creditor against the same or multiple Debtors and/or (ii) of a
single Creditor scheduled by multiple Debtors, shall be aggregated for all
purposes under the Plan including, but not limited to, for purposes of
determining whether the Holder of such Allowed General Unsecured Claims shall be
treated as the Holder of a Class 4 Convenience Class Claim or as the Holder of a
Class 6 General Unsecured Claim.
32. The Debtors are hereby authorized to transmit a supplemental
Convenience Class Election form (the "Election Form"), substantially in the form
of that annexed to this Confirmation Order as Exhibit A, which form is hereby
approved, permitting Creditors to elect to be treated as Class 4 Claims under
the Plan, to those Creditors that were not previously forwarded a Class 6 ballot
to vote on the Plan and that (i) Filed a proof of claim against one or more of
the Debtors asserting a General Unsecured Claim either in the amount of $2,000
or less or which was received by the Balloting Agent after the December 6, 1999
Record Date previously established by the Court, and (ii) was scheduled by the
Debtors in the schedules of liabilities Filed with the Court. The Debtors may
make modifications to the Election Form with the consent of the Creditors'
Committee. Creditors entitled to receive the Election Form shall be given at
least 20 days from the date of transmittal by first class mail of the Election
Form to return the Election Form to the Balloting Agent in the manner provided
for on the face of the Election Form.
33. The Debtors are also authorized to prepare in consultation with the
Creditors' Committee and to send a notice to those Holders of General Unsecured
Claims with multiple proofs of claim Filed against the Debtors and/or scheduled
by multiple Debtors in their schedules of liabilities that elected on Class 6
ballots to be treated as Convenience Claims under the Plan. The notice will
inform each such Creditor that all of its Allowed Class 6 Claims will be
aggregated for purposes of receiving one distribution from the Debtors, and
accordingly, will provide such Creditors with the opportunity to nullify the
previous Convenience Class Election such Creditor made. Creditors shall be
provided with at least twenty (20) days from the date of transmittal of the
notice by first class mail to notify the Balloting Agent, in the manner provided
in the notice, of their decisions to nullify their prior Convenience Class
Election.
34. Without limiting the Registration Rights Agreement, Reorganized PHI is
authorized and directed to file, not later than 90 days after the Effective
Date, a shelf registration relating to the securities issued to the Holders of
the New Common Stock, the New Senior Secured Notes (or comparable debt
instruments), the New Secured PIK Notes and the New Warrants, and Reorganized
PHI is directed to use its reasonable best efforts to have such shelf
registration declared effective as soon as practicable after such filing and to
keep the shelf registration statement continuously effective until the second
anniversary of the Effective Date.
35. Confirmation of the Plan will not affect the valid set off rights, if
any, of the United States of America.
36. In addition to the SunTrust Agreements, the Debtors and SunTrust are
parties to a certain ACH Agreement (the "ACH Agreement") pursuant to which
SunTrust provides various payroll processing and payment services to the
Debtors. Pursuant to a Security Agreement dated April 22, 1999, PHI granted a
perfected first priority security interest in and lien on a renewable
certificate of deposit issued by SunTrust in the face amount of $895,000. The
Claims, if any, of SunTrust under the ACH Agreement shall be unimpaired and
treated as Class 3 (Miscellaneous Secured) Claims under the Plan. After the
Effective Date, the ACH Agreement shall continue in full force and effect unless
otherwise agreed by Sun Trust and the Debtors, and subject to the Debtors'
rights of termination in accordance with the ACH Agreement.
EXECUTORY CONTRACTS
37. Except as otherwise provided by orders of this Court, pursuant to
Section 9.1 of the Plan, and in accordance with Section 1123(b)(2) of the
Bankruptcy Code, the Debtors will be deemed to have rejected as of the Effective
Date each executory contract or unexpired lease that has not been previously
assumed or rejected pursuant to a prior order of this Court or which has not
been designated to be assumed by Reorganized PHI or any applicable other
Reorganized Debtor at or prior to the Confirmation Hearing.
38. Pursuant to Section 9.2 of the Plan, any Claim for damages arising by
reason of the rejection of an executory contract or unexpired lease pursuant to
the Plan, if not previously evidenced by a Filed proof of claim or barred by a
Final Order shall be forever barred and shall not be enforceable against the
Debtors, the Reorganized Debtors or their successors or assigns or their
properties or agents, unless a proof of claim is filed with the Bankruptcy Court
and served within thirty (30) days after the later of (i) the entry of a Final
Order authorizing such rejection other than this Confirmation Order and (ii) the
Effective Date.
39. Pursuant to Section 9.3 of the Plan, each executory contract and
unexpired lease to be assumed pursuant to the Plan, including each Landlord
Settlement Agreement, shall be reinstated and rendered unimpaired in accordance
with Sections 1124(2) and 365(b)(1) of the Bankruptcy Code, or in accordance
with the applicable agreement approved by the Court, and the Debtors shall cure
or provide adequate assurance that they will cure any monetary defaults. The
Court retains jurisdiction to resolve disputes regarding the cure amount and the
Debtors' provision of adequate assurance of future performance.
FINAL COMPENSATION APPLICATIONS
40. All applications for a final allowance of compensation and the
reimbursement of expenses pursuant to Sections 327, 328, 330, 331 or 503(b) of
the Bankruptcy Code Filed by Professionals (other than Professionals retained by
the Old Indenture Trustee) for services rendered before the Confirmation Date
(the "Final Compensation Application") shall be Filed and served on Reorganized
PHI, the Creditors' Committee and the United States Trustee no later than thirty
(30) days after the Effective Date or such later date as the Court shall
approve; PROVIDED HOWEVER, that any Professional or other person that fails to
timely file an application for allowance shall be forever barred from asserting
such Claims against the Reorganized Debtors. Objections to such Compensation
Applications shall be due no later than fifteen (15) days after service of the
related application. Hearings on the Compensation Applications shall be
established by the Court. After the Effective Date, each Professional may
receive payment for compensation earned and reimbursement of expenses incurred
subsequent to the Confirmation Date from Reorganized PHI relating to the
implementation and consummation of the Plan without the need for filing
applications for post-Confirmation Date services or obtaining approval of the
Court; PROVIDED HOWEVER, that no such fees and expenses shall be paid without
receipt by Reorganized PHI of a detailed written invoice from the Professional.
The Court shall retain jurisdiction to determine any disputes concerning
post-Confirmation Date fee requests related to the implementation of the Plan.
41. The requirement, set forth in the Court's October 13, 1999
Administrative Order with respect to compensation and reimbursement of
Professionals, that interim Professional fee applications for the period from
December 1, 1999 through December 31, 1999 be submitted by January 25, 2000 is
hereby waived, and all applications for approval of Professionals' fees for such
period and any subsequent periods may be included in such Professionals' Final
Compensation Application.
BAR DATE FOR TAX CLAIMS OF GOVERNMENTAL UNITS
42. Pursuant to Section 502(b)(9) and Bankruptcy Rule 3003(c)(3), all
governmental units (as defined in Section 101(27) of the Bankruptcy Code)
seeking to have an Allowed Claim (as defined in Section 101(5) of the
Bankruptcy Code) in respect of taxes against any or all of the Debtors which
arose prior to the Petition Date, must file a written proof of such Claim with
the Bankruptcy Court that substantially conforms to Official Form No. 10, by
sending an original proof of claim to Donlin Recano & Company, Inc. As Agent for
the United States Bankruptcy Court (the "Claims Agent") re: Planet Hollywood
International, Inc. ET AL., P.O. Box 2089, Murray Hill Station, New York, New
York 10156 or, if by overnight courier or by hand to the Claims Agent at 419
Park Avenue South, Suite 1206, New York, New York 10016 and serve copies upon
(a) Planet Hollywood International, Inc., 8669 Commodity Circle, Orlando,
Florida 32819, Attention: General Counsel; and (b) Debtors' Co-Counsel, Stroock
& Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038, Attention:
Robin E. Keller, Esq. and Young Conaway Stargatt & Taylor, LLP, Rodney Square
North, Eleventh Floor, Wilmington, Delaware 19899-0391, Attention: James L.
Patton, Jr., Esq., so as to be received on or before 4:00 p.m. Eastern Time on
April 10, 2000, which is the date 181 days after the Petition Date (the
"Governmental Unit Claims Bar Date").
43. The Debtors shall give notice of the Governmental Unit Claims Bar Date
by forwarding a copy of a Notice, substantially in the form of that annexed
hereto as Exhibit B, the form of which is hereby approved, to each known
governmental unit at least 35 days before the Governmental Unit Claims Bar Date.
Notice in the manner provided for hereby shall be deemed good, adequate and
sufficient notice of the Governmental Unit Claims Bar Date if it is served,
together with a proof of claim form via the United States Mail, first class
postage prepaid.
44. Any governmental unit that is required to File a timely proof of claim
against the Debtors in the form and manner specified by this Confirmation Order
and that fails to do so on or before the Governmental Unit Claims Bar Date shall
not, with respect to such Claims, receive or be entitled to receive any payment
or distribution of property from the Debtors, the Reorganized Debtors or, their
successors or assigns with respect to such Claims and shall be forever barred,
estopped and enjoined from asserting such Claims against the Debtors, the
Reorganized Debtor or their successors or assigns.
45. All objections to Tax Claims asserted by governmental units in respect
of the Governmental Unit Claims Bar Date shall be Filed and served upon the
Holder of such Claim on or prior to sixty (60) days after the Governmental Unit
Claims Bar Date; PROVIDED HOWEVER, that objections Filed by the Debtors against
the Tax Claims filed by the IRS shall be Filed and served upon the IRS and its
counsel on or after the later of (i) sixty (60) days after the Governmental Unit
Claims Bar Date or (ii) sixty (60) days after notification to Reorganized PHI of
the determination by the Joint Committee on Taxation of the United States
Congress with respect to a refund issued to the Debtors in connection with the
Debtors' 1996 and 1997 tax years.
JURISDICTION
46. Notwithstanding the entry of this Confirmation Order, the occurrence of
the Effective Date or substantial consummation of the Plan, the Court will
retain jurisdiction of all matters arising out of, or related to, the Chapter 11
Cases as necessary to ensure that the purpose and the intent of the Plan are
carried out and otherwise to the full extent provided herein and in Section 13.1
of the Plan.
DISSOLUTION OF THE COMMITTEE
47. The Creditors' Committee will be deemed dissolved and the duties of the
Creditors' Committee and the Professionals retained thereby will thereupon
terminate in accordance with Section 14.12 of the Plan, except that counsel for
the Creditors' Committee shall have standing to object to any Final Compensation
Application Filed in these Chapter 11 Cases. The Professionals retained by the
Creditors' Committee and the members thereof shall not be entitled to
compensation or the reimbursement of expenses for any services rendered after
the Effective Date except with respect to any appeal pending on the Effective
Date of an Order entered in the Chapter 11 Cases or to the extent provided
for in Section 14.12 of the Plan.
48. If the Debtors are for any reason unable to consummate the Plan after
the Confirmation Date: (a) nothing contained herein shall be deemed to
constitute a waiver or release of any Claims by or against the Debtors or to
prejudice in any manner the rights of the Debtors or any Persons in any further
proceedings involving the Debtors; and (b) the result shall be the same as if
this Order were not entered, the Plan was not filed and no actions were taken to
effectuate it.
49. Failure specifically to include or reference particular sections or
provisions of the Plan or any related agreement in this Order shall not diminish
or impair the effectiveness of such sections or provisions, it being the intent
of the Court that the Plan be confirmed and such related agreements be approved
in their entirety.
50. To the extent of any inconsistency between the terms of the Plan and
this Confirmation Order, those of the Confirmation Order shall govern.
Dated: Wilmington, Delaware
January 21, 2000
-------------------------------------
Joseph J. Farnan, Jr.
Chief Judge, United States District Court
<PAGE>
EXHIBIT A
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re
) CHAPTER 11
PLANET HOLLYWOOD )
INTERNATIONAL, INC., ET AL. ) CASE NO. 99-3612 (JJF)
Debtors. ) JOINTLY ADMINISTERED
FORM FOR ELECTION INTO CLASS 4 CONVENIENCE CLASS UNDER
THE FIRST AMENDED JOINT PLAN OF REORGANIZATION OF
PLANET HOLLYWOOD INTERNATIONAL, INC. AND
CERTAIN OF ITS SUBSIDIARIES
PLEASE READ AND FOLLOW THE INSTRUCTIONS ON THIS ELECTION FORM CAREFULLY. PLEASE
COMPLETE, SIGN, AND DATE THIS ELECTION FORM AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE PROMPTLY TO DONLIN, RECANO & COMPANY, INC. BY 5:00 P.M,
EASTERN TIME, ON OR BEFORE FEBRUARY 18, 2000.
On January __, 2000, the United States District Court for the District of
Delaware entered an order (the "Confirmation Order") confirming the First
Amended Joint Plan of Reorganization dated December 13, 1999 of Planet Hollywood
International, Inc. and certain of its subsidiaries. The Confirmation Order also
provides that for purposes of distribution, multiple General Unsecured Claims
(i) Filed by a single Creditor against the same or multiple Debtors and/or (ii)
of a single Creditor scheduled by the Debtors, shall be aggregated for all
purposes under the Plan including, but not limited to, for purposes of
determining whether the Holder of Allowed General Unsecured Claims shall be
treated as the Holder of a Class 4 Convenience Class Claim or as the Holder of a
Class 6 General Unsecured Claim. Accordingly, Holders of Scheduled and/or Filed
multiple General Unsecured Claims are being provided the opportunity to elect
to be treated as Class 4 Convenience Class Claims.
ITEM 1. CONVENIENCE CLASS ELECTION. The Plan provides that any Holder of a
General Unsecured Claim in an amount greater that $2000 may voluntarily agree to
reduce its Allowed General Unsecured Claim amount to $2000 in exchange for being
paid $2000 in Cash on the later of (i) the Effective Date, (ii) the date such
Claim becomes an Allowed Claim, or (iii) as otherwise provided by Order of the
Court. This will be your only opportunity to make this election. If you wish to
make this election, please complete check the following box:
|_| THE UNDERSIGNED HEREBY AGREES TO VOLUNTARILY REDUCE THE ALLOWED
AMOUNT OF ITS CLASS 6 GENERAL UNSECURED CLAIM TO $2000 AND TO
HAVE ITS CLAIM TREATED AS A CLASS 4 CONVENIENCE CLAIM UNDER THE
PLAN
ITEM 2. By signing this form, the undersigned certifies that (i) the
Holder of the General Unsecured Claims set forth in Item 2 has full power and
authority to exercise the Convenience Class election set forth in Item 1, and
(ii) the information set forth above is complete and correct in all respects.
The undersigned also acknowledges that this election is governed by all terms
and conditions of the Plan and the description thereof in the Disclosure
Statement
NAME ___________________________________
(Print or Type)
___________________________________
Federal Tax I.D. No. or
Social Security No.
Signature: _____________________________
By: ___________________________________
(If Appropriate)
Address: ______________________________
Street ______________________________
______________________________
City, State and Zip Code
Telephone Number: (__) _________________
Date Completed: ________________________
<PAGE>
EXHIBIT B
<PAGE>
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
IN RE:
PLANET HOLLYWOOD ) CHAPTER 11
INTERNATIONAL, INC., ET AL. )
) CASE NO. 99-3612 (JJF)
DEBTORS. )
) JOINTLY ADMINISTERED
NOTICE OF ENTRY OF ORDER FIXING LAST DAY
FOR GOVERNMENTAL UNITS TO FILE
PROOFS OF CLAIM ASSERTING TAX CLAIMS
AGAINST THE DEBTORS
TO ALL PERSONS AND ENTITIES WITH CLAIMS AGAINST THE DEBTORS:
PLEASE TAKE NOTICE, that the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court") has entered an order dated January
[ ], 2000, which, among other matters, confirmed the Debtors' First Amended
Joint Plan of Reorganization Dated December 13, 1999 and requires all
Governmental Units (as such term is defined in Section 101(27) of the Bankruptcy
Code) to assert claims (as such term is defined in Section 101(5) of the
Bankruptcy Code) for taxes against PLANET HOLLYWOOD INTERNATIONAL, INC., CASE
NO. 99-3612(JJF); COOL PLANET INC., CASE NO. 99-3613(JJF); COOL PLANET II, INC.,
CASE NO. 99-3614(JJF); PLANET HOLLYWOOD (ASPEN), INC., CASE NO. 99-3615(JJF);
PLANET HOLLYWOOD (ATLANTIC CITY), INC., CASE NO. 99-3616(JJF); PLANET HOLLYWOOD
(CHICAGO), INC., CASE NO. 99-3617(JJF); PLANET HOLLYWOOD (HONOLULU), INC., CASE
NO. 99-3618(JJF); PLANET HOLLYWOOD (LP), INC., CASE NO. 99-3619(JJF); PLANET
HOLLYWOOD (NEW YORK CITY), INC., CASE NO. 99-3620(JJF); PLANET HOLLYWOOD (NEW
YORK), LTD., CASE NO. 99-3621(JJF); PLANET HOLLYWOOD (ORLANDO), INC., CASE NO.
99-3622(JJF); PLANET HOLLYWOOD (PHOENIX), INC., CASE NO. 99-3623(JJF); PLANET
HOLLYWOOD (REGION I), INC., CASE NO. 99-3624(JJF); PLANET HOLLYWOOD (REGION II),
INC., CASE NO. 99-3625(JJF); PLANET HOLLYWOOD (REGION III), INC., CASE NO.
99-3626(JJF); PLANET HOLLYWOOD (REGION IV), INC., CASE NO. 99-3627(JJF); PLANET
HOLLYWOOD (REGION V), INC., CASE NO. 99-3628(JJF); PLANET HOLLYWOOD (REGION VI),
INC., CASE NO. 3629(JJF); PLANET HOLLYWOOD (REGION VII), INC., CASE NO.
99-3630(JJF); PLANET HOLLYWOOD (TEXAS), LTD., CASE NO. 99-3631(JJF); PLANET
HOLLYWOOD (WAREHOUSE), INC., CASE NO. 99-3632(JJF); SOUND REPUBLIC, INC., CASE
NO. 99-3633(JJF); SOUND REPUBLIC I, INC., CASE NO. 99-3634(JJF); ALL STAR CAFE
INTERNATIONAL, INC., CASE NO. 99-3635(JJF); ALL STAR CAFE (NEW YORK), INC., CASE
NO. 99-3636(JJF); EBCO MANAGEMENT, INC., CASE NO. 993637(JJF); debtors and
debtors-in-possession in the above-captioned Chapter 11 cases, which arose prior
to OCTOBER 12,1999 (the "Petition Date"), by filing a written proof of such tax
claim with the Bankruptcy Court that substantially conforms to Official Form No.
10, by sending an original proof of the claim to Donlin, Recano & Company, Inc.
As Agent for the United States Bankruptcy Court re: Planet Hollywood Inc., ET
AL., P.O. Box 2089, Murray Hill Station, New York, New York 10156 or, if by
overnight courier or by hand to the Claims Agent at 419 Park Avenue South, Suite
1206, New York, New York 10016 and serve copies upon (a) Planet Hollywood
International Inc., 8669 Commodity Circle, Orlando, Florida 52819, Attention:
General Counsel; and (b) Debtors' co-counsel, Stroock & Stroock & Lavan LLP, 180
Maiden Lane, New York, New York 10038, Attention: Robin E. Keller, Esq. and
Young Conaway Stargatt & Taylor, LLP, Rodney Square North, Eleventh Floor,
Wilmington, Delaware 19899-0391, Attention: James L. Patton, Jr. Esq., NOT LATER
THAN 4:00 P.M. (EASTERN TIME) ON OR BEFORE APRIL 10, 2000 (THE "GOVERNMENTAL
UNIT CLAIMS BAR DATE"). SUCH PROOFS OF CLAIM WILL BE DEEMED TIMELY FILED ONLY
IF THEY ARE ACTUALLY RECEIVED BY THE CLAIMS AGENT ON OR BEFORE THE GOVERNMENTAL
UNIT CLAIMS BAR DATE.
ACTS OR OMISSIONS, IF ANY, OF THE DEBTORS THAT OCCURRED PRIOR TO THE
PETITION DATE, MAY GIVE RISE TO CLAIMS AGAINST THE DEBTORS NOTWITHSTANDING THE
FACT THAT SUCH CLAIMS (OR THE INJURIES ON WHICH THEY ARE BASED) MAY BE
CONTINGENT OR MAY NOT HAVE OCCURRED, MATURED OR BECOME FIXED OR LIQUIDATED PRIOR
TO SUCH DATE. THEREFORE, ANY CREDITOR HAVING A CLAIM OR POTENTIAL CLAIM AGAINST
THE DEBTORS, NO MATTER HOW REMOTE OR CONTINGENT, MUST FILE A PROOF OF CLAIM ON
OR BEFORE THE GOVERNMENTAL UNIT CLAIMS BAR DATE.
PLEASE TAKE FURTHER NOTICE THAT EACH GOVERNMENTAL UNIT MUST FILE A PROOF OF
CLAIM FOR TAXES ON OR BEFORE THE GOVERNMENTAL UNIT CLAIMS BAR DATE. FAILURE TO
COMPLY WITH THESE REQUIREMENTS SHALL RESULT IN THE HOLDERS OF SUCH CLAIMS BEING
FOREVER BARRED FROM RECEIVING ANY DISTRIBUTION OF CASH OR PROPERTY UNDER THE
CHAPTER 11 PLAN OF REORGANIZATION IN RESPECT OF SUCH TAX CLAIMS FROM THE
DEBTORS, THE DEBTORS' ESTATES OR FROM ANY SUCCESSOR OR ASSIGNS OF THE DEBTORS.
PLEASE TAKE FURTHER NOTICE THAT if you hold a tax claim that is not listed
on the Schedules filed by the Debtors with the Bankruptcy Court, or is listed on
the Schedules as contingent or unliquidated or disputed, you MUST file a proof
of claim.
PLEASE TAKE FURTHER NOTICE THAT proofs of claim MUST specify the name and
case number of the Debtor against which your claim is being asserted.
PLEASE TAKE FURTHER NOTICE THAT copies of the Debtors' Schedules are
available for inspection during regular business hours at the Office of the
Clerk of the Court, United States Bankruptcy Court, District of Delaware, Marine
Midland Plaza, 824 Market Street, 6th Floor, Wilmington, Delaware 19801. In the
event you have questions concerning the completion or filing of your proof of
claim, you may telephone the Claims Agent at (212) 481-1411 between the hours of
9:30 a.m. and 4:30 p.m. (Eastern Time) for assistance.
Dated: Wilmington, Delaware
January 21, 2000
STROOCK & STROOCK & LAVAN LLP YOUNG CONAWAY STARGATT &
TAYLOR LLP
Robin E. Keller James L. Patton, Jr., (No. 2202)
180 Maiden Lane Pauline K. Morgan (No. 3650)
New York, New York 10038 P.O. Box 391
Phone: 212-806-5400 Rodney Square North, 11th Floor
Fax:212-806-6006 Wilmington, DE 19999
Phone: 302-571-6600
Fax:302-571-1253
Exhibit T3E
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
) Case No. 99-3612 (JJF)
PLANET HOLLYWOOD ) (Jointly Administered)
INTERNATIONAL, INC., ET AL., )
-- --
)
DEBTORS. )
)
)
FIRST AMENDED DISCLOSURE STATEMENT PURSUANT
TO SECTION 1125 OF THE BANKRUPTCY CODE
FOR THE FIRST AMENDED JOINT PLAN
OF REORGANIZATION DATED DECEMBER 13, 1999
OF PLANET HOLLYWOOD INTERNATIONAL, INC.
AND CERTAIN OF ITS SUBSIDIARIES
Respectfully Submitted,
STROOCK & STROOCK & LAVAN LLP
Lewis Kruger
Robin E. Keller
180 Maiden Lane
New York, New York 10038
(212) 806-5400
YOUNG CONAWAY STARGATT & TAYLOR, LLP
James L. Patton, Jr. (No. 2002)
Pauline K. Morgan (No. 3650)
Rodney Square North, 11th Floor
P.O. Box 391
Wilmington, Delaware 19899-0391
(302) 571-6600
ATTORNEYS FOR THE DEBTORS AND
DEBTORS-IN-POSSESSION
<PAGE>
FIRST AMENDED DISCLOSURE STATEMENT, DATED DECEMBER 13, 1999
SOLICITATION OF VOTES
WITH RESPECT TO THE FIRST AMENDED
JOINT PLAN OF REORGANIZATION OF
PLANET HOLLYWOOD INTERNATIONAL, INC. AND
CERTAIN OF ITS SUBSIDIARIES
THE DEBTORS BELIEVE THAT THE FIRST AMENDED JOINT PLAN OF REORGANIZATION
ATTACHED HERETO AS EXHIBIT "1" IS IN THE BEST INTERESTS OF HOLDERS OF CLAIMS AND
INTERESTS. THE HOLDERS OF CLAIMS IN IMPAIRED CLASSES SOLICITED HEREBY ARE URGED
TO VOTE IN FAVOR OF THE PLAN.
THE HOLDERS OF CLAIMS SOLICITED HEREBY ARE ENCOURAGED TO READ AND CONSIDER
CAREFULLY THIS ENTIRE DISCLOSURE STATEMENT, INCLUDING THE PLAN AND THE MATTERS
DESCRIBED IN THIS DISCLOSURE STATEMENT UNDER "RISK FACTORS," PRIOR TO VOTING.
VOTING INSTRUCTIONS ARE CONTAINED ON YOUR BALLOT AND ARE SET FORTH IN
SECTION VII.G. OF THIS DISCLOSURE STATEMENT. TO BE COUNTED, YOUR BALLOT MUST BE
DULY COMPLETED, EXECUTED AND ACTUALLY RECEIVED BY THE BALLOT AGENT NO LATER THAN
5:00 P.M., EASTERN TIME, ON JANUARY 14, 2000 (THE "VOTING DEADLINE").
THE VOTES OF HOLDERS OF OLD COMMON STOCK INTERESTS AND HOLDERS OF OPTIONS
OR RIGHTS TO ACQUIRE OLD COMMON STOCK ARE NOT BEING SOLICITED SINCE THEY ARE
DEEMED TO HAVE REJECTED THE PLAN. ACCORDINGLY THIS DISCLOSURE STATEMENT HAS NOT
BEEN SENT TO THE HOLDERS OF SUCH CLAIMS OR INTERESTS. AS DESCRIBED HEREIN, THE
DEBTORS HAVE OBTAINED A COURT ORDER PERMITTING THE DEBTORS TO TRANSMIT INSTEAD
TO SUCH HOLDERS A SUMMARY OF THE PRINCIPAL TERMS OF THE PLAN.
THE CONFIRMATION HEARING HAS BEEN SCHEDULED TO COMMENCE ON JANUARY 20, 2000
AT 2:00 P.M. BEFORE THE HONORABLE JOSEPH J. FARNAN, JR. AT THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF DELAWARE (THE "COURT"), J. CALEB BOGGS
FEDERAL BUILDING, 844 KING STREET, WILMINGTON, DELAWARE 19801. THE CONFIRMATION
HEARING MAY BE ADJOURNED WITHOUT FURTHER NOTICE TO PARTIES-IN-INTEREST EXCEPT
FOR AN ANNOUNCEMENT OF THE ADJOURNED DATE MADE IN OPEN COURT.
OBJECTIONS TO CONFIRMATION OF THE PLAN MUST BE IN WRITING, STATE THE NATURE
AND AMOUNT OF CLAIMS OR INTERESTS HELD OR ASSERTED BY THE OBJECTOR AGAINST THE
DEBTORS' ESTATES OR PROPERTY, THE BASIS FOR THE OBJECTION, AND THE SPECIFIC
GROUNDS THEREFOR, AND MUST BE FILED WITH THE COURT AND SERVED UPON THE DEBTORS,
THEIR COUNSEL, COUNSEL FOR THE CREDITORS' COMMITTEE AND THE OFFICE OF THE UNITED
STATES TRUSTEE IN THE MANNER SET FORTH IN THE CONFIRMATION NOTICE SO AS TO BE
RECEIVED NO LATER THAN 4:00 P.M. EASTERN TIME ON JANUARY 14, 2000.
NO PERSON IS AUTHORIZED BY THE DEBTORS TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS IN CONNECTION WITH THE PLAN OR THE SOLICITATION OF
ACCEPTANCES FOR THE PLAN OTHER THAN AS CONTAINED IN THIS DISCLOSURE STATEMENT
AND THE EXHIBITS ATTACHED HERETO, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE DEBTORS.
THE DELIVERY OF THIS DISCLOSURE STATEMENT WILL NOT UNDER ANY CIRCUMSTANCES IMPLY
THAT ALL OF THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE HEREOF.
INFORMATION CONTAINED HEREIN REGARDING THE DEBTORS, THEIR BUSINESSES,
ASSETS AND LIABILITIES HAVE BEEN PROVIDED BY THE DEBTORS. WHERE STATED, THE
DEBTORS HAVE RELIED ON INFORMATION PROVIDED BY THEIR ADVISORS.
THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN.
EACH CAPITALIZED TERM USED IN THIS DISCLOSURE STATEMENT AND NOT OTHERWISE
DEFINED HEREIN SHALL HAVE THE MEANING ASCRIBED TO SUCH TERM IN THE PLAN.
The summaries of the Plan and the related documents contained in this
Disclosure Statement are qualified in their entirety by reference to the Plan
and such documents. If there is any inconsistency between this Disclosure
Statement and the Plan and any operative documents Filed and to be Filed, the
terms of the Plan and the operative documents Filed and to be Filed shall
control. The information contained in this Disclosure Statement is included
herein solely for the purposes of soliciting acceptances of the Plan. If the
Plan is not confirmed, the Plan and this Disclosure Statement shall be deemed
null and void, and notwithstanding anything in the Plan or in this Disclosure
Statement to the contrary, nothing contained in the Plan or in this Disclosure
Statement shall be deemed (a) to constitute a waiver or release of any Claims by
the Debtors or any other Entity, (b) to prejudice in any manner the rights of
the Debtors or any other Entity, (c) to constitute any admission by the Debtors
or any other Entity, or (d) to constitute any admission or concession regarding
any Claim or Interest.
<PAGE>
TABLE OF CONTENTS
PAGE
I. INTRODUCTION.........................................................1
II. SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS UNDER THE
PLAN AND SUMMARY OF TERMS OF NEW SENIOR SECURED
NOTES, NEW SECURED PIK NOTES, NEW WARRANTS, AND
NEW STOCK OPTION PLANS...............................................3
III. THE COMPANY.........................................................16
A. OVERVIEW OF BUSINESS.......................................16
B. OPERATIONAL RESTRUCTURING PLAN.............................18
C. CURRENT DEBT STRUCTURE AND MATERIAL AGREEMENTS.............19
1. Bank Debt.........................................19
2. Public Notes......................................19
3. Major Suppliers and Vendors.......................19
4. Leases and Contracts (franchises, joint
venture, other)..................................20
5. Stockholder Interests.............................21
D. Pre-Petition Date Special Transactions.....................22
E. Legal Proceedings..........................................23
IV. AVAILABLE FINANCIAL INFORMATION.....................................26
V. PRE-FILING PLAN DISCUSSIONS AND AGREEMENT WITH
INFORMAL NOTEHOLDERS' COMMITTEE; LANDLORD SETTLEMENTS,
INSIDER TRANSACTIONS UNDER THE PLAN.................................26
A. Noteholders' Agreement.....................................26
B. Landlord Settlements.......................................28
C. Insider Transactions Under the Plan........................28
1. Alternative Restructuring Efforts Resulting
in Current Plan Structure.........................28
2. Other Insider Benefits Under the Plan.............30
VI. POST-PETITION OPERATIONS............................................33
A. Commencement of the Reorganization Cases and
First Day Orders...........................................33
B. Store Closings.............................................35
C. Formation of the Creditors' Committee......................36
D. Foreign Operations and Proceedings.........................36
E. Asset Transfers............................................36
F. Emergence Business Plan....................................37
G. Current and Post-Confirmation Management...................48
1. Information Regarding Executive
Officers and Directors............................48
a. Post-Confirmation Officers and Directors......48
b. Current Executive Officers and Directors......49
c. Current Director Compensation and
Shareholder Interests.........................49
d. Current Executive Compensation................51
2. Employment Contracts..............................52
VII. CONFIRMATION STANDARDS; LIQUIDATION ANALYSIS AND VOTING PROCEDURES..54
A. Brief Explanation of Chapter 11............................54
B. Acceptance of the Plan.....................................54
C. Classification of Claims and Interests.....................56
D. Optional Plan Provisions/Substantive Consolidation.........56
E. Confirmation of the Plan...................................57
F. Liquidation Analysis.......................................61
G. Voting Procedures..........................................68
VIII. DESCRIPTION OF THE PLAN.............................................72
A. Classification and Treatment of Claims and
Interests Under the Plan...................................72
1. Unclassified Claims - Administrative and
Priority Tax Claims...............................72
2. Classified Claims and Interests...................74
Class 1. Priority Claims......................74
Class 2. The SunTrust Claims..................74
Class 3. Miscellaneous Secured Claims.........74
Class 4. Convenience Claims...................75
Class 5. Old Senior Subordinated Notes Claims.75
Class 6. General Unsecured Claims.............76
Class 7. Landlord Settlement Agreement Claims.76
Class 8. Old Common Stock.....................77
Class 9. Claims for Issuance of Old
Common Stock.........................77
Class 10. Intercompany Claims..................78
Class 11. Intercompany Interests...............78
B. Means for Execution of the Plan............................78
C. Distributions..............................................82
D. Acceptance or Rejection of the Plan/Confirmation
Notwithstanding Rejection by an Impaired Class.............89
E. Procedure for Resolving Disputed Claims....................89
F. Executory Contracts........................................90
G. Conditions to Confirmation and the Occurrence of
the Effective Date.........................................91
H. Effects of Confirmation and Effectiveness of Plan..........92
I. Releases and Injunctions...................................94
J. Retention Of Jurisdiction..................................96
K. Miscellaneous Provisions...................................97
IX. CERTAIN RISK FACTORS................................................99
Highly Leveraged Position.........................................99
Risks Relating to the Exit Facilities............................100
Risks Relating to the Projections................................100
Competition in the Restaurant Industry...........................101
Capital Requirements.............................................102
Dividend Restrictions............................................102
Certain Risks of Non-Confirmation................................102
Noncomparability of Historical Financial Information.............103
Seasonality......................................................103
Government Regulations...........................................103
Lack of Alternatives to Confirmation and Consummation
of the Plan......................................................104
Securities Law Considerations....................................105
Market for Plan Securities.......................................107
X. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN................107
A. Certain Federal Income Tax Consequences to Holders
of Allowed Claims........................................108
1. Tax Securities...................................108
2. Exchange of Old Senior Subordinated Notes
for Cash, New Secured PIK Notes, New Common
Stock and Possibly New Senior Secured Notes......108
3. Exchange of Allowed General Unsecured Claims
for Cash and New Secured PIK Notes...............111
4. Cancellation of Old Common Stock or
Exchange of Old Common Stock for New Warrants....112
5. Distributions in Discharge of Accrued Interest...112
6. Original Issue Discount and Premium..............113
7. Market Discount..................................116
8. Disposition of Plan Securities...................116
9. Backup Withholding...............................118
10. Adjustments......................................118
B.. Certain Federal Income Tax Consequences to the Debtors....119
1. Cancellation of Indebtedness.....................119
2. Limitation of Net Operating Loss
Carryforwards Following an Ownership Change......120
3. Alternative Minimum Tax..........................122
XI. RECOMMENDATION AND CONCLUSION......................................123
EXHIBITS
1. Joint Plan of Reorganization
2. List of Licensed or Franchised Units
3. List of Locations Closed Since January 1, 1999
4. List of Locations Subject to Landlord Settlement Agreements
5. Historical Financial Information
<PAGE>
I. INTRODUCTION
This First Amended Disclosure Statement is submitted by Planet
Hollywood International, Inc. ("PHI") (hereafter referred to as "PHI" or the
"Company") and certain subsidiaries of PHI that are debtors in the
above-captioned Chapter 11 Cases (the "Filed Subsidiaries" and collectively with
PHI, the "Debtors"). A copy of the Debtors' First Amended Joint Plan of
Reorganization, together with certain exhibits and annexes thereto
(collectively, the "Plan") is attached hereto as Exhibit 1. The Debtors, as
proponents of the Plan, seek confirmation of the Plan under chapter 11 ("Chapter
11") of title 11 of the United States Code (the "Bankruptcy Code") and submit
this Disclosure Statement in connection with their solicitation of votes on the
Plan. The exhibits to the Plan will be Filed prior to the hearing on
confirmation of the Plan and are an integral part of the Plan.
The overall purpose of the restructuring embodied in the Plan (the
"Restructuring") is to achieve changes in PHI's capital structure and raise
working capital, which PHI believes will enhance its long-term viability. PHI
believes that the Plan presents the best long-term solution to its present
difficulties by providing liquidity for the turnaround of its operations through
access to new debt and equity financing, and the means to maximize the
recoveries available for creditors.
In the past year, the Debtors have closed, sold or franchised more
than 30 domestic and foreign locations, thereby reducing overhead costs and
stemming losses from unprofitable operations. They have exited their SOUND
REPUBLIC concept and are in the process of significantly reducing their OFFICIAL
ALL STAR CAFE operations, in order to focus on their core concept and
operations: PLANET HOLLYWOOD theme venues. The Debtors expect the consummation
of the Plan, in conjunction with the continued implementation of their new
business strategy (as described below under "The Company," the "Operational
Restructuring Plan," Section III.B.), to result in (i) a reduction of more than
$180 million in principal and accrued interest on their pre-Petition Date debt;
and (ii) adequate cash flow to fund such obligations and the Company's
operations.
The Operational Restructuring Plan is the premise for a capital
restructuring that has been agreed to between PHI and Holders of over $200
million of the $250 million principal amount of PHI's 12% Senior Subordinated
Notes due 2005 ("Old Senior Subordinated Notes") and forms the basis for the
Plan.
The Plan of Reorganization contemplates a $30 million infusion of new
equity by a group of investors organized by Robert Earl, PHI's current Chairman
and Chief Executive Officer (the "New Money Investors"), in exchange for
approximately 70% of the equity of Reorganized PHI in the form of New Class B
Common Stock; a debt facility in the form of New Senior Secured Notes totaling
up to $25 million, secured by substantially all of the Reorganized Debtors'
assets (which is expected to be a temporary "bridge" facility pending the sale
of the 1567 Broadway interests described below); and up to a $15 million
post-Effective Date secured Working Capital Facility. The New Money Investors
will primarily consist of Mr. Earl, or a Trust created in favor of his family or
his children; His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Al
Saud; Mr. Ong Beng Seng; HPL (a Singapore company); and one or more additional
investors. The New Money Investors have made a $5 million cash good faith
deposit into escrow, which will be applied toward their funding obligations if
the Effective Date of the Plan occurs no later than February 29, 2000.
The Plan provides for the payment of $47.5 million of Cash, the
issuance of $60 million of New Secured PIK Notes and equity in the form of New
Class A Common Stock totaling approximately 26.5% of Reorganized PHI to the
Holders of Old Senior Subordinated Notes. If, prior to the Confirmation Date,
PHI has entered into an agreement with Bay Harbour Management L.C. ("Bay
Harbour"), whereby Bay Harbour agrees to acquire the balance, if any, of New
Senior Secured Notes and the related Cash and New Class A Common Stock fee as
described in Section 5.5 of the Plan, that are not subscribed to by Electing
Holders of Class 5 Claims, then PHI shall deliver to Electing Holders of Class 5
Claims and to Bay Harbour in lieu of payment of up to $25 million Cash, their
respective Pro Rata shares of (a) up to $25 million of New Senior Secured Notes
having the principal economic terms set forth in Annex A to the Plan; and (b) a
fee of $625,000 Cash and 350,000 shares of New Class A Common Stock. The terms
of the New Senior Secured Notes as currently set forth in Annex A may be
modified by Bay Harbour, but not in a manner materially adverse to PHI or other
classes of Creditors or Interests under the Plan.
THE TERMS OF THE PLAN HAVE BEEN AGREED UPON BY THE DEBTORS, AND
HOLDERS OF APPROXIMATELY $200 MILLION OF PHI'S OLD SENIOR SUBORDINATED NOTES
REPRESENTING IN EXCESS OF TWO THIRDS IN DOLLAR AMOUNT OF THE OLD SENIOR
SUBORDINATED NOTES. THE PLAN IS SUPPORTED BY THE OFFICIAL COMMITTEE OF UNSECURED
CREDITORS, COMPOSED OF FOUR REPRESENTATIVES OF THE OLD SENIOR SUBORDINATED NOTES
AND TWO REPRESENTATIVES OF GENERAL UNSECURED CREDITORS.
Other General Unsecured Creditors, which are classified in Class 6
under the Plan, consisting principally of Holders of Trade Claims, Rejection
Claims, Litigation Claims, and non-priority Claims of past and present
employees, and excluding those unsecured Creditors which fall within the limits
of the administrative convenience class established in Class 4 under the Plan,
will receive a combination of Cash and New Secured PIK Notes. The distribution
to Holders of Class 6 Claims will have an aggregate value approximately equal to
that received by Holders of Class 5 Claims, with the Cash portion of the
distribution being the same for each such Class.
Existing common stock interests, and options to acquire such interests
and all other equity securities will be cancelled. If the Plan is accepted by
all impaired creditor classes, Holders of Old Common Stock will receive in the
aggregate 200,000 New Warrants, each for the purchase of one share of New Class
A Common Stock.
In addition, PHI has entered into separate Landlord Settlement
Agreements with approximately twenty-six of the landlords holding interests in
leases relating to Company-owned restaurant and merchandise store locations,
pursuant to which PHI and the applicable landlord had agreed either (i) to
restructure the lease terms under which PHI was conducting its operations, (ii)
to franchise or license the existing restaurant or store to the landlord or a
third party, or (iii) on the amount of the landlord's Rejection Claim resulting
from PHI's cessation of operations and rejection of the lease. The Plan ratifies
the Landlord Settlement Agreements, to the extent not previously approved by
Order of the Bankruptcy Court.
Under the Plan, Reorganized PHI will implement the New Stock Option
Plan for the benefit of Post-Effective Date management and Celebrities who
sponsor PHI post-Effective Date. Under the New Stock Option Plan, Celebrities
and management will receive approximately 1.0 million options, each for the
purchase of one share of New Class A Common Stock.
The Debtors, the Creditors' Committee and other interested parties are
still in the midst of negotiations over the details of the Plan Securities and
other matters which may effect changes to the corporate structure of Reorganized
PHI, but will not materially adversely affect the key economic terms of the Plan
with respect to any Class.
II. SUMMARY OF TREATMENT OF CLAIMS AND INTERESTS
UNDER THE PLAN AND SUMMARY OF TERMS OF
NEW SENIOR SECURED NOTES, NEW SECURED
PIK NOTES, NEW WARRANTS, AND
NEW STOCK OPTION PLANS
The following is a summary of certain provisions of the Plan
describing the treatment of Claims and Interests, and of key elements of the new
Plan Securities to be issued on or after the Effective Date. This overview is
qualified in its entirety by reference to the provisions of the Plan itself. If
there is an inconsistency between the Plan and its exhibits and annexes whether
Filed or to be Filed, on the one hand, and this Disclosure Statement, on the
other hand, the terms of the Plan and the exhibits and annexes thereto shall
control. For a more extensive discussion of the Plan, see the discussion under
the caption "Description of the Plan" in Section VIII of this Disclosure
Statement. The Plan contemplates the substantive consolidation of the Debtors
for purposes of the Plan only. Following the Effective Date, all Filed
Subsidiaries with ongoing operations shall retain their corporate identity as it
existed prior to the Petition Date.
Pursuant to the Plan, Holders of Claims and Interests will receive, in
full satisfaction of such Claims and Interests, the consideration set forth
below.
<PAGE>
CLAIMS AND INTERESTS: TREATMENT:
UNCLASSIFIED CLAIMS:
ADMINISTRATIVE CLAIMS Holders of Administrative Claims
incurred in the ordinary course of
business shall be assumed and paid by
the Reorganized Debtors, as applicable,
pursuant to the terms and conditions of
the transaction giving rise to the
Claim.
Holders of Administrative Reclamation
Claims shall be paid in full in Cash
their Allowed Administrative Reclamation
Claim on the later of the Effective
Date, the date of allowance of their
Reclamation Claims, or as otherwise
provided by Order of the Court. The
Administrative Reclamation Claims are
estimated to be approximately $600,000.
Holders of Administrative cure cost
Claims with respect to executory
contracts and leases, shall be paid in
full in Cash on the later of (i) the
Effective Date, (ii) the date of
allowance of their cure cost Claims, or
(iii) as otherwise provided by Order of
the Court. Administrative cure costs are
estimated to be approximately $1.45
million.
Administrative Claims by Professionals
for fees and expenses or by any other
Entity for substantial contribution that
are authorized to be paid by Court Order
shall be paid in Cash in the amounts
Allowed by Final Order of the Court
within ten (10) days after the date of
such Order. Professional Claims are
estimated to be approximately $3.5
million.
PRIORITY TAX CLAIMS Allowed Priority Tax Claims shall
receive at the applicable Debtor's or
Reorganized PHI's option, (i) payment in
full in Cash on the Effective Date, or
(ii) deferred payments of Cash in the
full amount of the Allowed Claim payable
in equal annual principal installments
beginning on the first anniversary of
the Effective Date and ending on the
earlier of the sixth anniversary of the
Effective Date or the sixth anniversary
of the date of assessment of such Claim,
together with interest (payable
quarterly in arrears) on the unpaid
balance of such Allowed Claim at the
Treasury Rate or such other rate as may
be set by the Court at the Confirmation
Hearing. Priority Tax Claims are
estimated to be approximately $500,000.
CLASSIFIED CLAIMS AND INTERESTS
CLASS 1: PRIORITY CLAIMS: Allowed Each Holder of an Allowed Priority Claim
Claims entitled to priority under will receive the Allowed amount of such
the Bankruptcy Code, other than an Claim in Cash on the later of (i) the
Administrative Claim, or a Priority Effective Date, (ii) the date such Claim
Tax Claim. The estimated amount becomes an Allowed Claim and (iii) the
of Priority Claims is $0. date for payment provided by any
CLASS 1 IS UNIMPAIRED. agreements or understandings between the
parties.
CLASS 2: SUNTRUST CLAIMS: Commitments Each Holder of Allowed SunTrust Claims
under the SunTrust Agreements in will receive in Cash all amounts due, if
the aggregate amount of $2.5 million. any, under the SunTrust Agreements plus
CLASS 2 IS UNIMPAIRED. accrued, unpaid interest thereon at the
non-default contractual rate set forth
in the SunTrust Agreements through the
Effective Date, plus Allowed fees, costs
and expenses. On or prior to the
Effective Date, the Letter of Credit
Facility will be terminated.
CLASS 3: MISCELLANEOUS SECURED CLAIMS: Each Holder of an Allowed Miscellaneous
Allowed Claims that are Secured Claims. Secured Claim will at the applicable
The estimated amount of these Debtor's option, either be treated
Claims is approximately $2.0 million in accordance with Section 1124(2) of
and they consist primarily of security the Bankruptcy Code,1 or in accordance
interests and liens of merchandise with the terms of any agreements between
vendors. CLASS 3 IS UNIMPAIRED. the Secured Creditor and the Debtors as
approved by the Court.
CLASS 4: CONVENIENCE CLAIMS: Each Holder of an Allowed Convenience
Convenience Claims consist of Allowed Claim will receive Cash on the later of
Unsecured Claims of $2,000 or less, or (i) the Effective Date, (ii) the date
that are reduced to $2,000 or less. such Claim becomes an Allowed Claim or
There are estimated to be approximately (iii) as otherwise provided by Order of
1,900 Holders of Claims that are the Court, equal to the lesser of $2,000
or will be reduced to $2,000 or less. or the Allowed amount of the Claim.
The payment to Class 4 is expected to
total approximately $1.5 million.
CLASS 4 IS UNIMPAIRED.
CLASS 5: OLD SENIOR SUBORDINATED On the Effective Date, each Holder of an
NOTES CLAIMS: Claims under the Old Old Senior Subordinated Notes Claim
Senior Subordinated Notes ($250 shall have an Allowed Claim equal to the
million aggregate principal amount face amount of its Old Senior
plus unpaid accrued interest and Subordinated Notes plus accrued interest
interest on defaulted payments of through the Petition Date, and shall
interest at the default rate provided receive on the Effective Date, in full
in the applicable documents of satisfaction of its Allowed Class 5
approximately $32 million, calculated Claim, its Pro Rata share of (i) $47.5
through October 11, 1999).The million in Cash, (ii) $60 million of New
distribution to Class 5 is estimated Secured PIK Notes, and (iii) 2.65
to be approximately 40% of the million shares of New Class A Common
Old Senior Subordinated Notes Claims. Stock. If, prior to the Confirmation
SEE Section VII.F. "Hypothetical Date, PHI has entered into the Bay
Liquidation Analysis; Estimated Harbour Agreement, then PHI shall
Recovery For Unsecured Claims deliver to Electing Holders of Class 5
Under the Plan." Claims in lieu of payment of up to $25
CLASS 5 IS IMPAIRED. million Cash and, if applicable, any
unsubscribed amount to Bay Harbour under
the Bay Harbour Agreement, their
respective Pro Rata shares of up to $25
million of New Senior Secured Notes
having the principal economic terms set
forth in Annex A to the Plan, or other
terms not materially more adverse to any
Class under the Plan, plus their Pro
Rata Share of a fee consisting of
$625,000 Cash and 350,000 shares of New
Class A Common Stock. In the event that
the amount of any New Class A Common
Stock paid to a third-party lender as
partial consideration for the purchase
of the New Senior Secured Notes is less
than 350,000 shares of New Class A
Common Stock, then the Holders of Class
5 Claims shall receive, on the Effective
Date, their Pro Rata share of that
undistributed New Class A Common Stock
up to a total of 350,000 shares (the
"Supplemental Class 5 Distribution"),
and the amount of New Secured PIK Notes
distributed to Class 5 shall be reduced
by the Class 6 Adjustment Amount.
Failure of a Class 5 Claim holder to
check the appropriate box on the Ballot
will preclude them from receiving a
distribution of New Senior Secured Notes
under the Plan.
- --------------------
1 Section 1124(2) of the Bankruptcy Code provides that a claim is
unimpaired if the plan:
(A) cures any such default that occurred before or after the
commencement of the case under this title, other than a default of a
kind specified in section 365(b)(2) of this title;
(B) reinstates the maturity of such claim or interest as such maturity
existed before such default;
(C) compensates the holder of such claim or interest for any damages
incurred as a result of any reasonable reliance by such holder on such
contractual provision or such applicable law; and
(D) does not otherwise alter the legal, equitable, or contractual
rights to which such claim or interest entitles the holder of such
claim or interest.
<PAGE>
CLASS 6: GENERAL UNSECURED CLAIMS: Each Holder of an Allowed Class 6 Claim
Allowed General Unsecured Claims will receive, in full satisfaction of
including, without limitation, its Allowed Claim, Cash and New Secured
Trade Claims, Rejection Claims, PIK Notes having an aggregate value as a
Litigation Claims, and non-priority percentage of its Allowed Claim equal to
Claims of present and former the aggregate value of the consideration
employees of the Debtors. Claims in to be received by each Holder of an
this Class aggregate approximately Allowed Class 5 Claim as a percentage of
$22.5 million as of the Petition its Allowed Claim. The Cash component of
Date. The distribution to Class 6 the distribution to Class 6 shall be the
is estimated to be approximately same percentage of a Class 6 Holder's
40% of the Allowed Claim of each Allowed Claim as the Cash component of
Holder of a General Unsecured the distribution to Class 5 is as a
Claim. SEE Section VII.F. percentage of the Allowed Claims of
"Hypothetical Liquidation Analysis; Holders in Class 5, counting a
Estimated Recovery For Unsecured distribution of New Senior Secured Notes
Claims Under the Plan." CLASS 6 IS to Class 5 as a Cash payment. Based on
IMPAIRED. the projected level of Class 6 Claims,
the Debtors will distribute
approximately $3.8 million in Cash and
$5.7 million of New Secured PIK Notes to
Class 6 Holders. In the event Class 5
receives the Supplemental Class 5
Distribution, then the Holders of Class
6 Claims shall receive, on the Effective
Date, their Pro Rata share of the Class
6 Adjustment Amount determined as
provided in Section 5.6 of the Plan.
CLASS 7: LANDLORD SETTLEMENT Each Holder of an Allowed Class 7 Claim
AGREEMENT CLAIMS: Allowed Claims will receive the Cash payment, Debtor
arising out of pre- and performance or other treatment provided
post-petition date settlement by its applicable Landlord Settlement
agreements between any of the Agreement.
Debtors and landlords. The
Post-Petition Date Cash payment is
approximately $896,000. CLASS 7 IS
UNIMPAIRED.
CLASS 8: OLD COMMON STOCK: Shares If Classes 5 and 6 accept the Plan, each
of Class A and Class B Common Holder of an Allowed Class 8 Interest
Stock, par value $.01 per share, of will receive its Pro Rata share of New
PHI (the "Old Common Stock") (an Warrants, provided that not less than
aggregate of 109,089,940 shares ten (10) New Warrants will be
issued and outstanding). CLASS 8 IS distributed to any Holder. Thus, Holders
IMPAIRED. of less than 5,450 shares of Old Common
Stock will receive no consideration. If
Classes 5 or 6 reject the Plan, all
Class 8 Interests will be cancelled as
of the Effective Date, and no New
Warrants will be issued.
CLASS 9: CLAIMS FOR ISSUANCE OF OLD Holders of Class 9 Interests or rights
COMMON STOCK: Old Warrants, Old shall receive no consideration or
Celebrity Options, Old Employee property under the Plan, and their
Options and all other options or Interests and rights will be cancelled
rights, if any, granted by PHI for as of the Effective Date.
the purchase of Old Common Stock.
CLASS 9 IS IMPAIRED.
CLASS 10: INTERCOMPANY CLAIMS: Each Holder of an Intercompany Claim
Claims of non-Debtor Subsidiaries shall be treated in accordance with
of PHI against any of the Debtors. Section 1124(2) of the Bankruptcy Code.
CLASS 10 IS UNIMPAIRED.
CLASS 11: INTERCOMPANY INTERESTS: Holders of Interests in Class 11 will
Stock ownership Interests of PHI retain such rights to which their
and any Filed Subsidiary in any Interests entitle them, in accordance
other Subsidiary or Unconsolidated with Section 1124(2) of the Bankruptcy
Affiliate that is not a Filed Code.
Subsidiary. CLASS 11 IS UNIMPAIRED.
SUMMARY TERMS OF NEW SENIOR SECURED NOTES
Issuer: Reorganized Planet Hollywood International, Inc.
("PHI")
Guarantors: All Operating Subsidiaries of PHI (together with PHI,
the "Company")
Principal Amount: Up to $25 million
Maturity: First or Second Anniversary of the Effective Date
[subject to the approval of the Senior Secured Notes
purchaser]
Interest: Payable quarterly or semi-annually in arrears in cash
at a rate of 8% per annum, plus an applicable default
interest rate as may be negotiated.
Security: The New Senior Secured Notes shall be secured by first
liens on substantially all of the Reorganized Company's
assets, except that their liens on certain collateral
including inventory, receivables, Memorabilia and other
collateral reasonably determined by PHI to be necessary
in accordance with prudent business practices to secure
the Working Capital Facility, shall be junior to the
liens of the Working Capital Facility. The Company will
negotiate in good faith with the Committee regarding
terms for the release by the Working Capital Facility
lender of Memorabilia and other collateral securing the
Working Capital Facility based on liquidity levels of
the Company to be determined, provided that after
giving effect to such releases, the Company maintains
adequate liquidity and working capital.
Asset Sales: Any net proceeds from the sale of any collateral must
be used to repay the New Senior Secured Notes, subject
to the terms of the Working Capital Facility.
Covenants: Normal and customary for secured indebtedness of this
nature, to be determined to the reasonable satisfaction
of the Creditors' Committee.
Commitment Fee: To Be Determined
Equity: To Be Determined
SUMMARY TERMS OF NEW SECURED PIK NOTES
Issuer: Reorganized Planet Hollywood International, Inc.
("PHI")
Guarantors: All Operating Subsidiaries of PHI (together with PHI,
the "Company")
Principal Amount: $65.7 million (estimated)
Maturity: Fifth Anniversary of the Effective Date
Interest: Payable semi-annually in cash, at 10% per annum, or at
the sole election of the issuer, payable in kind in
additional New Secured PIK Notes at 12.75% per annum;
PROVIDED, HOWEVER, that commencing two and one-half
years after the Effective Date, interest on the New
Secured PIK Notes shall be payable only in cash at 10%
per annum; AND FURTHER PROVIDED, HOWEVER, that after
one year from the date of issuance, interest on the New
Secured PIK Notes shall be paid in cash at 10% per
annum if the ratio of the Reorganized Company's
consolidated EBITDA to Interest Expense is greater than
1.75 for the last twelve month period.
Security: The New Secured PIK Notes shall be secured by liens on
substantially all of the Reorganized Company's assets
junior solely to the New Senior Secured Notes and the
Working Capital Facility.
Optional
Redemption: New Secured PIK Notes may be redeemed, in whole or in
part, at any time, at the option of the Issuer, at par
plus accrued and unpaid interest to the date of
redemption.
Mandatory Redemption: At an annual measuring point to be agreed upon by PHI
and the Creditors' Committee: (a) if the ratio of the
Company's consolidated EBITDA to Interest Expense is
greater than 2.0 for the last twelve month period; and
(b) the sum of the Company's cash plus availability
under its post-Effective Date Working Capital Facility
exceeds $25 million, then 50% of such excess shall be
used to redeem the New Secured PIK Notes.
Covenants: Normal and customary for secured indebtedness of this
nature, to be determined to the reasonable satisfaction
of the Creditors' Committee.
SUMMARY TERMS OF NEW WARRANTS
Issuer: Reorganized Planet Hollywood International, Inc.
("PHI")
Strike Price: $65.50 per share
Term: Expire three years after the Effective Date
SUMMARY TERMS OF NEW STOCK OPTION PLANS
a. 1999 STOCK AWARD AND INCENTIVE PLAN
Issuer: Reorganized Planet Hollywood International, Inc.
("PHI").
Purposes: The purpose of the Management Plan is to (i) attract
and retain persons eligible to participate in the
Management Plan; (ii) motivate Participants (as defined
below), by means of appropriate incentives, to achieve
long-range goals; (iii) provide incentive compensation
opportunities that PHI believes are competitive within
the market through compensation that is based on PHI's
common stock; and thereby promote the long-term
financial interests of PHI.
Administration: The Management Plan will be administered by a committee
(the "Committee") appointed by the Board of Directors
of PHI. The Committee will have the authority to
administer the Management Plan and to exercise all the
powers and authorities either specifically granted to
it under the Management Plan or necessary or advisable
in the administration of the Management Plan. The
Committee will consist of two or more persons selected
by the Board of Directors of PHI.
Eligibility: Awards may be granted to (i) officers, directors and
other employees of PHI, (ii) directors who are not
employees of PHI and (iii) persons and service
companies providing services in their capacities as
independent contractors for PHI, in the sole discretion
of the Committee.
Stock Subject to
the Management
Plan; Limitation The maximum number of shares of New Class A
Common Stock, par value $.01 per share of PHI (the
"Stock") to be reserved for issuance pursuant to the
Management Plan shall be in an amount to be determined
which together with amounts reserved under the
Celebrity Stock Option Plan shall not exceed 1 million
shares (subject to customary adjustments in the event
of certain corporate transactions or events).
Stock Options: The Committee will have the authority to grant
Non-Qualified Stock Options (as defined in the
Management Plan) to eligible participants (the
"Participants") and Incentive Stock Options (as defined
in the Management Plan) to eligible grantees (the
"Grantees"). Each grant of Options will be memorialized
by an Award Agreement. Each Award Agreement will set
forth the number of Stock Options granted, whether the
Option is a Non-Qualified Option or an Incentive Stock
Option, the exercise price of the Stock Options and the
term and exercisability of the Stock Options. The
exercise price will be paid in full, at the time of
exercise, in cash or in shares of New Class A Common
Stock having a Fair Market Value (as defined in the
Management Plan) equal to such exercise price or in a
combination of cash and New Class A Common Stock or, in
the sole discretion of the Committee, through a
cashless exercise procedure.
Subject to such exceptions as may be determined by the
Committee, if a Participant's or Grantee's employment
by, or relationship with, the Company terminates,
Options granted to such Participant or Grantee prior to
such termination shall remain exercisable following the
effective date of such termination in the manner and to
the extent to be provided in the Stock Option Plan
documents.
Options may be subject to other conditions including,
but not limited to, restrictions on transferability of
the shares acquired upon exercise of such Options, as
the Committee may prescribe in its discretion.
Maximum Exercise
Period: The exercise period for any options issued under the
Management Plan shall not exceed ten years.
Incentive Stock
Options: The Committee will have the authority to issue
Incentive Stock Options subject to the following
special terms and conditions (in addition to the
general terms governing Option Awards): (i) the
aggregate Fair Market Value (as defined in the
Management Plan) (determined as of the date the
Incentive Stock Option is granted) of the shares of
Stock with respect to which Incentive Stock Options
granted under the Management Plan and all other plans
of the Group (defined as PHI and its subsidiaries)
become exercisable for the first time by each Grantee
during any calendar year shall not exceed $100,000;
(ii) in the case of an Incentive Stock Option granted
to a Ten Percent Stockholder (as defined in the
Management Plan), (x) the Option Price shall not be
less than one hundred ten percent (110%) of the Fair
Market Value of the shares of Stock on the date of
grant of such Incentive Stock Option, and (y) the
exercise period shall not exceed five (5) years from
the date of grant of such Incentive Stock Option; (iii)
Incentive Stock Options shall be awarded solely to
those eligible persons that are Grantees under the
Management Plan; (iv) Incentive Stock Options will be
granted under the Management Plan only within the ten
(10) year period commencing on the Effective Date of
the Management Plan.
Stock Appreciation
Rights: The Committee is authorized to grant freestanding Stock
Appreciation Rights ("SARs") and SARs granted in tandem
with an Option to Participants. An SAR will confer on
the Participant a right to receive with respect to each
share subject thereto, upon exercise thereof, the
excess of (i) the Fair Market Value (as defined in the
Management Plan) of one share of Common Stock on the
date of exercise over (ii) the grant price of the SAR
(which in the case of an SAR granted in tandem with an
Option shall be equal to the exercise price of the
underlying Option, and which in the case of any other
SAR shall be such price as the Committee may
determine).
Restricted Stock: The Committee will be authorized to grant restricted
Stock to Participants. Restricted Stock will be subject
to restrictions on transferability and other
restrictions, if any, as the Committee may impose at
the date of grant or thereafter.
Restricted Stock
Units: The Committee will be authorized to grant to
Participants the right to receive Stock or cash at the
end of a specified deferral period, which right may be
conditioned on the satisfaction of criteria determined
by the Committee ("Restricted Stock Units").
Dividend
Equivalents: The Committee is authorized to grant rights to receive
cash, Stock, or other property equal in value to
dividends paid with respect to a specified number of
shares of Stock ("Dividend Equivalents") to
Participants.
Other Stock or
Cash-Based
Awards: The Committee is authorized to grant to Participants
other Stock-based awards or other cash based awards as
an element of or supplement to any other Award under
the Celebrity Plan.
b. 1999 CELEBRITY STOCK AWARD AND INCENTIVE PLAN
Issuer: Reorganized Planet Hollywood International, Inc.
("PHI").
Purposes: The purpose of the Celebrity Plan is to afford an
incentive to selected celebrities and others (including
certain producers, agents and business advisors) in
their capacities as independent contractors of PHI or
any of subsidiaries to (i) acquire a proprietary
interest in PHI, (ii) continue as independent
contractors, (iii) increase their efforts on behalf of
PHI and (iv) promote the success of PHI's business.
Administration: The Celebrity Plan will be administered by a committee
(the "Committee") appointed by the Board of Directors
of PHI. The Committee will have the authority to
administer the Celebrity Plan and to exercise all the
powers and authorities either specifically granted to
it under the Celebrity Plan or necessary or advisable
in the administration of the Celebrity Plan. The
Committee will consist of two or more persons selected
by the Board of Directors of PHI.
Eligibility: Awards may be granted to independent contractors of PHI
in the sole discretion of the Committee.
Stock Subject to
the Celebrity Plan;
Limitation on
Grants: The maximum number of shares of New Class A Common
Stock, value $.01 per share of PHI (the "Stock") to be
reserved for issuance pursuant to the Celebrity Plan
shall be in an amount to be determined which, together
with amounts reserved under the Management Stock Option
Plan, shall not exceed 1 million shares (subject to
customary adjustments in the event of certain corporate
transactions or events).
Stock Options: The Committee will have the authority to grant Stock
Options to eligible participants. Only non-qualified
stock options will be granted under the Celebrity Plan.
Each grant of Stock Options will be memorialized by an
Award Agreement which will set forth the number of
Stock Options granted, the exercise price of the Stock
Options and the term and exercisability of the Stock
Options. The exercise price will be paid in full, at
the time of exercise, in cash or in shares of New Class
A Common Stock having a Fair Market Value (as defined
in the Celebrity Plan) equal to such exercise price or
in a combination of cash and New Class A Common Stock
or, in the sole discretion of the Committee, through a
cashless exercise procedure.
Subject to such exceptions as may be determined by the
Committee, if a participant's independent contractor
relationship with PHI terminates, Options granted to
such participant prior to such termination shall remain
exercisable following the effective date of such
termination in the manner and to the extent to be
provided in the Stock Option Plan documents.
Options may be subject to other conditions including,
but not limited to, restrictions on transferability of
the shares acquired upon exercise of such Options, as
the Committee may prescribe in its discretion. Options
may be subject to such other conditions including, but
not limited to, restrictions on transferability of the
shares acquired upon exercise of such Options, as the
Committee may prescribe in its discretion.
Stock Appreciation
Rights: The Committee is authorized to grant freestanding Stock
Appreciation Rights ("SARs")and SARs granted in tandem
with a Stock Option to eligible participants. An SAR
will confer on the participant a right to receive with
respect to each share subject thereto, upon exercise
thereof, the excess of (i) the Fair Market Value (as
defined in the Celebrity Plan) of one share of Stock on
the date of exercise over (ii) the grant price of the
SAR (which in the case of an SAR granted in tandem with
an Option shall be equal to the exercise price of the
underlying Option, and which in the case of any other
SAR shall be such price as the Committee may
determine).
Restricted Stock: The Committee will be authorized to grant restricted
Stock to eligible participants. Restricted Stock will
be subject to restrictions on transfer.
Restricted Stock
Units: The Committee will be authorized to grant to eligible
participants the right to receive Stock or cash at the
end of a specified deferral period, which right may be
conditioned on the satisfaction of criteria determined
by the Committee ("Restricted Stock Units").
Dividend
Equivalents: The Committee is authorized to grant rights to receive
cash, Stock, or other property equal in value to
dividends paid with respect to a specified number of
shares of Stock ("Dividend Equivalents") to eligible
participants.
Other Stock or
Cash-Based Awards: The Committee is authorized to grant to participants
other Stock-based awards or other cash based awards as
an element of or supplement to any other Award under
the Celebrity Plan.
III. THE COMPANY
A. OVERVIEW OF BUSINESS
PHI is a creator and world-wide developer of consumer brands that
transcend international barriers and capitalize on the universal appeal of
movies, sports and other entertainment-based themes. Since PHI commenced
operations in October, 1991, the PLANET HOLLYWOOD name and distinctive logo
design have become among the most widely-recognized trademarks in the world. To
date, the Company has promoted its brands primarily through the operation of
theme restaurants, most notably PLANET HOLLYWOOD and the OFFICIAL ALL STAR CAFE,
that provide a unique dining and entertainment experience, and through their
integrated retail stores, which offer a broad selection of merchandise
displaying the Company's logos.
Historically, an important part of the Company's strategy has been to
promote its brands through the active involvement of Celebrities and Celebrity
stockholders. Certain Celebrities have granted the Company the right to use
their name, approved likeness, approved biography and selected career
memorabilia ("Memorabilia") in connection with the promotion, advertising and
operation of the Company's units. The restaurant experience offers popular
cuisine, attentive service and an atmosphere of excitement created by combining
unique layouts and decor with custom-designed videos, audio soundtracks,
prominently displayed Celebrity memorabilia, and merchandise.
The Company has entered into various license and franchise agreements,
permitting the domestic or overseas operation of restaurant and/or merchandise
locations, and the use of the Company's brands and trademarks in specified
markets. Some franchisees have the exclusive right to open units in specified
countries. In return for the license or franchise, the Company generally
receives an initial non-refundable fee and continuing royalties based on a
percentage of the total revenues of the units. A list of current licensed or
franchised units is annexed hereto as Exhibit 2.
The Company has also entered into several strategic ventures in movie
theaters, lodging, and consumer products (the "Joint Ventures"), including
PLANET MOVIES by AMC, a joint venture with AMC Entertainment, Inc. to develop,
own and operate a multi-screen, movie theater megaplex in Columbus, Ohio; the
PLANET HOLLYWOOD HOTEL, a joint venture to construct and own a hotel in New York
City's Times Square; the development of additional COOL PLANET ice cream and
dessert venues; and the recently disposed of SOUND REPUBLIC concept, a
live-music based theme.
As of the end of 1998, PHI, through its various operating
Subsidiaries, together with its franchisees and licensees, operated 95 units,
including 14 retail units only, located in 31 countries around the world, of
which 60 were Company owned. All Company-owned units were located on leased
sites, with long-term lease arrangements, substantially all of which were
guaranteed by PHI. Approximately 72% of PHI's revenues at the end of 1998 were
derived from domestic operations, approximately 24% from European operations,
and approximately 4% from operations in other areas, including Canada.
In 1998 and continuing in 1999, PHI and its Subsidiaries
(collectively, the "PHI Group") experienced declines in revenues at their
restaurants, and decreases in promotional and specialty retail sales. As
compared with the twenty-six week period ended June 27, 1998, total revenues for
the PHI Group for the twenty-six week period ended June 27, 1999 decreased
approximately $49.9 million or 25%, while total operating costs, including costs
of sales and related general and administrative expenses, decreased
approximately $1.7 million or 1%. During the twenty-six week period ended June
27, 1999, the PHI Group incurred a loss from operations of approximately $44.9
million as compared with income of approximately $5.9 million for the 1998
fiscal year. For the twenty-six week period ended June 27, 1999, the operations
of the PHI Group consumed approximately $27.7 million in cash. This compares
with the twenty-six week period ended June 28, 1998, during which the PHI Group
consumed approximately $20.9 million in cash.
As of December 1998, PHI Group employed approximately 8,250 people. In
fiscal 1998, the Company had revenues of approximately $387 million, down from
revenues of approximately $475 million for fiscal 1997. The PHI Group
experienced a loss on operations in 1998 of approximately $201 million,
including $139 million of recorded charges relating to the impairment of long
lived assets, restructuring, severance, and accelerated compensation costs.
These losses and charges were primarily due to:
o declines in same unit revenues;
o overall disappointing operating results;
o expenses due to the development of the SOUND REPUBLIC
concept; and
o losses from major spin-off projects such as the OFFICIAL ALL
STAR CAFE and COOL PLANET locations.
PHI attributes the decrease in revenues primarily to a decline in
customer traffic resulting from increased competition in the theme dining
industry and tourism in several major markets. There has likewise been a decline
of significant promotional and specialty retail sales. The restaurant and retail
merchandising industry has been and continues to be affected by (a) intense
competition; (b) changes in consumer tastes; (c) international, national,
regional and local economic conditions; and (d) patterns in tourist travel,
among other factors.
As reported in PHI's 1998 10K, the PHI Group re-evaluated its
long-term growth strategy in 1998 and approved plans to refocus its business
around its core PLANET HOLLYWOOD operations. It also determined to reduce
operating costs, and to significantly downsize its corporate organization.
Towards this end, prior to the commencement of these Chapter 11 Cases, PHI began
to take a series of consumer-oriented initiatives aimed at rebuilding consumer
excitement about its PLANET HOLLYWOOD restaurants and branded merchandise. Prior
to the Petition Date, PHI introduced a new menu in all locations, began to
refurbish the appearance of its restaurants and launched a new seasonal line of
merchandise. Further, in the fourth quarter of 1998, PHI identified 93
employment positions which would be eliminated. Sixty of these positions were
eliminated in fiscal 1998, and the balance were eliminated in the first quarter
of 1999. Certain historical financial information concerning the Debtors is
annexed to this Disclosure Statement as Exhibit "5". Exhibit 5 contains
condensed consolidated statements of operations, cash flows and balance sheets.
B. OPERATIONAL RESTRUCTURING PLAN
In order to address its operating losses and restore profitability,
the Company developed an operational restructuring program, portions of which it
began implementing in the beginning of 1999, which forms the economic basis for
the Plan. The key elements of that restructuring program are:
o Sell or otherwise dispose of the SOUND REPUBLIC locations
and joint venture, franchise, sell or otherwise dispose of
several of the OFFICIAL ALL STAR CAFE locations and the COOL
PLANET Irvine location;
o Identify franchise and license opportunities for selected
international Company-owned PLANET HOLLYWOOD locations;
o Raise capital through the sale of assets and location of
third party investment;
o Reduce overhead and losses through strategic store closings
domestically and overseas;
o Refocus on core PLANET HOLLYWOOD operations by introducing a
new menu, updating the look and appearance of the
restaurants, launching a new merchandise strategy aimed at
providing more fashion-oriented merchandise, and initiating
new marketing and public relations strategies aimed at
delivering a fresh, exciting and consistent message to
consumers.
PHI has developed a business plan which assumes a return to
approximately 1998 levels of per store revenues at its remaining core operating
units by 2004. SEE Projected Financial Information in Section VI. F. of this
Disclosure Statement. As a result of the recapitalization under the Plan and
following the anticipated sale of excess assets including the sale of the 1567
Broadway interests described below, PHI projects having ample liquidity
post-bankruptcy to fund capital improvements, marketing and advertising needs,
in addition to the debt service requirements under the Plan. License, franchise
and royalty revenues will supplement store revenues. Proceeds from the sale of
excess merchandise and Memorabilia, though not projected in the business plan,
may augment revenues as well.
Potential areas for expansion include additional PLANET MOVIES
ventures, hotel and casino licensing, expansion of the COOL PLANET concept, new
franchise opportunities, and e-commerce development concepts. Announcement of a
successful emergence from Chapter 11, combined with ongoing and new Celebrity
support and merchandise design innovations are expected to receive media
attention and re-invigorate interest and excitement about PLANET HOLLYWOOD
entertainment and dining.
C. CURRENT DEBT STRUCTURE AND MATERIAL AGREEMENTS
1. BANK DEBT. In March 1998, concurrently with the Notes offering
described below, PHI replaced its existing $155 million multi-currency,
long-term credit facility with a consortium of financial institutions, with a
$65 million multi-currency revolving credit facility and a $35 million
LIBOR-based leveraged lease facility. Interest rates were variable, with either
prime or LIBOR indexes. SunTrust Bank, Central Florida, N.A. was the agent and
lead lender for this facility (the "SunTrust Facility"). In December, 1998, PHI
amended the existing SunTrust Facility which amendment terminated the revolving
credit portion of the Facility, retaining the leveraged lease facility (the
"Synthetic Lease") and up to $2 million coverage under an interest rate swap
arrangement, which provided hedging against interest rate movements under the
Synthetic Lease. The Facility also provided for a fully cash-collateralized
Letter of Credit facility of up to $10 million. The SunTrust Facility matured on
June 30, 1999. Principal payments were required under the Synthetic Lease in the
amounts of $10 million by December 8, 1998, $12.5 million by March 31, 1999, and
the balance by June 30, 1999. PHI was also required to commence marketing its
headquarters property in Orlando, Florida, and the New York movie themed hotel
property underlying the Synthetic Lease, and to use the proceeds to reduce
principal on the SunTrust Facility.
All outstanding indebtedness under the SunTrust Facility was paid in
full prior to the Petition Date, with the exception of an outstanding balance
under the Letter of Credit Facility pursuant to which two letters of credit
totaling in the aggregate $2.5 million remain outstanding, fully secured by cash
collateral accounts. The obligations of PHI under the SunTrust Facility were
guaranteed by each of its material Subsidiaries, and secured by a mortgage on
the Company's Orlando, Florida headquarters property and other assets.
2. PUBLIC NOTES. In March 1998, PHI issued $250 million face amount of
12% Senior Subordinated Notes due in 2005. The Notes were issued pursuant to an
Indenture with United States Trust Company of New York as Indenture Trustee.
Interest on the Notes was payable semi-annually in arrears on April 1 and
October 1 of each year, commencing October, 1998. The documents governing the
Notes contain certain covenants which, among other things, restrict the issuance
of additional debt and preferred stock, payment of dividends, and the sale of
assets.
3. MAJOR SUPPLIERS AND VENDORS. The Company has entered into a Supply
Agreement effective January 1, 1999 with ProPlayer, Inc. and Salem Sportswear,
Inc. for the provision of soft-line goods (T-shirts, fleecewear and other
non-leather merchandise) which is secured by a purchase money security interest
in such goods held for delivery or delivered to the Company for sale pursuant to
a Purchase Money Security Agreement dated May 1, 1999. As of the Petition Date,
ProPlayer asserts that it was owed approximately $1.1 million for goods
delivered to various Company locations, and held merchandise worth approximately
$1.2 million in its own warehouse pending the placement of orders. ProPlayer
also asserts that PHI is indebted to it for an unearned advance of approximately
$950,000. PHI is in the process of reviewing these Claims.
Alliant Food Services distributes food supplies to all Company-owned
store locations in the U.S., pursuant to a contract through the end of 1999. As
of the Petition Date, Alliant was owed approximately $2.0 million, and has
asserted a reclamation Claim of approximately $450,000. The Company is in the
process of negotiating a new long-term Supply Agreement with Alliant. Other
significant vendor agreements include exclusive supplier arrangements with
PepsiCo for non-alcoholic beverages supplied to most Company locations, and
which provide for promotional fees paid by Pepsi through rebates against
purchases. In addition, there are Company-wide agreements for cleaning services
and supplies.
4. LEASES AND CONTRACTS (FRANCHISES, JOINT VENTURE, OTHER). PHI
through its Domestic and Foreign Subsidiaries, is party to long term,
non-cancelable operating and capital leases primarily for its unit sites. Leases
are generally established using a base rental amount and/or the payment of a
percentage of sales. Certain leases provide for fixed and/or variable escalating
lease payments over the terms of the lease. PHI has guaranteed substantially all
leases of its Subsidiaries. Leased units contain furniture, fixtures and
equipment, leasehold improvements, and Memorabilia which are Company-owned,
leased or on loan from third parties. Since January, 1999 approximately 30
leased sites have been closed, franchised, licensed or sold, or become subject
to termination agreements. Approximately 25 locations are expected to continue,
and approximately five continue to be evaluated. There are two significant joint
ventures in which the Company has acquired either real property interests or
development rights, which are held in part through non-Debtor subsidiaries.
PLANET MOVIES
The first such venture is the PLANET MOVIES arrangement with AMC for
the development of a Columbus, Ohio theater, restaurant and retail complex.
Through its wholly-owned, non-Debtor subsidiary Planet Hollywood Theaters, Inc.,
PHI has formed a 50-50 joint venture with AMC Entertainment, Inc., one of the
nation's leading motion picture exhibitors, to develop, own and operate a
multi-screen, movie theater megaplex under the brand name PLANET MOVIES BY AMC.
The Columbus, Ohio megaplex opened in the summer of 1999, and includes PLANET
HOLLYWOOD and ALL STAR CAFE restaurants. PHI has guaranteed the joint venture
obligations of its Subsidiary.
1567 BROADWAY
The second major ongoing venture is a commercial condominium project
with several prominent real estate developers to construct and own a 50-plus
story building, containing a hotel, restaurant, and provisions for signage on
the building's exterior facility, at the intersection of Broadway and 47th
Street in New York City's Times Square redevelopment area. The premises are
currently under construction, and consist of a "Hotel Unit," "Retail Unit" and
"Sign Unit." PHI, through its wholly-owned, non-Debtor subsidiary Planet
Hospitality Holdings, Inc. ("Holdings"), owns a 20% membership interest (the
"Membership Interest") in Times Square Partners, LLC ("TSP"), the owner of the
Hotel and Signage units. In addition, Filed Subsidiary Planet Hollywood (Region
III), Inc. ("Region III") owns a fee interest in the Retail Unit, consisting of
portions of the lower four floors of the building, which was pledged to Atlantic
Financial on behalf of SunTrust under the Synthetic Lease portion of the
SunTrust Facility. The obligation underlying the Synthetic Lease has been fully
repaid, and the Debtors are in the process of reconveying record title from
Atlantic Financial.
The agreement with TSP contains numerous, significant restrictions on
transfer of the Retail Unit and the Membership Interest. The Debtors are
presently in negotiations to sell the fee interest in the Retail Unit to Intell
1567 Broadway ("Intell"), an affiliate of the managing member of TSP, for
approximately $30.0 million plus forgiveness of approximately $2.0 million of
construction debt. As part of this transaction, TSP will relax the restrictions
on transferability of the Membership Interest, enabling the Debtors to realize
additional value for the Estates through either (i) sale by TSP of the entire
hotel/restaurant/signage project, resulting in a PRO RATA distribution of net
profits to the Debtors on account of the Membership Interest, or (ii) the amount
realized from sale of the Membership Interest, which sale shall be subject to
TSP's right of first refusal on the terms of the Debtors' contract with the
potential buyer. The Debtors believe that the additional value realized from
either of these alternatives would likely equal or exceed $15 million. The sale
of the 1567 Broadway interest is a crucial component of the restructuring plan.
The sale of the Retail Unit is not expected to close prior to the Effective
Date, and thus the New Senior Secured Notes must be issued as a "bridge" source
of funding until the Retail Unit Sale closes. Realization of the value of the
TSP interests is also vital to the Reorganized Debtors' viability post-Effective
Date, and is projected to be received in fiscal year 2000.
5. STOCKHOLDER INTERESTS. Stockholder interests arise from a 1996
public offering of PHI's Class A Old Common Stock, the sale of Class A stock to
an investor in 1997, and the issuance of PHI's restricted, non-voting, Class B
Old Common Stock to certain Celebrities. As of the Petition Date, a majority of
the outstanding shares of Old Common Stock was held by officers or directors,
franchisees and joint venture partners of PHI and the balance was held by the
public. The Company has issued Old Warrants in connection with private placement
debt offerings, and issued Stock Options to management, employees and
Celebrities.
The Company's Common Stock had been traded on the New York Stock
Exchange under the symbol "PHL", was delisted from the Exchange effective August
18, 1999, and has been trading on the over the counter market since. The
Company's Old Senior Subordinated Notes also trade on the over the counter
dealer market.
The following table sets forth, for the calendar periods indicated,
the high and low closing sales prices per share for the Company's Old Common
Stock as reported on the New York Stock Exchange, and for the Company's Old
Senior Subordinated Notes based on information available from Bloomberg. There
is no single established source of information for PHI's bond prices.
<TABLE>
<CAPTION>
Old Senior
Old Common Stock Subordinated Notes
----------------------- ---------------------
High Low High Low
<S> <C> <C> <C> <C>
1998 $ $ $ $
Quarter ended March 31................. 14 1/8 7
Quarter ended June 30.................. 10 4/7 7 1/8
Quarter ended September 30............. 7 1/4 4 90.60 58.02
Quarter ended December 31.............. 4 3/8 2 1/4 57.70 35.98
1999
Quarter ended March 31................. 4.00 1.00 39.68 18.25
Quarter ended June 30.................. 1.25 0.69 28.05 19.24
Quarter ended September 30............. 0.94 0.14 20.10 19.48
</TABLE>
At the present time, there are (i) approximately 4300 record owners
and 19,000 street name Holders of the Company's Old Common Stock and (ii) one
record owner and approximately 500 street name Holders of the Company's Old
Senior Subordinated Notes.
D. PRE-PETITION DATE SPECIAL TRANSACTIONS
Prior to the Petition Date, PHI completed several asset dispositions
certain of the proceeds of which were used to satisfy the SunTrust debt as it
matured. The excess was held for working capital needs. In May of 1999, PHI
completed the sale of property including a building under construction located
on Boylston Street in Boston, Massachusetts, to a subsidiary of Atlantic
Financial, for approximately $7.0 million. In July of 1999, PHI completed the
sale/leaseback of its headquarters building in Orlando, Florida to a subsidiary
of RREEF Funds. The property was sold for approximately $16.6 million, and
leased back at an annual rental of approximately $2.7 million per year for
fifteen years. In August 1999, PHI completed the sale of its 20% interest in the
Pennsylvania Hotel in New York City and a related license agreement, to Vornado
Realty Trust for approximately $18 million. In July of 1999, PHI completed a
sale of its leasehold interest in 1501 Broadway, Inc. to Parkview Restaurant
Group and effectuated a discharge of its long-term lease for that property. The
improvements were sold for approximately $7.5 million including an approximate
$1.0 million equity stake in the purchaser.
The proceeds of the foregoing sales satisfied substantially all
obligations owed under the SunTrust Agreements, including the obligation
underlying the Synthetic Lease for the 1567 Broadway property.
E. LEGAL PROCEEDINGS
The Company and the Filed Subsidiaries are potential or named
defendants in several lawsuits and claims arising in the ordinary course of
business. While the outcome of such claims, lawsuits or other proceedings
against the Company cannot be predicted with certainty, management expects that
such liability, to the extent not provided for through insurance or otherwise,
will not have a material adverse effect on the financial statements of the
Company.
In addition, there are several litigations which have been commenced
by or against PHI or various affiliates which are unusual in nature. While PHI
does not anticipate substantial liability against it as a result of any likely
outcome of such actions, the nature of the claims asserted are as follows:
(i) BONNIE FALKENBERG, ET AL. VS. PHI AND ITS BOARD MEMBERS. This
action was commenced in the Delaware Chancery Court in August, 1999 immediately
following PHI's announcement of its settlement agreement with the Holders of its
Old Senior Subordinated Notes, and the potential elimination of Old Common Stock
interests. It purports to be a class action on behalf of shareholders (no class
has been certified, however) which seeks injunctive relief blocking the proposed
restructuring. The complaint was neither served nor prosecuted prior to the
Petition Date. The Debtors have filed a Motion to dismiss for lack of subject
matter and personal jurisdiction, insufficiency of process and failure to state
a claim.
(ii) EDG VS. PHI, ET AL. This action was commenced in New York State
Supreme Court in September, 1999. During the summer of 1999, PHI executed a
letter of intent with EDG regarding the potential sale of several of the ALL
STAR CAFE locations and entities. EDG failed to execute definitive agreements by
the deadline required in the letter of intent, and the agreement expired by its
own terms. Notwithstanding that expiration, caused solely by its own delay and
indecision, EDG obtained a temporary restraining order against PHI in connection
with the New York action to enjoin any other disposition of the ALL STAR CAFE
assets. As of the Petition Date, PHI believed the temporary restraining order
had expired without extension, and that all claims of EDG to any interest in the
ALL STAR CAFE assets were entirely specious. EDG had asserted its belief that
the temporary restraining order was still in effect and that PHI could not sell
the assets to any third party. PHI has removed the state court action to the
District Court for the Southern District of New York and moved for transfer of
the action to the Bankruptcy Court. As of the Petition Date, PHI sought to
reject a lease in Atlanta where it operated an All Star Cafe restaurant. EDG
filed opposition papers to the rejection asserting that the state court
restraining order prevented the Debtors from rejecting the lease. Following a
hearing on November 2, 1999, the Court issued a Memorandum Decision holding that
there was no evidence of any stay, and permitting the rejection of the Atlanta
Lease. EDG has not sought to appeal the Court's ruling.
(iii) PLANET HOLLYWOOD (REGION IV), INC., PLANET HOLLYWOOD,
INTERNATIONAL INC. V. HOLLYWOOD CASINO CORPORATION, HOLLYWOOD CASINO AURORA
INC., EDWARD T. PRATT, III, HOLLYWOOD CASINO TUNICA, INC. AND GREATE BAY CASINO
CORP. This action is currently pending in the United States District Court for
the Northern District of Illinois. Planet Hollywood initially filed a complaint
against the defendants alleging causes of action under the Lanham Act for false
designation of origin, trademark and trade dress infringement, dilution as well
as related state law claims, based on the fact that defendants recently
developed marks and trade dress infringe upon and dilute the value of Planet
Hollywood marks and trade dress. Planet Hollywood also seeks a declaration from
the Court that it be allowed to register and use its marks and trade dress for
casino services, and that its use of the descriptive term "Hollywood" does not
infringe upon any of defendant's rights. Defendants filed counterclaims against
Planet Hollywood for trademark infringement, false designation of origin, unfair
competition, trade dress infringement, trademark dilution and unjust enrichment.
Defendants also seek a declaratory judgment that would enjoin Planet Hollywood
from expanding into casino services under a mark or trade name which includes
the term "Hollywood". The trial on liability was completed prior to the Filing
Date. PHI and the defendants stipulated to lift the automatic stay solely to
permit the Judge's ruling on liability to be entered, and appeals, if any to be
brought. The District Court has just issued a 154 page ruling, the synopsis of
which is that the Court dismissed both sides' declatory judgment actions
relating to whether Planet Hollywood's use of its marks for casinos would
infringe upon Hollywood Casino's marks on the grounds that the issue is not ripe
because there is no immediate use in the Casino field. Otherwise, the Court
denied both sides' claims with respect to trademark and trade dress
infringement. There was no financial award. Both sides are to pay their own
costs. The parties are reviewing appeal possibilities.
(iv) ALL STAR CAFE (NEW YORK), INC. V. RICHTER & RATNER CONTRACTING
CORP. All Star Cafe commenced an action against Richter & Ratner Contracting
Corp., in the Supreme Court of New York County seeking damages in excess of $2.5
million arising out of a breach of contract in the construction of the All Star
Cafe in New York City. In response, Richter & Ratner asserted counterclaims
seeking an alleged contract balance and damages in excess of $4.0 million.
(v) PHI V. AMERICA EUROPE ASIA INTERNATIONAL TRADE AND MANAGEMENT
CONSULTANTS, LTD. ("AEA"). Prior to the Petition Date, PHI filed a Complaint
against the Defendant in the Circuit Court of the Ninth Judicial Circuit in and
for Orange County, Florida, seeking recovery of damages related to an Asset
Purchase Agreement ("APA") between the parties whereby PHI, INTER ALIA,
repurchased franchise rights previously sold to AEA. The Company sustained
damage as a result of Defendant's failure to indemnify the Company for expenses
associated with third party litigation as required by the APA, as well as the
damage to the Company's name and reputation therefrom, and damage to the value
of the Company's rights to develop franchises in certain territories. PHI's
out-of-pocket expenses associated with this litigation exceeded $400,000. The
Defendant originally counterclaimed against the Company and its Chief Executive
Officer, Robert Earl, for a variety of matters, including common law fraud,
misrepresentation, deceit, constructive fraud, violations of certain securities
laws and breach of contract. The Defendant's counterclaims sought damages in
excess of $11 million. In October 1999, the court granted PHI's motion to strike
and dismiss a variety of the Defendant's claims, including the claims based on
fraud, securities law violations, deceit and other matters, and dismissed the
claims against Robert Earl for failure to state a cause of action against him
personally. Of the ten counts of the original counterclaim, six counts are still
pending relating, in general, to the Defendant's claim that PHI has breached the
terms of the APA, and leave has been granted to amend the counterclaim. The
Defendant claims that PHI should pay Defendant certain amounts based upon the
profitability of certain of the restaurant locations previously owned by the
Defendant. The APA requires any such payments to be made by delivery of
unregistered shares of PHI's Old Common Stock. PHI has not paid the Defendant
any consideration under the APA. The Defendant asserts that PHI's failure to
timely deliver to it the consideration due under the APA gives rise to an
unsecured Claim in these cases. AEA has amended its alleged damage request in
pleadings before the Bankruptcy Court to $25 million.
On November 19, 1999, PHI removed the state court action to the
Orlando Division of the United States District Court for the Middle District of
Florida, and moved for a transfer of that action to the Bankruptcy Court. AEA
has filed a Second Amended counterclaim against Robert Earl, which PHI believes
contains the same defects which caused the prior dismissal of those claims. PHI
also filed a motion with the Bankruptcy Court for an expedited estimation
procedure under 11 U.S.C. Section 502(c), which would allow an estimation of
AEA's Claims for purposes of allowance and distribution under the Plan, prior to
the date set for confirmation of the Plan. AEA has filed an objection to the
request for estimation. PHI asserts that such estimation is necessary because of
the highly inflated nature of AEA's Claims, which on their face would more than
double the cost of payment of General Unsecured Claims under the Plan. PHI
strongly disputes the validity and amount of the AEA Claims and believes it is
in the best interests of these Estates and their Creditors to have a prompt
determination of the allowable amount of the AEA Claims. A hearing on the
Debtors' estimation motion was held on December 3, 1999, and the parties were
asked to submit supplemental information to the Court.
(vi) BRIAN WOODS V. PHII. This action is currently pending in the
Circuit Court of the Ninth Circuit in and for Orange County, Florida. Brian
Woods, the former President of Planet Hollywood Entertainment filed a complaint
against PHII alleging breach of contract and seeking damages in excess of $2.0
million. PHII denies the extent of Mr. Woods' claims, particularly the amount of
alleged compensation sought, and has filed offsetting counterclaims.
(vii) PLANET HOLLYWOOD (REGION I), INC. (MIAMI) V. NORTHPORT
MARKETPLACE, LTD., CITY NATIONAL BANK CORPORATION AND NOMURA ASSET CAPITAL
CORPORATION. Planet Hollywood (Miami) commenced an action against its Landlord,
Northport Marketplace, on or about October 6, 1999, in the Circuit Court of the
Seventh Judicial District, Broward County, Florida, seeking rescission for
breach of contract. Specifically, Planet Hollywood asserts Defendant Northport
Marketplace breached its contractual obligations in failing to complete
construction of the unit premises, provide a grand opening event, provide
parking for Planet Hollywood employees and guests and otherwise interfered with
Planet Hollywood's possession and quiet use and enjoyment of the unit premises.
As of October 29, 1999, Defendant Northport Marketplace has not filed its Answer
to Planet Hollywood's Motion for Declaratory and Ancillary Relief.
IV. AVAILABLE FINANCIAL INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, which
include its form 10-K for fiscal year 1998, Form 10-Q's for the first three
quarters of 1999, 8-K's filed in the first three quarters of 1999, proxy
statements and other information filed by the Company or by third parties with
respect to the Debtors are incorporated herein by reference, and can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Regional Offices of the Commission at 7 World Trade Center, Room 1300, New
York, New York 10048. Copies of such material can also be obtained by mail from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates, and are available on the Internet at
www.sec.com. Creditors and shareholders may also obtain copies of the Debtors'
public filings by written requests addressed to Stroock & Stroock & Lavan LLP,
180 Maiden Lane, New York, New York 10038, Attn: Rose Serrette.
V. PRE-FILING PLAN DISCUSSIONS AND AGREEMENT
WITH INFORMAL NOTEHOLDERS' COMMITTEE;
LANDLORD SETTLEMENTS, INSIDER TRANSACTIONS UNDER THE PLAN
A. NOTEHOLDERS' AGREEMENT
As a result of weaker than anticipated results, the Company did not
have sufficient cash available to make the $15.0 million scheduled interest
payments due April 1, 1999 and October 1, 1999 on the Old Senior Subordinated
Notes.
By letter agreement dated April 14, 1999 the Company retained
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") to provide financial
advice about various restructuring alternatives for the Company, and on April 8,
1999 retained Stroock & Stroock & Lavan LLP to provide legal restructuring
advice. At the request of the Company, a group of Noteholders organized an
unofficial committee for the purpose of negotiating a possible restructuring
transaction with the Company. The Unofficial Noteholders' Committee, which then
represented in excess of $200 million of the Notes, selected Willkie Farr &
Gallagher ("Willkie") as its counsel and Houlihan Lokey Howard & Zukin
("Houlihan") as its financial advisors. As is customary in similar
circumstances, the Company entered into letter agreements with Houlihan and
Willkie dated as of April 23, 1999 and May 4, 1999, respectively, whereby the
Company agreed to pay the fees and expenses of the Unofficial Noteholders'
Committee's professionals and, as of the Petition Date, had paid approximately
$325,000 (inclusive of a paid retainer, some portion of which is still held on
account) to Willkie and $658,000 (inclusive of any amounts that may be held on
account) to Houlihan. After their retention, the financial and legal advisors to
the Unofficial Noteholders' Committee conducted business and legal due
diligence, including discussions with the Company's management concerning the
business and operations of the Company and its financial condition and
prospects.
In June, 1999, after the Company indicated that it had identified
investors willing to make an investment in the Company, a restricted
subcommittee (the "Subcommittee") of the Unofficial Noteholders' Committee was
formed to negotiate with the Company regarding the terms of a restructuring.
Members of the Subcommittee entered into confidentiality agreements with the
Company pursuant to which such members agreed to become restricted from trading
the Company's securities for a limited period of time for the purposes of
negotiating the terms of a restructuring and evaluating financial information
that had not yet been publicly released. The Subcommittee was initially
comprised of: (i) Salomon Smith Barney; (ii) SF Investments, Inc.; and (iii)
Varde Partners, Inc. Later in the process, Bay Harbour Management L.C., which
had acquired a substantial position in the Old Senior Subordinated Notes, joined
the Subcommittee.
Nearly two months of active negotiations between the Subcommittee and
the Company resulted in an agreed Term Sheet dated August 9, 1999, which set
forth the key terms for this reorganization, including the designation of
classes under the Plan of Reorganization and the treatment of those classes, and
called for the ultimate filing of the Chapter 11 Cases to implement such
restructuring. These negotiations involved significant compromises by both
sides. The Term Sheet was ultimately approved by holders of over 2/3 in face
amount of the Notes, who indicated in writing their agreements to support the
Term Sheet, including support for a plan incorporating the Term Sheet
provisions. No Noteholder expressly committed to vote its claim in any
particular manner in the Company's prospective chapter 11 case.
The parties agreed that on the Effective Date, Reorganized PHI's board
shall consist of seven members, five of whom shall be appointed by the New Money
Investors and two by the Creditors' Committee. A super-majority equal to a
majority of the members of the Board including at least one Class A director
will be required for the approval of any insider transactions and/or major
transactions.
The parties further agreed that Robert Earl, the co-founder of the
PLANET HOLLYWOOD concept, shall remain as Chief Executive Officer. Selection of
a Chief Financial Operator/Chief Operating Officer prior to the Effective Date
of the Plan, is to be subject to the consent of the Unofficial Noteholders'
Committee (now the Creditors' Committee), not to be unreasonably withheld, and
thereafter to the super-majority approval of at least six members of the
Company's Board.
On August 17, 1999, PHI issued a press release announcing the
agreement in principle with the Noteholders, and the Company's intention to file
for Chapter 11 before the end of the year. On August 23, 1999 an 8-K was filed
further describing the terms of the agreement.
B. LANDLORD SETTLEMENTS
In order to address another significant area of perceived potential
exposure, the Company undertook an effort to approach landlords for facilities
with leases that the Company needed to terminate or restructure in order to
continue to operate profitably, to try to reach agreement on restructuring of
the lease and other debt terms, or for the transfer to third parties or release
of the property back to the landlord.
Immediately prior to the Petition Date, the Company entered into
agreements with certain of its landlords and other third parties regarding the
disposition of various unprofitable leasehold obligations through a pre-petition
termination agreement, franchise or license agreement or assignment. Generally,
all such leases were at or above market for their locations.
Twelve locations were disposed of through termination agreements
whereby the landlords agreed to a termination of the lease, and, if applicable,
the obligations of PHI as guarantor in exchange for a pre-petition cash payment
and, in most cases, forfeiture of the tenant's rights to certain on-site
furniture, fixtures and equipment. In all instances the cash payments made to
the landlords were significantly less than the Company's calculation of the cost
of payment of such landlord's Rejection Claim.
Five locations were disposed of by way of pre-petition franchise or
license agreements with an accompanying assignment of the lease to third parties
or a franchise or license agreement directly with the landlord. Generally, these
agreements provide for a limited license of the PLANET HOLLYWOOD or OFFICIAL ALL
STAR CAFE trademark in order to operate for a period ranging from a few weeks to
several years. In most instances, no fee or payments were due from the Company
and, in connection with the longer-termed franchises and licenses, a continuing
royalty will be payable in connection with such locations' operations. In all
instances, any payments made to the landlords were substantially less than the
Company's calculation of the cost of payment of such landlord's Rejection Claim.
A list of the locations subject to Landlord Settlement Agreements is annexed
hereto as Exhibit 4.
In addition, the Company executed a number of lease amendments that
enabled the Company to continue operations at the locations on more viable
economic terms. Those agreements required the Debtors to assume the leases
immediately or shortly after the Chapter 11 filings.
C. INSIDER TRANSACTIONS UNDER THE PLAN
1. ALTERNATIVE RESTRUCTURING EFFORTS RESULTING IN CURRENT PLAN
STRUCTURE
In the fall of 1998, the Company recognized that, based on its recent
historical operating results and significant debt burden, if it were unable to
reverse its poor operating results, it might not be able to meet its debt
obligations as they came due with cash flow from operations. From the end of
1998 into the second quarter of 1999, management explored various financial and
strategic alternatives including selling all or certain assets of the Company,
raising additional capital or restructuring its debt obligations. The Company
hired two international investment banking firms to help evaluate and explore
alternatives. Faced with rapidly declining operating results, increased
competition in the theme restaurant business and an impending liquidity problem
due to the termination of the SunTrust working capital facility, the Company was
unable to effectuate a transaction that would provide it the capital it needed
to turnaround its operations.
Because of the Company's continued deterioration in its operating
results and its inability to find additional capital, the Company decided not to
make its scheduled April 1, 1999 interest payment on the Old Senior Subordinated
Notes. The Company retained DLJ to advise it on a restructuring of its
outstanding debt. DLJ and the Unofficial Noteholders' Committee's financial
advisor, Houlihan, reviewed the Company's business plan and operations and
conducted due diligence on its properties and other assets and liabilities. In
light of the Company's continued operating losses, declining comp store sales,
operating margin erosion and negative EBITDA, each of which was expected to
continue for the foreseeable future due to increased competition in the theme
restaurant business, the Company and Unofficial Noteholders' Committee agreed
that without additional capital, the Company could not continue as a going
concern. In addition, the parties agreed that any restructuring would need to
result in a significant reduction in debt and that the existing common equity
was essentially worthless given the significant liabilities relative to the
liquidation value of the Company.
In the absence of any other apparent source of funding to effectuate a
financial restructuring and operating turnaround, a group of investors (the "New
Money Investors") including Robert Earl, Chairman and CEO of Planet Hollywood
and a holder, directly or indirectly, of approximately 23.5% of PHI's Old Class
A Common Stock, Mr. Ong Beng Seng, a director and holder of approximately 12.4%
of PHI's Old Class A Common Stock, His Royal Highness Prince Alwaleed Bin Talal
Bin Abdulaziz Al Saud, a holder of approximately 16.7% of PHI's Old Class A
Common Stock, and other business and personal colleagues of Mr. Earl agreed to
provide $30 million of capital to the Company. The $30 million of capital, in
conjunction with asset sales, was to be used to reduce the Company's debt and
provide working capital to fund operating losses until the restaurant operations
could be improved. The plan was premised on Robert Earl remaining Chairman and
CEO given that his intimate knowledge of the business and his relationships with
both the old and new Celebrities would be vital to any turnaround. Through a
series of negotiations between the New Money Investors and the Unofficial
Noteholders' Committee, it was determined that the New Money Investors would
receive approximately 70% of the new fully diluted equity of the Reorganized
Debtors, representing an equity value of approximately $43 million and
enterprise value of approximately $100 million.
Neither the Company nor the Unofficial Noteholders' Committee obtained
a fairness opinion with respect to the equity purchase price for the New Money
Investors; however, negotiations between the New Money Investors, not all of
whom are presently insiders of the Company, and the holders of the Old Senior
Subordinated Notes were arms length. The Company and its financial advisors
believe the valuation is reasonable based on the Company's going forward
business plan which includes a significant reduction in the number of owned
restaurants, a downsizing of corporate overhead and continued competition in the
theme restaurant business. See, Section VII.F. "Emergence Business Plan."
In evaluating the acceptability of the purchase price to be paid by
the New Money Investors, the Unofficial Noteholders' Committee was guided in
large measure by: (a) the advice of its financial advisor, Houlihan, which
conducted substantial due diligence in connection with the restructuring
negotiations and was provided full access to the Company's books and records and
other non-public information; and (b) its consideration of available
alternatives. Given the Company's financial condition, it appeared that,
regardless of how thorough the Company's marketing efforts had been, no
non-insider third party would be found that would be willing to make a
meaningful equity investment in the Company. Consequently, the alternative to
the Plan would have been either a restructuring of the Company pursuant to which
the Noteholders and other creditors would have received little or no cash, but
substantially all of the Company's equity, or a bankruptcy liquidation of the
Company's assets. The former option, a restructuring of the Company without the
New Money Investors, would have placed the entire risk of the Company's future
prospects upon the Company's creditors. The latter option, the liquidation of
the Company's assets, would have, based upon Houlihan's analysis, likely
resulted in a cents on the dollar recovery to creditors substantially lower than
that available under the Plan.
In connection with negotiation of the Term Sheet and the Plan, PHI
representatives consulted with holders of approximately 52% of the outstanding
Old Common Stock of PHI, but did not negotiate or consult with holders or
representatives of non-insider shareholders, nor has management been approached
at any time by any representatives of such holders, despite the widespread
publicity surrounding the announcement of the terms of PHI's restructuring by
the press in early August, 1999 when the agreement with the Unofficial
Noteholders' Committee was first announced, and again in connection with the
commencement of these cases in October, 1999.
2. OTHER INSIDER BENEFITS UNDER THE PLAN
Post-Effective Date, current officers, directors and shareholders,
namely Mr. Earl (or a trust held by his children), Mr. Ong Beng Seng, and His
Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Al Saud will control a
substantial portion of the 70% of the New Common Stock allocable to the New
Money Investors. The effect of ownership of the New Class B Common Stock is that
the New Money Investors will have voting control of the stock and of the Board
of Reorganized PHI, subject, however, to the Board membership rights of Holders
of New Class A Common Stock under the Plan, the supermajority voting provisions
contained in the Amended Articles of Incorporation and By-Laws of PHI, and other
restrictions on transactions contained in the New Senior Secured Notes
Indenture, the New Secured PIK Notes Indenture, and the Working Capital
Facility. The New Money Investors will receive a substantial portion of the New
Warrants to be issued, however, the "strike price" is such that there is minimal
if any further dilutive effect on the interests of other New Class A Common
Stock Holders. It is not anticipated that the New Money Investors will receive
any Stock Options.
Mr. Earl will remain as Chairman and Chief Executive Officer of
Reorganized PHI, and will receive an employment agreement, expected to be
substantially comparable economically to his current agreement. The identity and
compensation arrangements for other directors and senior executive-level
officers are not yet determined, and will be disclosed at or prior to the
Confirmation Hearing; however, executive and director compensation is not
expected to differ materially from the levels currently in place.
Article XII of the Plan provides for present and former officers and
directors to receive unconditional releases from each of the Reorganized Debtors
and each Holder of a Claim or Interest from all claims, obligations, suits,
judgments, damages and liabilities based upon any act or omission, transaction,
event or other occurrence taking place on or before the Effective Date relating
to the Reorganized Debtors, the Chapter 11 Cases or the Plan. The officers and
directors are not entitled to releases from acts or omissions which are the
result of gross negligence or willful misconduct. In addition, existing
guarantees by any of the Debtors' officers or directors or their affiliates of
leases, contracts or other obligations that are assumed under the Plan are not
released, and their enforcement is not enjoined under the Plan.
The Plan provides for the survival of indemnification obligations of
PHI, the other Debtors and any non-Debtor affiliates to current or former
officers or directors of the Debtors and the Old Indenture Trustee, whether such
obligations arose prior or subsequent to the Petition Date. Such indemnification
obligations might be dischargeable if the triggering claims were contingent at
the time of confirmation of the Plan.
Article XII of the Plan also provides a general injunction which
precludes all Holders of Plan Securities and all Holders of Claims or Interests
from taking any act to enforce against any officer or director of any of the
Debtors any right, claim or cause of action arising under or related to any Old
Security or any Claim, except for claims arising from the gross negligence or
willful misconduct of such entities.
The Debtors believe the releases and indemnities proposed to be
granted to the Debtors' officers, directors and shareholders, and the injunctive
provisions of which they are beneficiaries, are entirely appropriate in these
cases, and will further the implementation of the Plan. As described above, the
Plan is premised on an infusion of equity capital by the New Money Investors.
Several of those parties are currently officers, directors or significant
shareholders of PHI. In addition to the need to incentivize those entities to
participate in the Plan, there are no known or asserted claims against any
officers, directors or shareholders that should preclude the releases and
indemnities provided under the Plan.
Although PHI has not commissioned an independent investigation of
potential claims against officers, directors, shareholders or third parties, its
management has made a careful and thorough search in connection with the
preparation of the Schedules of Liabilities and Statement of Financial Affairs
filed with the Bankruptcy Court, and believes it has disclosed all known and
knowable contingent claims. As more fully described in Section III.E. of this
Disclosure Statement, only the following claims against officers, directors or
shareholders (in their capacity as such) are known to exist:
(a) Bonnie Falkenberg, et. al. vs. PHI and its Board Members.
This action for injunctive relief against the restructuring
contemplated by the Plan names certain officers and
directors of PHI. The action has not been prosecuted or even
served on the defendants, in PHI's view is entirely mooted
by these Chapter 11 proceedings, and neither asserts nor
gives rise to independent claims against the officers or
directors of PHI.
(b) PHI vs. AEA. AEA has asserted counterclaims in this
proceeding alleging fraud, securities violations, criminal
misconduct and other such charges against Robert Earl as
well as PHI. Most of AEA's counterclaims against PHI were
dismissed by the State Court prior to the commencement of
these Chapter 11 Cases, and all claims against Mr. Earl were
dismissed, but can be and have been re-asserted by AEA. In
PHI's view of the case, AEA's claims are purely for breach
of contract, at best, and are highly inflated in the amounts
sought. PHI does not believe that Robert Earl has liability
individually on these claims.
(c) There may be other Claims that are or could be asserted against
officers or directors as well as the Debtors that have not been identified, but
they are not believed to be material.
The Debtors' existing obligation to indemnify their current and former
officers and directors for liability and expenses arises from their respective
corporate by-laws. As an example, Article X of the existing by-laws of PHI
provides that PHI may indemnify any person who is a party or is threatened to be
made a party to any claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative, including one by or in the right of PHI, by
reason of the fact that he is or was a director, officer, employee or agent of
PHI, or is or was serving at the request of PHI as a director, officer, employee
or agent of another corporation, partnership, joint venture, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
PHI, and with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct unlawful.
PHI has no indemnification obligation in respect of any claim, issue
or matter where such person has been adjudged to be liable for negligence or
misconduct in the performance of his duty to PHI unless the court in which such
action is pending determines that such person is fairly and reasonably entitled
to indemnity for expenses deemed proper by the court. While the aforementioned
proceedings may give rise to Claims for indemnification by officers or directors
of PHI, PHI believes that such Claims were incurred by those officers and
directors in the fulfillment of their duties to PHI and are properly
indemnifiable. It is not contemplated that PHI will be indemnifying its officers
or directors for any, and certainly not for any willful, violations of federal
securities laws. There are no known indemnity Claims being assumed under the
Plan that arise out of unresolved securities litigation and that would otherwise
be discharged.
The Securities and Exchange Commission ("SEC") has raised questions
with PHI, and in fact does so in connection with most Chapter 11 reorganization
cases with public securities, where there are releases from direct or
third-party claims, as to the propriety of the granting of the releases.
Although PHI hopes to satisfy the SEC as to the propriety of the releases,
indemnities and injunctive relief for officers, directors and insider
shareholders under the facts and circumstances of the Plan, the SEC reserves its
rights to raise objections to those provisions in connection with the
confirmation hearing on the Plan. In addition, one Creditor, AEA, has filed an
objection to the granting of releases as provided in the Plan, which objection
the Debtors intend to oppose. See Section III.E.(v) for further discussion of
AEA's Claims.
VI. POST-PETITION OPERATIONS
A. COMMENCEMENT OF THE REORGANIZATION CASES AND FIRST DAY ORDERS
On October 12, 1999, PHI and twenty-five of its Domestic Subsidiaries
filed petitions for reorganization under Chapter 11 of the Bankruptcy Code in
the United States Bankruptcy Court for the District of Delaware. The petitions
were filed for various entities authorized to be Debtors under U.S. bankruptcy
laws, that were operating entities or held assets requiring protection from
creditors. No petitions were filed for inactive subsidiaries, or for U.S. or
foreign subsidiaries with assets located exclusively overseas, or for the
entities participating in the PLANET MOVIES and 1567 Broadway joint ventures.
With respect to the status of foreign operations, see Section VI.D. For the
status of the PLANET MOVIES and 1567 Broadway ventures, see Section III.C.4.
Since the Petition Date, the Debtors have continued in possession of
their properties as debtors-in-possession, and are authorized to operate and
manage their businesses and to enter into all transactions that they could have
entered into in the ordinary course of their businesses had there been no
Chapter 11 filings. Pursuant to various provisions of the Bankruptcy Code, the
Debtors have sought and obtained numerous orders from the Bankruptcy Court
intended to facilitate the operations of the Company. Those orders authorized
the Debtors to, among other things: (i) use cash collateral subject to Liens;
(ii) continue their cash management programs, bank accounts, and investment
practices; and (iii) pay certain prepetition Claims, including Claims of
employees for wages, salaries and employee benefits, sales and use taxes, and
special customer-related Claims in order to permit the Debtors to conduct their
ongoing business substantially as they did prior to the Petition Date.
In addition the Debtors have obtained authorization to assume their
Pre-Petition Date liability insurance contracts with Zurich Insurance, and have
been authorized to reject five leases of real property, for the following
locations: Planet Hollywood (Coconut Grove, Florida), Planet Hollywood (Ft.
Lauderdale, Florida), Planet Hollywood (Houston, Texas), All Star Cafe (Atlanta,
Georgia) and Cool Planet (Irvine, California).
The Debtors have obtained approval of the retentions of various
professionals, namely Stroock & Stroock & Lavan LLP as lead bankruptcy counsel,
Young Conaway Stargatt & Taylor LLP as local Delaware counsel, Gray Harris &
Robinson as special Florida counsel, PriceWaterhouseCoopers as independent
accountants, tax advisors, bankruptcy and reorganization consultants, as well as
various "ordinary course" professionals, and expect shortly to retain DLJ as its
financial advisors and investment bankers.
The Debtors have obtained a commitment letter, subject to definitive
documentation and Bankruptcy Court approval, from the CIT Group/Business Credit,
Inc. ("CIT") for debtor-in-possession financing. When the applicable credit
agreement and CIT's due diligence are finalized, the Debtors intend to seek
court approval of this financing. Due to its strong cash position, the obtaining
of DIP financing is not immediately urgent for the Company's survival, however,
the Debtors believe the facility will (i) result in greater supplier/vendor
comfort and credit support, (ii) free up excess cash currently collateralizing
certain Letters of Credit, (iii) be available as a backstop against unforeseen
liquidity drains or unanticipated delays in the restructuring process, and (iv)
potentially result in the availability of exit financing from CIT.
BAR DATE MOTION/GLOBAL NOTICE
On motion of the Debtors, the Bankruptcy Court entered an order (the
"Bar Date Order") on October 13, 1999 authorizing the Debtors to fix a bar date
for filing proofs of claim against each of the Debtors for Claims that arose
prior to the Petition Date and that did not fall within one of the enumerated
exceptions. These exceptions include: (A) Claims previously filed with the
Bankruptcy Court; (B) Claims listed on the Debtors' Schedules of Liabilities if
(i) the creditor agrees with the classification and amount of its scheduled
Claim and (ii) the Claim is not listed as disputed, contingent or unliquidated;
(C) Claims allowed by order of this Court entered on or before the Bar Date; (D)
administrative expense Claims; (E) Claims of a governmental unit; and (F) Claims
arising solely from (i) outstanding principal or interest due on account of
ownership of the Senior Secured Notes and (ii) the ownership of Common Stock. In
addition, the Court approved the form of the Bar Date Notice and mailing and
publication procedures.
The Bankruptcy Court also authorized the Debtors to employ Donlin,
Recano & Company, Inc. as the official claims agent for the purpose of receipt
and docketing of Claims. The Debtors fixed December 13, 1999 at 4:00 p.m.
(Eastern Time) as the Bar Date, and timely sent Bar Date Notices to those
parties designated to receive same under the Bar Date Order, consisting of: (i)
the Office of the United States Trustee, (ii) all persons or entities filing a
Notice of Appearance herein, (iii) all persons or entities listed on the
Debtors' schedules of liabilities, (iv) all parties or entities known to be
party to an executory contract or unexpired lease of the Debtors, and (v) all
other entities known by the Debtors that hold or assert pre-petition Claims.
In addition, notice of the Bar Date was published in the Wall Street
Journal (Global Edition) covering the United States, Europe, Asia and Central
America, and in local newspapers for each geographical area in which the Debtors
conduct business.
EXTENSION OF TIME TO ASSUME/REJECT LEASES
By motion dated November 24, 1999, the Debtors sought a Court order
extending their time to assume or reject unexpired real property leases that the
Debtors had not previously rejected or assumed, to the earlier of the
Confirmation Date and March 11, 2000. Leases relating to twenty-four locations
where the Debtors continue to operate theme restaurants and merchandise store
units were identified on Exhibit A to the Motion. These leases are currently
viewed as being integral to the Debtors' on-going operations and constitute
assets of the Estates. The Debtors believe that until the Plan is confirmed,
they need to be able to retain their flexibility in respect of which locations
to assume, assume and assign to third parties, or reject. On December 9, 1999,
the Bankruptcy Court approved the Motion.
MOTION TO ASSUME CERTAIN LEASES
By motion dated November 24, 1999 the Debtors sought a Court order
authorizing their assumption of leases located at the following locations:
Planet Hollywood and Official All Star Cafe, Myrtle Beach, S.C.; Planet
Hollywood Mall of America, Bloomington, Minnesota; Planet Hollywood, Lake Tahoe,
Nevada; Planet Hollywood, Baltimore, Maryland; Planet Hollywood, Honolulu,
Hawaii; Planet Hollywood, San Diego, California; and Planet Hollywood, Seattle,
Washington. Each of these leases is the subject of a favorable modification
which the applicable Debtor and the landlord negotiated prior to the Petition
Date. On December 9, 1999, the Bankruptcy Court approved the assumption motion.
In addition, the Debtors intend to file a Motion to assume certain of their
Leases with Walt Disney World Co. and related entities.
SUPPLEMENTAL MOTION EXTENDING TIME TO ASSUME/REJECT LEASES NOT INCLUDED WITHIN
THE INITIAL LEASE EXTENSION MOTION
On December 7, 1999, the Debtors filed with the Court a supplemental
motion seeking to extend the time to assume or reject nine (9) additional
unexpired leases regarding non-residential real property (the "Supplemental
Motion"). These nine locations were unintentionally omitted from the Debtors'
prior motion to extend the time to assume or reject such leases before
expiration of the sixty (60) day period under Section 365 of the Bankruptcy
Code. The hearing on the Supplemental Motion is currently scheduled for December
17, 1999. In the Supplemental Motion, the Debtors are seeking to extend through
Confirmation the time to assume or reject the leases designated therein (with
the exception of the Planet Hollywood Beverly Hills, California location as to
which the Debtors have determined not to extend the time, and to allow the Lease
to be deemed rejected), along with any other unexpired real property leases to
which the Debtors were a party on the Petition Date.
B. STORE CLOSINGS
Immediately prior to the Petition Date, the Debtors closed 17
restaurant locations, and removed and warehoused inventory and Memorabilia
pending their utilization elsewhere in the business, return to owners, or other
disposition. The closing of restaurant locations is a significant component of
the Debtors' operational restructuring plan, since the reduction of costs and
losses related to those operations is necessary to return the Debtors'
operations to stability and profitability. A list of the locations closed from
and after January 1, 1999 is attached hereto as Exhibit 3.
C. FORMATION OF THE CREDITORS' COMMITTEE
On October 22, 1999, the United States Trustee appointed an Official
Committee of Unsecured Creditors, consisting of (i) Alliant Foodservices, Inc.;
(ii) America Europe Asia International Trade and Management Consultants, Ltd.;
(iii) Bay Harbour Management L.C.; (iv) Rockwell Architecture, Planning and
Design, P.C.; (v) SF Investments; (vi) United States Trust Company of New York;
and (vii) Varde Partners, Inc. On November 23, 1999, Alliant resigned from the
Creditors' Committee. The Creditors' Committee has retained Willkie Farr &
Gallagher as its legal counsel and Houlihan Lokey Howard & Zukin as its
financial advisors.
D. FOREIGN OPERATIONS AND PROCEEDINGS
As of the Petition Date, the Company operated 10 Company-owned
restaurant/store units, located in London and Gatwick, England (2), Dublin,
Ireland (1), Amsterdam, Holland (1), Germany (3), and France (3). The French and
ongoing U.K. operations are owned by non-Debtor, U.S. subsidiaries, namely
Planet Hollywood Paris, Inc./ Planet Hollywood France, L.C. and Planet Hollywood
London, Inc./ Planet Hollywood Trocadero, L.C. The other European operations are
owned by companies formed under the laws of the respective countries where
operations are conducted. The Company has determined to shut down, franchise or
sell unprofitable locations. The Company expects to continue to operate two
PLANET HOLLYWOOD locations in the U.K., and has sold its interests in the London
SOUND REPUBLIC location. The Company will retain and operate all units in
France. The Company has already closed or franchised all locations in Canada,
and liquidation proceedings have been commenced in Amsterdam for the entity
operated there. The Company is currently evaluating its operations in Germany
and Ireland.
E. ASSET TRANSFERS
The Debtors have filed a Motion seeking authorization to transfer
before the last day of their current taxable year (i.e., December 26, 1999),
certain assets, including items of Memorabilia and certain stock and partnership
investments, to one or more newly-formed, wholly-owned subsidiaries of PHI. The
transfer is expected to simplify and produce significant cost savings in the
Debtors' compliance with state tax administrative and reporting requirements.
These transfers will not adversely affect the rights of current Creditors, nor
will they impede the effectuation of the Plan, as such assets will be available
to be pledged as collateral for financing and debt securities issued before, on
or after the Effective Date.
F. EMERGENCE BUSINESS PLAN
As a condition to confirmation of a plan of reorganization, Section
1129 of the Bankruptcy Code requires, among other things, that the Bankruptcy
Court determine that confirmation is not likely to be followed by liquidation or
the need for further financial reorganization of the debtor. In connection with
the development of the Plan and for the purposes of determining whether the Plan
satisfies this feasibility standard, the Company has analyzed the ability of the
Reorganized Debtors to meet their future obligations under the Plan and to have
sufficient liquidity and capital resources to conduct its business.
In this regard the Company has prepared projections of the Reorganized
Debtors' operations, for a five year period commencing January 1, 2000. The
projections assume an Effective Date for the Plan of December 31, 1999. If the
actual Effective Date is different from the December 31, 1999 assumed date, the
projected results depicted may be materially different.
The following projections were not prepared with a view toward
compliance with published guidelines of the Securities Exchange Commission or
the American Institute of Certified Public Accountants regarding projections or
generally accepted accounting principles. The projections necessarily rely on
numerous assumptions, all of which were made by the Company, with respect to
industry performance, general business and economic conditions, taxes and other
matters, many of which are beyond the Company's control. Such projections and
assumptions are not necessarily indicative of current values or future
performance, which may be significantly less favorable or more favorable than as
set forth below. Although the projections represent the best estimates of the
Company, for which the Company believes it has a reasonable basis as of the date
hereof, of the results of operations and financial position of the Company
giving effect to the Restructuring, they are only estimates, and actual results
may vary considerably from projections. Consequently, the inclusion of the
projected information herein should not be regarded as a representation by the
Company, the Company's advisors or any other person that the projected results
will be achieved. The projections have not been audited, reviewed or compiled by
an independent public accountant and accordingly, no opinion, or any other form
of assurance, has been expressed with respect to the financial information
presented herein.. The projections were prepared by the Company and have not
been independently verified or audited by any other party. The Company cannot
and does not make any representation or warranty with respect to the adequacy or
accuracy of the assumptions or the projections.
The Company does not generally publish its business plans and
strategies or make external projections of its anticipated financial positions
or results of operations. Accordingly, the Company does not intend to update or
otherwise revise the financial projections to reflect circumstances existing
after the date hereof or to reflect the occurrence of unanticipated events, even
in the event that the assumptions underlying the projections are shown to be in
error, except as required by applicable law, after the hearing on the
confirmation of the Plan even if the projections become false or misleading by
reason of subsequent events. The projections should not be relied on for any
purpose following the Confirmation Date. The projections should be read together
with the available financial information described in Section IV, including the
Consolidated Financial Statements of the Company and the related notes thereto
set forth in the Company's public filings.
<PAGE>
1. PROJECTED CONSOLIDATED STATEMENT OF OPERATIONS
Planet Hollywood International, Inc. and Subsidiaries
(Debtors-in-Possession)
Projected Consolidated Statements of Operations
Fiscal Years Ending December 31, 2000 through 2004
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Projected Plan
Emergence Date Projected Fiscal Years Ending December 31,
Adjustments
Jan. 1, 2000 2000 2001 2002 2003 2004
<S> <C> <C> <C> <C> <C> <C>
Total Revenues $ - $193,898 $201,541 $218,400 $237,718 $258,879
Cost and Expenses
Cost of Sales - 52,869 54,618 59,158 64,393 70,097
Operating Expenses - 118,100 122,177 127,071 132,881 138,297
General and - 19,000 19,950 20,948 21,995 23,095
Administrative
Depreciation and
Amortization - 10,785 11,585 12,385 13,185 13,985
__________ _________ _________ ________ ________ ________
Income (Loss) from - (6,855) (6,789) (1,161) 5,264 13,406
Operations __________ _________ _________ ________ ________ ________
Other
(Income)/Expenses
(Gain)/Loss on
Continuing - 23 - - - -
Operations of All
Star Units
(Gain)/Loss on Sale 17,643 106 - - - -
and Write-off of
Assets
(Gain)/Loss on (181,609) - - - - -
Extinguishment
of Debt/Claims
Interest Expense - 10,985 11,240 11,024 10,400 10,396
Interest (Income) - (714) (306) (336) (393) (438)
_________ ________ ________ ________ _______ _______
Pre-tax Income 163,966 (17,255) (17,723) (11,850) (4,743) (3,448)
Income Taxes - - - - - -
_________ _________ ________ _________ ________ ________
Net Income/(Loss) $ 163,966 $(17,255) $(17,723) $(11,850) $(4,743) $(3,448)
========= ========= ========= ========= ======== ========
EBITDA $ - $ 3,930 $ 4,796 $ 11,223 $18,449 $27,391
========= ========= ========= ========= ======== ========
* Projected fiscal year ending December 31, 2000 excludes the projected plan emergence date adjustments.
** The accompanying footnotes and assumptions are an integral part of these financial projections.
*** Slight rounding may have occurred in calculations.
</TABLE>
2. PROJECTED CONSOLIDATED BALANCE SHEETS
A copy of the Debtors' projected consolidated balance sheets as of
December 31, 1999 through December 31, 2004, is set forth on the next page of
this Disclosure Statement.
<PAGE>
<TABLE>
<CAPTION>
PLANET HOLLYWOOD INTERNATIONAL, INC
(Debtor-in-Possession)
Projected Consolidated Balance Sheets as of December 31, 1999 through December 31, 2004
(Amounts in Thousands)
Projected Projected Projected
Pre Plan Post
Emergence Emergence Date Emergence
Date Adjustments Date Projected December 31,
Dec 31, 1999 DR CR Jan 1, 2000 2000 2001 2002 2003 2004
Assets:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash $14,444 $52,950 $60,733 $6,661 $30,560 $33,585 $39,272 $43,769 $5,000
Accounts Receivable, Net 12,748 5,000 7,748 8,202 8,317 8,429 8,558 8,699
Inventories, Net 15,911 15,911 15,988 16,047 16,092 16,145 16,202
Prepaid Expenses 8,855 950 7,905 8,001 8,056 8,110 8,172 8,240
------- ------ ------- ------- ------- ------- ------
TOTAL CURRENT ASSETS 51,957 38,225 62,750 66,004 71,903 76,643 38,140
------- ------ ------- ------- ------- ------- ------
Restricted Cash 6,355 6,355 6,355 6,355 6,355 6,355 6,355
PP&E, Net 185,889 185,889 143,770 138,986 133,401 127,016 119,831
Goodwill, Net 13,433 13,433 12,633 11,833 11,033 10,233 9,433
Investments in Affiliated
Entities 18,096 18,096 12,123 12,123 12,123 12,123 12,123
Other Assets 15,847 12,643 3,204 3,204 3,204 3,204 3,204 3,204
------- ------ ------- ------- ------- ------- ------
TOTAL ASSETS $291,577 $265,201 $240,836 $238,505 $238,019 $235,574 $189,086
======== ======== ======== ======== ======== ======== ========
LIABILITIES AND EQUITY:
Accounts Payable $3,369 $3,369 $8,309 $12,529 $17,268 $18,277 $19,295
Taxes Payable 2,013 2,013 1,969 2,138 2,183 2,235 2,292
Accrued Liabilities 19,289 19,289 19,579 19,745 19,908 20,095 20,299
------ ------ ------ ------- ------- ------- -------
Total Current Liabilities 24,671 24,671 29,857 34,412 39,360 40,606 41,886
------ ------ ------ ------- ------- ------- -------
OTHER LIABILITIES
Working Capital Revolving Loan - - - - - - 37,202
Senior Secured Notes - 22,000 22,000 - - - - -
Capital Lease 3,823 3,823 3,791 3,755 3,715 3,672 3,624
Administrative/Priority Expenses 5,950 5,950 - - - - - -
Other Liabilities (Deferred
Rentals/Credits) 21,197 21,197 21,197 21,197 21,197 21,197 21,197
------- ------ ------- ------- ------- ------- ------
TOTAL OTHER LIABILITIES 30,970 47,020 24,988 24,952 24,912 24,869 62,023
------- ------ ------- ------- ------- ------- ------
Liabilities - Subject to
Compromise
Class 1 Claims - Priority - - - - - - - -
Class 2 Claims - SunTrust - - - - - - -
Class 3 Claims - Miscellaneous
Secured 2,000 2,000 - - - - - -
Class 4 Claims - Convenience 1,500 1,500 - - - - - -
Class 5 Claims - Senior
Subordinated
Notes 282,000 282,000 55,000 55,000 63,894 73,826 79,724 80,724 -
Class 6 Claims - General
Unsecured 22,458 22,458 5,209 5,209 6,052 6,992 7,551 7,646 -
------- ------- ------ ------ ------ ------ ------ ------
TOTAL LIABILITY - SUBJECT
TO COMPROMISE 307,958 60,209 69,945 80,819 87,275 88,369 -
------- ------- ------ ------ ------ ------ ------ ------
TOTAL LIABILITIES 363,599 131,901 124,790 140,182 151,547 153,845 103,909
------- ------ ------- ------- ------- ------- ------
Stockholders' Equity (76,726) 17,643 181,609 87,239 69,985 52,262 40,411 35,668 39,116
New Equity - 41,357 41,357 41,357 41,357 41,357 41,357 41,357
Minority Interest 4,704 - - 4,704 4,704 4,704 4,704 4,704 4,704
------- ------ ------- ------ ------- ------- ------- ------- ------
TOTAL LIABILITIES AND EQUITY $291,577 $384,501 $384,501 $265,201 $240,836 $238,505 $238,019 $235,574 $189,086
======== ======== ======== ======== ======== ======== ======== ======== ========
** The accompanying notes in the Disclosure Statements are an integral part of
these financial projections.
*** Slight rounding may have occurred in calculations.
</TABLE>
<PAGE>
3. PROJECTED CONSOLIDATED STATEMENT OF CASH FLOW
Planet Hollywood International, Inc. and Subsidiaries
(Debtors-in-Possession)
Projected Consolidated Statements of Cash Flow
Fiscal Years Ending December 31, 2000 through 2004
(Amounts in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Projected
Emergence Date Projected Fiscal Years Ending December 31,
Adjustment
Jan. 1, 2000 2000 2001 2002 2003 2004
<S> <C> <C> <C> <C> <C> <C>
NET CASH $ 950 $ 7,898 $ 9,025 $ 11,688 $ 10,496 $ 18,393
PROVIDED BY
OPERATING ACTIVITIES
Cash Flow From
Investing Activities:
Additions to Property - (5,000) (6,000) (6,000) (6,000) (6,000)
and Equipment
Proceeds from Assets - 43,000 - - - -
Sales
Investment in Affiliates - - - - - -
Other - - - - - -
-------- -------- -------- -------- ------- --------
NET CASH (USED IN) - 38,000 (6,000) (6,000) (6,000) (6,000)
PROVIDED BY -------- -------- -------- -------- ------- --------
INVESTING
ACTIVITIES
Cash Flow From
Financing Activities:
Decrease/(Increase) in - - - - - -
Restricted Cash
Proceeds from Refinance - - - - - 37,202
Notes Payable
Proceeds from Senior 22,000 - - - - -
Secured Note
Proceeds from New 30,000 - - - - -
Equity
Payment of (5,950) - - - - -
Administrative/Priority
Claims
Payment of Class 1 (54,783) - - - - -
through 6 Claims
Repayment of Senior - (22,000) - - - -
Secured Note
Repayment of New
Secured PIK Notes - - - - - (88,369)
-------- -------- -------- -------- ------- --------
NET CASH (USED IN)
PROVIDED BY
FINANCING (8,733) (22,000) - - - (51,167)
ACTIVITIES -------- -------- -------- -------- ------- --------
Net Increase (Decrease) (7,783) 23,898 3,025 5,688 4,496 (38,769)
in Cash -------- -------- -------- -------- ------- --------
BEGINNING CASH 14,444 6,661 30,560 33,585 39,272 43,769
BALANCE -------- -------- -------- -------- -------- --------
ENDING CASH $6,661 $30,560 $33,585 $39,272 $43,769 $5,000
BALANCE ======== ======== ======== ======== ======== ========
* Projected fiscal year ending December 31, 2000 excludes the projected plan emergence date adjustments.
** The accompanying footnotes and assumptions are an integral part of these financial projections.
*** Slight rounding may have occurred in calculations.
</TABLE>
4. NOTES AND ASSUMPTIONS
The projected financial information reflects management's judgment as of
November 8, 1999, the Plan and Disclosure Statement filing date, and should be
read in conjunction with the assumptions, qualifications and explanations set
forth herein.
The "Debtor Entities" referred to herein, are the units that are included in the
bankruptcy and are assumed to continue operating after the Effective Date.
However, the Company is continuing to evaluate all currently operating
locations, and may be required to adjust these assumptions. These PLANET
HOLLYWOOD ("PH"), OFFICIAL ALL STAR CAFE ("OASC"), and COOL PLANET ("CP")
entities include the following operations:(1)
PH Atlanta PH Myrtle Beach PH Seattle
PH Atlantic City PH Nashville PH St. Louis
PH Baltimore PH New York (3) PH Washington DC
PH Dallas PH Orlando(4) PH South Beach(5)
PH Honolulu PH Reno CP Anaheim
PH Lake Tahoe PH San Antonio CP Santa Monica
PH Las Vegas(2) PH San Diego OASC Disney(6)
PH Mall of America PH San Francisco OASC Myrtle Beach (7)
- ---------------
(1) In addition, the Company operates the Worldwide Warehouse Store in
Orlando, FL, which is expected to continue operating after the
Effective Date. Due to the immaterial nature of its operations, this
location has not been included in the Company's projections.
(2) This location includes the PH Las Vegas restaurant as well as the PH
Las Vegas Superstore.
(3) This location includes the PH New York restaurant and retail store. It
is anticipated that these units will be moved to the current location
of the OASC New York restaurant. See footnote (5).
(4) This location includes the PH Orlando restaurant and the PH Orlando
Superstore.
(5) It is anticipated that OASC units will be converted to PH units in the
first quarter of Fiscal Year 2000.
(6) This location includes the OASC Orlando restaurant and the OASC Gear
Superstore. It is anticipated that OASC Orlando restaurant will be
sold or otherwise disposed of in Fiscal Year 2000.
(7) It is anticipated that OASC Myrtle Beach will be sold or otherwise
disposed of in Fiscal year 2000.
The "Non-Debtor Entities," referred to herein, are units not included in the
bankruptcy and are assumed to continue operating as company-owned units after
the Effective Date. These entities include the following operating units:
PH Cannes PH Gatwick PH Paris(9)
PH EuroDisney PH London(8) Planet Movies
(8) This location includes the PH London restaurant and the London
Superstore.
(9) This location includes the PH Paris restaurant and the Notre Dame
retail store.
For presentation purposes, the projected operating results of the Debtor
Entities and those of the Non-Debtor Entities are shown on a consolidated basis.
Cure costs relating to the assumption of unexpired leases are included in the
estimate of $1.45 million for administrative cure costs.
Additional information concerning the assumptions underlying the projections is
as follows:
NOTE 1 - PLAN TERMS AND CONSUMMATION
The projections assume an Effective Date as of December 31, 1999 with Allowed
Claims and equity Interests treated in accordance with the treatment provided in
the Plan.
NOTE 2 - ECONOMIC CONDITIONS
The projections were prepared assuming that economic conditions in the markets
served by the Company do not differ markedly over the next five years from
current economic conditions. Inflation in revenues and costs are assumed to
remain at current levels.
NOTE 3 - REVENUES
Revenues reflect the assumed effect of closing under-performing stores,
implementing a new menu, and launching a new public relations and advertising
campaign which includes the introduction of new Celebrity talent. Comparable
store sales for food, beverage and bar are projected to be approximately (6.8%)
and 3.0% during Fiscal Year 2000 and Fiscal Year 2001, respectively and to
increase to approximately 8.0% in subsequent years. Comparable store sales for
merchandise are projected to be approximately (9.1%), 3.0%, and 8.0% for Fiscal
Year 2000, Fiscal Year 2001 and Fiscal Year 2002, respectively. Increase in
comparable store sales for merchandise is assumed to be approximately 10% in the
following years. The plan assumes no new Company-owned store openings during the
projection period. It is projected that Planet Movies' EBITDA will be
approximately $1.1 million in Fiscal Year 2000 and will increase by
approximately 5% in Fiscal Year 2001 and 10% each subsequent year.
Franchisee fees constitute amounts owed by franchisees for buying the franchise
and for royalties based on gross revenues from food, beverage and merchandise.
The royalties typically range from 3% to 10% for food and beverage sales and
from 5% to 15% for merchandise sales. The Company also receives royalties for
licensing its brand and trademarks to its joint ventures and other parties.
During the projection period, the Company projects to sell three site franchises
in Fiscal Year 2000 and four site franchises in each subsequent year. The plan
assumes that royalties will be approximately $5.9 million in Fiscal Year 2000
and will increase through same store sales growth and additional franchises.
NOTE 4 - COST OF SALES - RESTAURANT AND MERCHANDISE
The plan assumes that food, beverage and bar cost of sales is approximately
25.2% throughout the projection period. Merchandise cost of sales is assumed to
be approximately 33.5% for the projection period. The merchandise cost of sales
is based on historical run rates of the go-forward stores. The food, beverage
and bar cost of sales reflects the roll-out of the Company's new menu.
NOTE 5 - OPERATING EXPENSES
Operating expenses includes the following expenses for the stores and Planet
Movies: payroll, occupancy, store level general and administrative expense,
store level public relations and advertising expense and other miscellaneous
operating expenses. These expenses are projected based on historical run rates.
The plan assumes that store level operating expenses will be approximately $105
million in Fiscal Year 2000 and will increase approximately 3.5% each year
during the projected period. The plan assumes that Planet Movies will have
operating expenses of approximately $12.8 million in Fiscal Year 2000 and will
increase approximately 5% in Fiscal Year 2001 and 10% each subsequent year.
NOTE 6 - CORPORATE GENERAL AND ADMINISTRATIVE
It is projected that expenses will be reduced to approximately $19 million in
Fiscal Year 2000 and will increase approximately 5% annually throughout the
projection period. This reflects an overall reduction of corporate costs due to
the store closure program including a reduction in work force, decreased
discretionary spending, reduced use of outside consultants and other cost
containment measures.
NOTE 7 - WORKING CAPITAL
Accounts receivable and inventory are projected on the basis of historic
patterns applied to projected levels of operations. Accounts payable for
foreign, non-Debtor entities is forecast based on the historic pattern of
approximately 30 days outstanding. Domestic accounts payable days outstanding
are projected to be approximately 15 days by the end of Fiscal Year 2000,
approximately 22 days for Fiscal Year 2001 and approximately 30 days in the
following years.
NOTE 8 - CAPITAL EXPENDITURES / ASSET SALES
Capital expenditures in Fiscal Year 2000 - Fiscal Year 2004 reflect investments
in existing stores and corporate. The Company estimates that it will spend
approximately $5 million in Fiscal Year 2000 and $6 million in Fiscal Year 2001
on store renovations, conversions and general corporate matters. In the second
quarter of Fiscal Year 2000, the plan assumes the sale of the 1567 Broadway
interests. It is assumed that this sale will contribute in excess of $43 million
net of commissions.
NOTE 9 - EQUITY INVESTMENT
On the Effective Date, an equity investment of approximately $30 million will be
used to finance the Effective Date payments and going-forward working capital
needs.
NOTE 10 - SENIOR SECURED NOTES
On the Effective Date, the Company will obtain an approximately $22 million
bridge loan facility which will be used to finance the payments on the Effective
Date and for going-forward working capital needs. The 1567 Broadway interests
and other assets will secure the Senior Secured Notes. Interest on the notes is
calculated at a rate of 8% per annum. The Senior Secured Notes are assumed to be
repaid in the second quarter of Fiscal Year 2000 when the 1567 Broadway
interests are sold.
NOTE 11 - REFINANCE NOTE PAYABLE
The Plan assumes the Company will obtain new Notes payable of approximately 37.0
million in Fiscal Year 2004 to repay the Senior Subordinated Secured PIK Notes.
NOTE 12 - ACCOUNTS PAYABLE, TAXES PAYABLE AND ACCRUED LIABILITIES
These balances include liabilities of Non-Debtor Entities and the post-petition
liabilities of Debtor Entities. Accrued liabilities include accrued interest,
rent, payroll and related benefits, insurance, taxes and other miscellaneous
accrued items.
NOTE 13 - ADMINISTRATIVE EXPENSE/ PRIORITY CLAIMS
On the Effective Date, this balance includes approximately $3.5 million of
professional fees, approximately $400 thousand of taxes, approximately $600
thousand of reclamation claims and approximately $1.4 million for curing
contracts and leases.
NOTE 14 - CLAIMS CLASSES
Treatment of all Classes of Claims, except Classes 5 and 6, is projected in
accordance with Article V of the Plan of Reorganization.
NOTE 15 - CLASS 5 CLAIMS: OLD SENIOR SUBORDINATED NOTES
The New Secured PIK Notes to be provided to the Holders of Class 5 Claims have a
par value of $60.0 million but have been recorded by the Company at their
estimated fair market value as of the Effective Date of approximately $55.0
million, reflecting a 12% - 15% yield on the New Secured PIK Notes.
NOTE 16 - CLASS 6 CLAIMS: GENERAL UNSECURED CLAIMS
The New Secured PIK Notes to be provided to Holders of the Class 6 Claimants
have a par value of $5.7 million but have been recorded by the Company at their
estimated fair market value as of the Effective Date of approximately $5.2
million, reflecting a 12% - 15% yield on the New Secured PIK Notes.
NOTE 17 - OTHER CREDITOR CLASSES AND EQUITY INTERESTS
Treatment of all Classes of Claims, except Classes 5 and 6, is projected in
accordance with Article V of the Plan.
NOTE 18 - FRESH START ACCOUNTING
Fresh start accounting has not been adopted in the financial projections
included herein. The Company is evaluating whether fresh start accounting is
required upon emergence from bankruptcy. The fresh start principals are
contained in the American Institute of Certified Public Accountants Statements
of Position 90-7, "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code." If the Company concludes that fresh start accounting is
appropriate, such adoption would not impact the projected cash flow depicted
herein.
G. CURRENT AND POST-CONFIRMATION MANAGEMENT
1. INFORMATION REGARDING EXECUTIVE OFFICERS AND DIRECTORS
A. POST-CONFIRMATION OFFICERS AND DIRECTORS
On the Effective Date, the initial board of directors of Reorganized
PHI shall consist of Robert Earl, and four other designees of the New Money
Investors, and two members designated by the Creditors' Committee, to be
announced at or prior to the Confirmation Hearing. Any changes as of the
Effective Date to the executive officers of Reorganized PHI shall be announced
at or prior to the Confirmation Hearing. The identity of additional officers and
directors is not yet finally determined but PHI believes the selections will be
consistent with the best interest of the Debtors, their Creditors, and
consistent with public policy. Subject to any requirement of Bankruptcy Court
approval under Section 1129(a)(5) of the Bankruptcy Code, such persons
designated as directors and officers of Reorganized PHI shall assume their
offices on the Effective Date and shall continue to serve in such capacity
thereafter, pending further action of the board of directors or shareholders of
Reorganized PHI in accordance with the Amended PHI Articles, the Amended PHI
Bylaws and applicable state law. Post-Confirmation compensation of such officers
and directors including the terms of any new employment agreements have not been
finally determined, but are not expected to differ materially from current
levels and terms of compensation for the various positions.
Certain biographical information relating to Mr. Earl is as follows:
- ------- -----------------------------------------------------------------------
NAME AND PRINCIPAL OCCUPATION
Robert Earl, Chairman and Chief Mr. Earl has been Chief Executive
Executive Officer of PHI. Officer of the Company since its
inception in 1993, and Chairman of the
Board of Directors since November 1998.
Prior to joining the Company, Mr. Earl
was the Chief Executive Officer of Hard
Rock Cafe p.l.c. Mr. Earl was the
founder of Presidents Entertainment in
1977, a company that developed theme
restaurants. Mr. Earl has over 24 years
experience in the restaurant industry.
- -------------------------------------------------------------------------------
B. CURRENT EXECUTIVE OFFICERS AND DIRECTORS
The current executive officers and directors of the Company and their
ages and positions are listed below:
- -------------------------------------------------------------------------------
NAME AGE POSITION/PRINCIPAL OCCUPATION
Robert Earl 47 Chairman of the Board since November,
1998, President and Chief Executive
Officer of PHI.
Michael Tarnopol 62 Director since June 1996
Thomas Avallone 41 Executive Vice President and Chief
Financial Officer; Director since
February 1996
Mark McCormack 68 Director since June 1996
Claudio Gonzalez 64 Director since June 1996
Michael Montague 67 Director since May 1998 (recently
deceased)
Ong Beng Seng 53 Director since February 1996
CURRENT EXECUTIVE OFFICERS WHO DO NOT SERVE AS DIRECTORS
Scott E. Johnson 43 Executive Vice President, General
Counsel and Secretary
- -------------------------------------------------------------------------------
C. CURRENT DIRECTOR COMPENSATION AND SHAREHOLDER INTERESTS
Directors who are not compensated as officers of PHI receive $20,000 in
annual fees, with an additional $1,000 payment for each Board of Directors'
meeting attended and a $500 payment for each meeting attended of a special
committee (i.e. audit, compensation and stock option committee) of the Board.
The Board of Directors held monthly meetings through March, 1999 and have
generally held weekly meetings thereafter. Directors who are compensated as PHI
employees receive no additional compensation for service as a director. PHI will
also reimburse each director for out-of-pocket expenses incurred in attending
meetings of the Board of Directors and its committees. All directors, except Mr.
Earl, were eligible to receive stock options.
The following current directors were known by PHI to be beneficial
owners of outstanding shares of PHI's Class A Common Stock or shares underlying
options to acquire such shares as of February 28, 1999.
- -------------------------------------------------------------------------------
AMOUNT OF BENEFICIAL
NAME OWNERSHIP OF CLASS A PERCENT OF CLASS (%)
COMMON STOCK
Robert Earl 22,876,367 23.5 1
Michael Tarnopol 22,666 2 <1
Thomas Avallone 226,232 3 <1
Mark McCormack 16,666 4 <1
Claudio Gonzalez 61,111 5 <1
Michael Montague 26,667 6 <1
(recently deceased)
Ong Beng Seng 12,050,335 7 12.4
- -------------------
1. 100 shares of stock are held individually. The rest of the shares
owned by Mr. Earl are held of record by Ropat Limited Partnership. A
related entity also owns 1,053,793 shares of PHI's non-registered,
non-voting Class B Common Stock, representing approximately 9.0% of
such class.
2. 16,666 shares represent shares underlying options to acquire Class A
Common Stock which were exercisable on or before May 31, 1999.
3. 24,221 of the shares listed represent shares underlying options to
acquire Class A Common Stock which were exercisable on or before May
31, 1999.
4. All of these shares represent shares underlying options to acquire
Class A Common Stock which were exercisable on or before May 31, 1999.
5. 33,333 shares represent shares underlying options to acquire Class A
Common Stock which were exercisable on or before May 31, 1999.
6. 16,667 shares represent shares underlying options to acquire Class A
Common Stock which were exercisable on or before May 31,1999.
7. Shares are owned of record by Leisure Ventures Pte. Ltd., formally
Planet Hollywood Holdings Pte., Ltd. Mr. Ong disclaims beneficial
ownership of the shares.
- -------------------------------------------------------------------------------
D. CURRENT EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth, as to PHI's Chief
Executive Officer and the other two most highly compensated executive officers
serving as executive officers at the end of the 1999 fiscal year, all
compensation awarded to, earned by, or paid to said individuals (the "Named
Executive Officers") for all services rendered in all capacities to PHI and its
Subsidiaries for the fiscal years ended June 1997, 1998 and 1999 except as may
otherwise be specifically noted.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ----- ------------ ----------------------------------------------------------------------------------------------------
FISCAL ANNUAL COMPENSATION OTHER ANNUAL ALL OTHER
NAME AND POSITION YEAR SALARY ($) ANNUAL BONUS ($) COMPENSATION STOCK OPTIONS (#) COMPENSATION
<S> <C> <C> <C> <C> <C> <C>
Robert I. Earl 1997 $600,000 -- 4419 --
Chief Executive 1998 600,000 -- 6309 --
Officer and Chairman 1999 600,000 -- 6309 --
of the Board (estimated)
Thomas Avallone 1997 $300,000 -- 8854 --
Executive Vice 1998 375,000 75,000 8228 100,000 --
President and Chief 1999 375,000 -- 8228
Financial Officer (estimated)
Scott E. Johnson 1997 $200,000 -- 7,506 --
Executive Vice 1998 250,000 40,385 8,436 70,000 --
President, General 1999 250,000 -- 8436
Counsel and Secretary (estimated)
</TABLE>
2. EMPLOYMENT CONTRACTS
Several current and former Senior Executive Officers have entered into
employment agreements with PHI. Set forth below is a brief description of each
such agreement.
EMPLOYMENT AGREEMENT WITH ROBERT EARL
Mr. Earl and PHI entered into an employment agreement dated as of
August 8, 1995 providing for his employment as Chief Executive Officer of PHI
and its significant subsidiaries and affiliates, including Official All Star
Cafe, through December 31, 2001. The agreement currently provides for a base
salary of $600,000 per year with annual increases of at least 10%, an annual
incentive bonus in the discretion of the Board of Directors of PHI, and
participation in all benefits generally made available to executive officers of
the company. PHI has the right to terminate the agreement without any further
obligation in the event Mr. Earl (i) resigns from the company; (ii) willfully
breaches the agreement; or (iii) is convicted, of or pleads guilty to, a felony
involving moral turpitude or certain crimes involving the company's property.
The agreement provides that Mr. Earl may terminate the agreement in the event he
is not elected or retained in his present positions at PHI or PHI materially
reduces his responsibilities. In the case of such termination, or if the
agreement is terminated by the company without cause or upon Mr. Earl's death or
disability, the agreement provides for him to receive the remainder of his base
salary, all incentive bonuses granted and all options awarded under the stock
incentive plan. The agreement includes a non-competition provision prohibiting
Mr. Earl for a period of two years following the termination of his employment
with PHI in most circumstances from working for any company that operates
restaurants with a movie, sports or action hero theme.
EMPLOYMENT AGREEMENT WITH THOMAS AVALLONE
Mr. Avallone and PHI entered into an employment agreement dated
January 1, 1998 providing for his employment as Executive Vice President and
Chief Financial Officer through January 1, 2001, with such term automatically
renewing for additional one-year periods unless either party provides notice to
the other of its unwillingness to renew. The agreement currently provides for a
base salary of $375,000 with additional bonuses and salary increases to be
determined by the Board of Directors. The agreement may be terminated by PHI for
cause in the event (i) Mr. Avallone is convicted of, or pleads guilty to, a
crime involving moral turpitude or certain other crimes involving the company's
property, or (ii) he willfully breaches the agreement. If PHI terminates the
agreement for any reason other than for cause, the agreement provides for Mr.
Avallone to receive his base salary for the following twelve month period and to
become fully vested in all his stock options. Mr. Avallone may terminate the
agreement in the event of a material breach thereof by PHI after giving the
company notice and an opportunity to cure the breach or in the event that Mr.
Avallone no longer reports to Mr. Earl. In the case of any such termination, the
agreement provides for Mr. Avallone to receive his base salary for the following
twelve month period and to become fully vested in all his stock options. The
agreement also contains customary non-disclosure and non-competition provisions.
EMPLOYMENT AGREEMENT WITH IAN HAMILTON
Mr. Hamilton and PHI entered into an employment agreement dated
January 7, 1997 providing for his employment as President of PHI's subsidiary,
All Star Cafe, Inc. through February 28, 2000. The agreement provided for a base
salary of $250,000, with a minimum bonus of $50,000 per year, payable in cash or
stock options and such additional bonuses and salary increases as determined by
the Board of Directors. In connection with PHI 's decision to refocus on its
Planet Hollywood brand and joint venture, franchise, sell or otherwise dispose
of its Official All Star Cafe concept, Mr. Hamilton and PHI agreed to the early
release of Mr. Hamilton's employment agreement. Mr. Hamilton left the company in
April 1999. Pursuant to the terms of Mr. Hamilton's severance arrangement with
PHI, Mr. Hamilton was to receive his base salary and minimum bonus through
February 2000 and became fully vested in certain of his stock options.
EMPLOYMENT AGREEMENT WITH SCOTT JOHNSON
Mr. Johnson and PHI entered into an employment agreement dated May 1,
1996 (as amended on April 13, 1999) providing for his employment as Senior Vice
President, General Counsel and Secretary through February 28, 2000, with such
term automatically renewing for additional one-year periods unless either party
provides notice to the other of its unwillingness to renew. The agreement
currently provides for a base salary of $250,000, with additional bonuses and
salary increases to be determined by the President and/or Chief Executive
officer, and for Mr. Johnson's participation in the company employee benefit
plans. The agreement may be terminated by PHI for cause in the event Mr. Johnson
(i) is convicted of, or pleads guilty to, a crime involving moral turpitude or
certain other crimes involving the company's property; (ii) willfully breaches
the agreement; or (iii) has his license to practice law revoked. The agreement
provides that Mr. Johnson may terminate the agreement in the event of a material
breach thereof by PHI after giving the company notice and an opportunity to cure
the breach. In the case of such termination or non-renewal, the agreement
provides for him to receive his base salary and benefits for one year. The
agreement also contains customary non-disclosure and non-competition provisions.
Other employment agreements have been executed with lower level
corporate management employees (and with certain general managers as well).
VII. CONFIRMATION STANDARDS; LIQUIDATION ANALYSIS AND VOTING PROCEDURES
A. BRIEF EXPLANATION OF CHAPTER 11
Chapter 11 is the principal business reorganization chapter of the
Bankruptcy Code. Under Chapter 11, a debtor is authorized to reorganize its
business for the benefit of itself and its creditors and shareholders.
Consummation of a plan of reorganization is the principal objective in
a Chapter 11 case. In general, a plan of reorganization divides the claims
against and interests in a debtor into separate classes and allocates plan of
reorganization distributions among those classes. If the legal, equitable and
contractual rights of a class are unaffected by the plan of reorganization, it
is considered "unimpaired". Because they are unaffected, all claimants with
claims in unimpaired classes are deemed to have accepted the plan, and are
therefore not entitled to vote on the plan. All classes of claims or interests
that do not receive or retain any property under the plan on account of such
claim or interest are deemed to have rejected the plan of reorganization under
Section 1126(g) of the Bankruptcy Code. All other classes of claims or interests
are considered "impaired", and are entitled to vote on the plan of
reorganization.
Under the Bankruptcy Code, acceptance of the Chapter 11 plan of
reorganization is determined by class, and therefore it is not required that
each holder of an impaired claim or interest vote in favor of a plan of
reorganization in order for the Bankruptcy Court to confirm the plan of
reorganization, so long as the requisite majorities voting in a class accept the
plan. If an impaired class does not vote to accept the plan of reorganization,
the Bankruptcy Court may nonetheless confirm the plan, but only if at least one
impaired class (determined without including the acceptances of insiders) votes
to accept the plan and certain other statutory tests are satisfied. Many of
these tests are designed to protect the interests of creditors and equity
holders who do not vote or who vote against the plan of reorganization but who
will nonetheless be bound by the plan's provisions if confirmed. Under Section
1109(b) of the Bankruptcy Code, all parties in interest, including creditors and
equity security holders of the debtor will have the right to appear and be heard
on any issue in a Chapter 11 case.
B. ACCEPTANCE OF THE PLAN
Except as discussed below, as a condition to a consensual confirmation
process, Section 1129(a) of the Bankruptcy Code requires that (i) each impaired
class of claims or interests that receives or retains property under a plan of
reorganization votes to accept the plan of reorganization and (ii) the plan of
reorganization meets the other requirements of Section 1129(a). An impaired
Class of Claims will be deemed to have accepted the Plan if Holders of at least
two-thirds in dollar amount and a majority in number of the Holders of Claims in
such Class that cast timely Ballots vote to accept the Plan. An impaired Class
of Interests will be deemed to have accepted the Plan if Holders of at least
two-thirds in amount of the Interests in such Class that cast timely Ballots
vote to accept the Plan. Holders of Claims or Interests that fail to vote or
that abstain on the Plan are not counted for purposes of determining either
acceptance or rejection of the Plan by the impaired Class of Claims or Interests
of which they are a member.
If at least one impaired class of claims votes to accept a plan of
reorganization (not counting the votes of insiders), the plan of reorganization
may be confirmed despite rejection by the other impaired classes if the
"cramdown" provisions of Section 1129(b) of the Bankruptcy Code are satisfied.
The "cramdown" provisions of Section 1129(b) essentially provide that a plan of
reorganization may be confirmed over the rejection of an impaired class of
claims or interests if the plan of reorganization "does not discriminate
unfairly" and is "fair and equitable" with respect to such rejecting impaired
class. Further discussion of the provisions of Section 1129(b) is set forth
below.
The Plan has two classes of Claims that are Impaired and are entitled
to vote on the Plan. These are:
- Holders of Claims in Class 5 (Old Senior Subordinated Notes); and
- Holders of Claims in Class 6 (General Unsecured Claims)
Prior to the Petition Date, Holders of in excess of $200 million
principal amount of Old Senior Subordinated Notes agreed to support the Plan,
and the affirmative vote of the requisite majorities in Class 5 is a condition
to confirmation of the Plan. Since over two thirds in face amount have agreed to
the Plan treatment, it is anticipated (subject to the "numerosity" requirement
that more than one-half in number of those voting accept the Plan) that Class 5
will accept the Plan.
The rights and interests of Holders in Class 8 (Old Common Stock) and
Class 9 (Claims for Issuance of Old Common Stock) are impaired, and these
Classes are deemed to have rejected the Plan without solicitation of their
votes. Although Holders of Class 8 Old Common Stock Interests are entitled to
receive their PRO RATA share of 200,000 New Warrants under the Plan unless any
voting Class of Creditors rejects the Plan, the value of the New Warrants is
sufficiently minimal as of the Effective Date that the Debtors believe it is
appropriate to deem Class 8 to have rejected the Plan, and thus save the Estates
the burden and expense of soliciting votes. Nonetheless, as of February 28, 1999
over 52% of the outstanding shares of Old Common Stock were held by officers or
directors, franchisees and joint venture partners of PHI who are supportive of
the reorganization and several of whom are participating New Money Investors.
C. CLASSIFICATION OF CLAIMS AND INTERESTS
Section 1123 of the Bankruptcy Code provides that a plan of
reorganization shall designate Classes of a debtor's claims and interests, and
shall specify whether such Classes are not impaired, and the treatment of any
Classes that are impaired, and must provide the same treatment for each Claim or
Interest in a particular Class, unless a holder of such Claim or Interest agrees
to a less favorable treatment. The Plan divides the Claims and Interests into
Classes, designates each Class as Impaired or Unimpaired and sets forth the
treatment offered each Class. Section 101(4) of the Bankruptcy Code defines
"claim" as a right to payment, whether or not such right is "reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured" or a "right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, disputed, undisputed, secured or
unsecured."
Section 1122 of the Bankruptcy Code requires that each class of claims
and interests contain only claims or interests which are substantially similar
to each other. The Debtors believe that they have classified all Claims and
Interests in compliance with the provisions of Sections 1122 and 1123. It is
possible, however, that a Holder of a Claim or Interest may challenge the
Debtors' classification of Claims and Interests and that the Bankruptcy Court
may find that a different classification is required for the Plan to be
confirmed. In such event, it is the present intent of the Debtors, to the extent
permitted by the Bankruptcy Court, to modify the classifications in the Plan as
required by the Bankruptcy Court and to use the acceptances received in the
Solicitation for the purpose of obtaining the approval of the Class or Classes
of which the accepting Holder is ultimately deemed to be a member.
D. OPTIONAL PLAN PROVISIONS/SUBSTANTIVE CONSOLIDATION
Section 1123(b) of the Bankruptcy Code specifies provisions that a
plan may but need not contain, including any appropriate provision not
inconsistent with the applicable provisions of Title 11 of the Bankruptcy Code.
The Plan avails itself of certain such provisions which in the Debtors' view,
are in compliance with applicable standards of law. With respect to all
executory contracts and unexpired leases not previously assumed or rejected and
which have not terminated after the Petition Date by their own terms or by
operation of law, the Plan specifies the proposed treatment to be accorded to
those contracts. In addition, the confirmation, consummation and implementation
of the Plan is premised on the substantive consolidation of the Debtors' Chapter
11 Cases into a single case. Under the doctrine of substantive consolidation,
courts have the power, under certain circumstances, to treat the assets and
liabilities of related separate legal entities, including a parent and one or
more of its subsidiaries, as if the assets were held by, and the liabilities
were incurred by, a single entity. As part of the Confirmation, the Court will
need to find that consolidation, in the manner proposed, is fair to Creditors
and in the best interests of the Debtors' Estates. There are no prescribed
standards for substantive consolidation in the Bankruptcy Code. Instead, courts
have developed several standards in determining whether substantive
consolidation should be granted in any given case.
One such approach has been articulated as a balancing of the equities;
the court determines whether the necessity or benefit of consolidation
counterbalances or outweighs the harm to its objecting creditors if
consolidation is granted. SEE, E.G., EASTGROUP PROPERTIES SOUTHERN MOTEL ASSOC.,
LTD., 935 F.2d 245, 249 (11th Cir. 1991) ("Eastgroup Properties"). In
considering whether consolidation should be granted, some courts have employed
numerous factors in evaluating the propriety of substantive consolidation in the
case before it. SEE, E.G., EASTGROUP PROPERTIES, 935 F.2d 245; IN RE UNITED
STAIRS CORPORATION, 176 B.R. 359, 369 (Bankr. D.N.J. 1995); IN RE VECCO
CONSTRUCTION INDUSTRIES, INC., 4 B.R. 407, 410 (Bankr. E.D.Va. 1980). Courts
which utilize factors in their analysis often use one or more of the following
factors: (i) the presence or absence of consolidated financial statements; (ii)
the unity of interests and ownership between the various corporate entities;
(iii) the existence of parent and inter corporate guaranties on loans; (iv) the
degree of difficulty in segregating and ascertaining individual assets and
liabilities; (v) the existence of transfers of assets without formal observance
of corporate formalities; (vi) the commingling of assets and business functions;
and (vii) whether creditors dealt with the entities as a single economic unit.
In general, courts have not clearly articulated the weight to be accorded to
particular factors and have stated that each analysis is to be done on a case by
case basis.
The Debtors believe that substantive consolidation is necessary and
appropriate in these cases and will be granted by the Court. The substantial
identity of PHI and its Debtor Subsidiaries is evident; all of the Debtors'
operations are similar in nature, operating theme restaurants in which the
Debtors' world recognized brands and Celebrity Memorabilia are prominently
displayed. Many of the trade Creditors are the same for each Debtor entity. PHI,
its Debtor Subsidiaries and other affiliates have consistently filed
consolidated tax returns, and have prepared and made public only consolidated
financial statements. Further, PHI has guaranteed substantially all of the
leases executed by one or more of the Debtors. Moreover, as discussed in Section
IX, "Certain Risk Factors", a prompt exit from Chapter 11 is believed essential
to preserving the Debtors' customer base, Celebrity support and consequently,
the viability of the Debtors' core business operations. Consolidation of the
Debtors' Chapter 11 Cases for purposes of the Plan will avoid the significant
cost and inevitable delay attendant to performing a separate valuation of PHI
and each of its twenty-five Debtor Subsidiaries, and the task of attempting to
negotiate and prepare separate Chapter 11 Plans for each Debtor. As a
consequence, the absence of consolidation will not only significantly increase
the administrative costs of these Chapter 11 Cases, but may also seriously
threaten the Debtors' ability to achieve a successful reorganization. Confirming
the Plan as proposed should preserve value for the Debtors' Creditors that are
Impaired under the Plan.
E. CONFIRMATION OF THE PLAN
CONFIRMATION HEARING
Section 1128 of the Bankruptcy Code requires the Bankruptcy Court,
after notice, to hold a hearing on whether the Plan and its proponents have
fulfilled the confirmation requirements of Section 1129 of the Bankruptcy Code.
A hearing (the "Confirmation Hearing") to consider Confirmation of the Plan has
been scheduled for January 20, 2000 at 2:00 p.m. before the Honorable Joseph J.
Farnan, Jr., at the United States District Court for the District of Delaware,
J. Caleb Boggs Federal Building, 844 King Street, Wilmington, Delaware 19801.
The Confirmation Hearing may be adjourned from time to time by the Court without
further notice except for an announcement of the adjourned hearing date made in
open Court. Any objection to Confirmation must be made in writing and must
specify in detail the name and the address of the objector, all grounds for the
objection and the nature and amount of the Claim or Interest held by the
objector. Any such objection must be filed with the Clerk of the United States
Bankruptcy Court for the District of Delaware, Marine Midland Plaza, 824 Market
St., 5th Floor, Wilmington, Delaware 19801, and served upon the parties
designated in the notice of the Confirmation Hearing (the "Confirmation Notice")
so as to be actually received on or before January 14, 2000, at 4:00 p.m.
Eastern Time. Unless an objection to Confirmation is timely filed and served it
may not be considered by the Court.
THE PLAN MUST COMPLY WITH THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE
In order for the Plan to be confirmed, the Bankruptcy Code requires
that the Bankruptcy Court determine that the Plan complies with certain
requirements set forth in Section 1129(a) of the Bankruptcy Code. Section
1129(a) requires that:
(i) the Plan comply with all applicable provisions of the
Bankruptcy Code, including requirements as to the classification of
Claims and Interests, specification of the treatment of impaired and
unimpaired classes, provision of equal treatment within each class,
provision for adequate means of implementation, inclusion of required
charter provisions and provision for the selection of the officers and
directors;
(ii) the Debtors comply with all applicable provisions of the
Bankruptcy Code, including requirements for disclosure and
solicitation of acceptances;
(iii) the Plan be proposed in good faith;
(iv) all payments made by the Debtors for services and expenses
in or in connection with the Chapter 11 Cases or in connection with
the Plan and incident to the Chapter 11 Cases be subject to the
approval of the Bankruptcy Court as reasonable;
(v) all necessary information regarding directors, officers and
insiders be disclosed;
(vi) any rate change subject to the jurisdiction of any
governmental regulatory commission be approved or subject to approval
by such commission;
(vii) the Plan satisfies the "Best Interests Test" of Section
1129(a)(7) of the Bankruptcy Code, which requires that with respect to
each Impaired Class, each Holder of a Claim or Interest either (a)
accepts the Plan or (b) receives at least as much pursuant to the Plan
as such Holder would receive in a liquidation of the Debtors under
Chapter 7 of the Bankruptcy Code;
(viii) the Plan be accepted by each Impaired Class and, in any
case, that at least one Impaired Class of Claims accept the Plan
(without considering votes by insiders);
(ix) the Plan provides for payment in full of all Allowed
Administrative and Priority Claims in the manner set forth in the
Bankruptcy Code;
(x) the Plan satisfies the "Feasibility Test" of Section
1129(a)(11) of the Bankruptcy Code, that is, that there is a
reasonable probability that the Debtors will be able to perform their
obligations under the Plan and continue to operate their businesses
without liquidation or further financial reorganization;
(xi) all statutory fees of the United States Trustee under 28
U.S.C.ss. 1930 are to be paid by the Debtors; and
(xii) the Plan provides for continued payment of all retiree
benefits, if any.
The Debtors believe that the Plan will meet all such tests. However,
it is possible that one or more Impaired Classes may reject the Plan. In
addition, Classes 8 and 9 are deemed to have rejected the Plan. Accordingly, the
Debtors may seek confirmation of the Plan under the "cramdown" procedures of
Section 1129(b) of the Bankruptcy Code, which permit the confirmation of a plan
of reorganization over the objection of one or more classes if certain
additional tests are met. Although the Debtors believe that the Plan will meet
such tests, there can be no assurance that the Bankruptcy Court will reach the
same conclusion.
FEASIBILITY TEST. Under the Feasibility Test as set forth in Section
1129(a)(11) of the Bankruptcy Code, in order to confirm the Plan, the Bankruptcy
Court must find that confirmation of the Plan is not likely to be followed by
liquidation or the need for further financial reorganization of the Debtors. For
the Plan to meet the Feasibility Test, the Bankruptcy Court must determine that
the Reorganized Debtors have a reasonable probability ("more likely than not")
of performing their obligations under the Plan, including performing their
obligations under the debt instruments issued under the Plan. For purposes of
determining whether the Plan meets this requirement, the Debtors with their
financial advisors have prepared the Projections, which together with the
material assumptions on which they are based, are set forth in Section VI. F.,
"Emergence Business Plan". Based upon the Projections, the Debtors believe that
the Debtors' reorganization under the Plan will meet the feasibility
requirements of Section 1129(a) of the Bankruptcy Code.
BEST INTERESTS TEST. In order to confirm the Plan if any member of an
Impaired Class votes to reject the Plan, the Bankruptcy Court must independently
determine that the Best Interests Test under Section 1129(a)(7) of the
Bankruptcy Code is satisfied with respect to each member of an Impaired Class.
The Best Interests Test requires that each member of an Impaired Class of Claims
or Interests either (i) accept the Plan or (ii) receive under the Plan property
of a value not less than the value of the distribution that such non-accepting
member would receive if the Debtors were liquidated under Chapter 7 of the
Bankruptcy Code. Management believes that recoveries under the Plan are equal to
or better than those in a liquidation under Chapter 7, and that the Plan
therefore satisfies the Best Interests Test. See Section VII.F. below,
"Liquidation Analysis" for an analysis of projected recoveries to Creditors in a
hypothetical liquidation of the Debtors in a Chapter 7 Case under the Bankruptcy
Code.
CRAMDOWN REQUIREMENTS
The Bankruptcy Code provides for Confirmation of the Plan even if it
is not accepted by all Impaired Classes, as long as at least one Impaired Class
of Claims has accepted it (without counting the acceptances of insiders). These
so-called "cramdown" provisions are set forth in Section 1129(b) of the
Bankruptcy Code. The Plan may be confirmed under the cramdown provisions if, in
addition to satisfying the other requirements of Section 1129 of the Bankruptcy
Code, it (i) is "fair and equitable" and (ii) "does not discriminate unfairly"
with respect to each Class of Claims or Interests that is impaired under, and
has not accepted, such Plan.
THE PLAN MUST BE FAIR AND EQUITABLE. With respect to a dissenting
Class of unsecured creditors, the "fair and equitable" standard requires, among
other things, that the Plan contain one of two elements. It must provide either
that each unsecured Creditor in the Class receives or retains property having a
value, as of the Effective Date, equal to the Allowed amount of its Claim, or
that no Holder of Allowed Claims or Interests in any junior Class may receive or
retain any property on account of such Claims or Interests. With respect to a
dissenting Class of Interests the "fair and equitable" standard requires that
the Plan contain one of two elements. It must provide either (i) that each
Holder of an Interest in the Class receive or retain property having a value, as
of the Effective Date, equal to the greater of the Allowed amount of any fixed
liquidation preference to which such Holder is entitled, or the value of such
Interests or (ii) that no Holder of an Interest in any junior Class may receive
or retain any property on account of such Interests. The strict requirement as
to the allocation of full value to dissenting Classes before junior Classes can
receive a distribution is known as the "absolute priority rule."
The Debtors believe that the Plan meets the requirements of the
absolute priority rule. In the event that either Class 5 or Class 6 rejects the
Plan, the Plan provides that the Holders of Class 8 Interests will not receive
any consideration. As a result, no Classes junior to Class 5 and Class 6 will
receive or retain any property under the Plan on account of their Claims or
Interests if Classes 5 or 6 reject the Plan. The Plan also meets the absolute
priority requirements in respect of Classes 8 and 9, which Interests are deemed
to reject the Plan, as no Class junior to such Classes is receiving or retaining
any property on account of its Claim or Interest under the Plan.
The "fair and equitable" standard has also been interpreted to
prohibit any class senior to a dissenting class from receiving under a plan more
than one hundred percent of its Allowed Claims. The Plan complies with that
requirement with respect to all Holders of Claims and Interests.
THE PLAN MUST NOT DISCRIMINATE UNFAIRLY. As a further condition to
approving a cramdown, the Court must find that the Plan does not "discriminate
unfairly" in its treatment of dissenting Classes. A plan of reorganization does
not "discriminate unfairly" if (a) the plan does not treat any dissenting
impaired class of claims or interests in a manner that is materially less
favorable than the treatment afforded to another class with similar legal claims
against or interests in the debtor and (b) no class receives payments in excess
of that which it is legally entitled to receive for its claims or interests. The
Debtors believe that the Plan does not discriminate unfairly as to any Impaired
Class of Claims or Interests. Under the Plan, Classes 5 and 6 are receiving
comparable treatment: a distribution valued at approximately 40% of the Allowed
amount of each such Claim.
Class 5 Claims are expected to accept the Plan as it embodies the
restructuring agreement negotiated by the Debtors and the Holders of over
two-thirds in amount of those Claims. If Class 6 (General Unsecured Claims)
votes to reject the Plan, the Debtors intend to seek to confirm the Plan
pursuant to the cramdown provisions, and, if the Court were to determine it to
be necessary, modify the Plan in order to comply with such cramdown
requirements.
F. LIQUIDATION ANALYSIS
INTRODUCTION
The hypothetical liquidation scenario set forth in this report is based upon the
orderly Chapter 7 liquidation of the Company, including Debtor and non-Debtor
Subsidiaries. This report projects a low and high recovery range based upon the
estimated December 31, 1999 Balance Sheet and has been prepared on a
consolidated basis.
Nothing contained within this Hypothetical Liquidation Analysis is, or should be
relied upon as, a promise or representation of the future. There are no
representations, warranties or other assurances that any of the projected
results will be realized. Because the projected financial information is based
upon estimates and assumptions about circumstances and events that have not yet
taken place and are subject to variations, actual results will differ and may
significantly vary from projected results which could impact recoveries
materially.
SIGNIFICANT OVERALL ASSUMPTIONS
All legal entities (including those that did not file Chapter 11 on October 12,
1999) would be liquidated. All the legal entities are assumed to be
substantively consolidated.
No assumptions (recoveries or claims) have been made with respect to contingent
claims (e.g. lawsuits) or unrecorded claims that may ultimately be deemed valid
after all claims are reconciled. In addition, no adjustment in creditor
recoveries has been made for any potential preference, fraudulent conveyance or
other avoidance action that the Company may be capable of asserting.
The liquidation is assumed to be performed over a six to ten month period. Cash
proceeds are assumed to be invested and distributed at a later date.
All units would be closed immediately after the Company's announcement of
liquidation.
All Holders of Allowed General Unsecured Claims are treated pari passu with the
Holders of Old Senior Subordinated Notes Claims.
<PAGE>
<TABLE>
<CAPTION>
PLANET HOLLYWOOD INTERNATIONAL INC.
HYPOTHETICAL LIQUIDATION ANALYSIS
AS OF DECEMBER 31, 1999
(in thousands)
--------------- ------------------------- ---------------------------
Estimated Net
Book Value as Estimated Recovery % Estimated Recovery $
of 12/31/99 Low High Low High
--------------- --------- --------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Cash $ 14,444 100% 100% $ 14,444 $ 14,444
Restricted Cash 6,355 25% 33% 1,600 2,100
Accounts Receivable 12,748 26% 35% 3,377 4,493
Inventory 15,911 25% 40% 3,967 6,368
Prepaid Expenses 8,855 3% 6% 264 528
Property, Plant and Equipment 185,889 19% 23% 35,430 42,835
Goodwill 13,433 0% 0% - -
Other Assets 15,847 0% 0% - -
Investment 18,096 58% 79% 10,410 14,265
------ ------ ------ ----------- --------
TOTAL ASSETS $ 291,577 24% 29% 69,492 85,033
=========
Less: Secured Claims 2,000 2,000
Less:
Administrative/Priority Expenses
<S> <C> <C>
Wind Down Costs 3,000 1,800
Trustee Fees 2,085 2,551
Severance 1,800 1,200
Professional Fees 4,000 3,500
Reclamation Claims 600 600
Priority Tax 400 400
Post Petition Accounts Payable 3,369 3,369
Post Petition Taxes Payable 2,013 2,013
Post Petition Accrued Liabilities 15,289 15,289
------ ------
Total Administrative and Priority Expenses 32,556 30,722
Total Proceeds Available to Unsecured Creditors $ 34,936 $ 52,311
======== ========
Unsecured Claims
Senior Subordinated Notes & Accrued Interest $ 282,000 $282,000
Accounts Payable 11,955 11,955
Other Short Term Debt 5,453 5,453
Lease Rejection Claims 62,000 62,000
---------- --------
Total Unsecured Claims $ 361,408 $361,408
========= ========
ESTIMATED RECOVERY FOR UNSECURED CLAIMS
ASSUMING A LIQUIDATION 10% 14%
=== ===
---------------------------
RECOVERY %
ESTIMATED RECOVERY FOR UNSECURED CLAIMS UNDER THE PLAN PAR ESTIMATED
VALUE FMV
----------- ---------------
Class 1 Claims - Priority 100.0% 100.0%
Class 2 Claims - SunTrust 100.0% 100.0%
Class 3 Claims - Miscellaneous Secured 100.0% 100.0%
Class 4 Claims - Convenience 100.0% 100.0%
Class 5 Claims - Senior Subordinated 42.1% 40.4%
Notes
Class 6 Claims - General Unsecured 42.1% 40.4%
Class 7 Claims - Landlord Settlement 100.0% 100.0%
Class 8 Claims - Interests of Holders of 0.0% 0.0%
Old Common Stock
Class 9 Claims - Issuance of Old 0.0% 0.0%
Common Stock
Class 10 Claims - Intercompany 100.0% 100.0%
Class 11 Claims - Intercompany Interest 100.0% 100.0%
</TABLE>
NOTES - THE FOLLOWING NOTES DESCRIBE THE SIGNIFICANT ASSUMPTIONS THAT ARE
REFLECTED IN THE LIQUIDATION ANALYSIS.
NOTE 1 - CASH: The Company's cash balance represents the estimated cash balance
as of December 31, 1999. It is assumed that the Cash balance, excluding the
restricted Cash, is available for distribution to Creditors.
NOTE 2 - RESTRICTED CASH: The restricted cash balance of approximately $6.4
million is pledged against letters of credit and secures the payroll account.
The Company believes that approximately $700 thousand to $1.2 million could be
recovered from the approximate $5.5 million that has been pledged against the
letters of credit. The approximate $900 thousand of collateral for the payroll
account is assumed to be fully recoverable in a liquidation scenario.
NOTE 3 - ACCOUNTS RECEIVABLE: The outstanding Accounts Receivable balance is
primarily comprised of receivables due from franchisees, credit cards, vouchers
and house accounts.
Franchisee Receivables constitute amounts owed by franchisees for initial
franchise fees and for royalties based on gross revenues from food, beverage,
bar and merchandise. The Company does not believe that it will be able to
recover these receivables in a liquidation scenario.
Historically, the Company collected Credit Card Receivables in 2-7 days and had
negligible chargebacks on these receivables. Management believes that the
Company would recover approximately 90% of the receivables in the low scenario
and approximately 95% in the high scenario.
Voucher Receivables relate to vouchers issued by travel agencies to their
clients, which are subsequently redeemed at the Company's units. Upon receipt,
the Company submits the voucher to the respective travel agent for payment.
Historically, such receivables are paid within 60 to 90 days and have an
uncollectable rate of approximately 10%. Under a liquidation scenario,
management believes that a recovery between 25% and 50% could be achieved with
respect to these receivables.
House Account Receivables primarily relate to corporate functions. Historically,
these receivables have an uncollectable rate of approximately 10% and are
usually collected in 60 to 90 days. Management believes that a recovery rate of
15% to 25% could be achieved, given that a significant portion of these
receivables are foreign.
Other Receivables are composed of a loan to a celebrity, which is collateralized
by real estate and miscellaneous other receivables. The Company estimates that
the recovery on these receivables would be from 25% to 50% of book value in
liquidation.
NOTE 4 - INVENTORY: Inventory is composed of food, beverage, bar and merchandise
inventory. It is assumed that merchandise inventory would be sold to a
liquidator and the recovery would be between approximately 25% and 40% of net
book value. The food, beverage and bar inventory has been ascribed no value upon
liquidation.
NOTE 5 - PREPAID EXPENSES: Prepaid expenses consist primarily of prepaid rent,
smallwares, and deposits. The recovery rate on prepaid expenses is assumed to
fall between 3% and 6%.
NOTE 6 - PROPERTY, PLANT & EQUIPMENT: Property, plant & equipment (net) are
comprised of leasehold improvements, equipment and fixtures, construction work
in process and Memorabilia.
Leasehold improvements are not separable from their respective leased buildings
and, therefore, are estimated to have no recoverable value upon liquidation.
Planet Hollywood has numerous leases associated with its restaurants, warehouses
and offices. A leasehold interest may have value if the contract rent is lower
than the current market rent. Management does not believe that any of the
Company's leases have a contract rent that is significantly below market.
Recoveries on store-level equipment and fixtures are assumed to be approximately
10%-15% of net book value.
Management estimates the recovery of Memorabilia to be between 60% and 70% of
book value. The Memorabilia cases and installation are believed to have no
recovery in liquidation.
Construction work in process is primarily associated with the 1567 Broadway
project and Planet Movies. The Company believes that the condominium portion of
its 1567 Broadway interests could be sold for approximately $30.0 to $35.0
million. In liquidation, a 30% liquidation discount on these proceeds is assumed
to reflect the estimated effect of liquidating these properties in a relatively
short period of time. Commissions and other costs associated with selling the
asset are assumed to be 7% of proceeds. Potential recoveries on the Planet
Hollywood Hotel and Planet Movies are discussed in Note 9.
NOTE 7 - GOODWILL: Goodwill relates to past acquisitions and has been ascribed
no value in a liquidation.
NOTE 8 - OTHER ASSETS: Other Assets primarily includes trademarks, software
development costs, loan origination costs, merger-related costs and other
non-current assets. The Company believes that there is no value to these assets
in a liquidation.
NOTE 9 - INVESTMENTS: The Company owns a 50% equity interest in Planet Hollywood
Asia, which operates and franchises PLANET HOLLYWOOD units in the Pacific Rim.
Planet Hollywood Asia has been operating at a significant loss and, as a result,
no recovery is estimated in liquidation.
Additionally, the Company owns a 20% equity interest in ECE, a publicly traded
Mexican company, which operates themed restaurants/retail units in Mexico, South
America and the Caribbean. Based upon recent market prices, PHI's interest in
ECE has a value of approximately $6.5 million. Recoveries in liquidation,
however, are estimated at $3.9 million to $4.5 million, due to the impact that
such a large stock sale would have on ECE's share price.
The Company also owns a 20% equity interest in the Planet Hollywood Hotel
portion of the 1567 Broadway project, a themed hotel under development in New
York City. The Company believes that its portion of the 1567 Broadway project,
would provide between $10.0 million and $15.0 million in proceeds. A 30%
liquidation discount on these proceeds is assumed. Commissions and other costs
associated with selling the asset are assumed to be 7% of proceeds.
The Company is unable to transfer its ownership in Planet Movies. As a result,
no recovery on this investment is assumed in a liquidation scenario.
NOTE 10 - SECURED CLAIMS: Secured Claims relate to approximately $2.0 million of
merchandise inventory received from secured vendors.
NOTE 11 - ADMINISTRATIVE/PRIORITY: It is assumed that administrative and
priority expenses are comprised of wind down costs associated with liquidating
the Company's assets over a six to ten month period, trustee fees, severance,
professional fees, reclamation Claims and post-petition accounts payable and
accrued liabilities. It is assumed that the wind down costs would average
approximately $300 thousand per month for the duration of the wind down. It is
assumed that the cost associated with a trustee overseeing the liquidation would
approximate 3% of receipts.
It is assumed that upon termination, individuals employed for more than one year
will receive two weeks of severance, and individuals employed for less than one
year will receive one week of severance. The Debtors estimate that their weekly
payroll for corporate employees and those employees at units remaining open at
the time of the filing is approximately $900 thousand per week and that total
severance would be approximately $1.2 million to $1.8 million.
Professional fees represent the costs of attorneys, accountants, appraisers and
other professionals from the Petition Date through the liquidation.
Approximately $2.0 million of fees relate to services provided prior to December
31, 1999 and the remainder relates to services to be provided to effectuate the
wind down and maximize recovery.
Reclamation Claims represent claims from vendors of approximately $600 thousand
for inventory that the Company received within the ten day period after the
inventory was received prior to the Petition Date.
Priority Tax Claims are estimated to be approximately $400 thousand as of
December 31, 1999.
Post-petition accounts payable, taxes and accrued liabilities relate to
liabilities incurred by the Debtors and the Company's non-Debtor affiliates
subsequent to the Petition Date.
NOTE 12 - ALLOWED UNSECURED CLAIMS: The Company's estimate of Allowed Unsecured
Claims is $361.4 million and primarily consists of the Old Senior Subordinated
Notes Claims, Trade Claims and Rejection Claims. It is assumed in this
hypothetical liquidation analysis that the Company would reject all store
leases. The impact of any contingent Claims has been excluded from this
analysis.
NOTE 13 - Estimated recovery to Class 5 Claims and Class 6 Claims under the Plan
assumes a 12-15% yield on the New Secured PIK Notes, and an equity value of
$4.79 per share based on the price per share paid by the New Money Investors.
SUMMARY
In a chapter 7 liquidation scenario, the asset recovery value ranges
from approximately 24% of the net book value of assets in the low scenario to
approximately 29% in the high scenario. These ranges would provide a recovery to
Unsecured Creditors of approximately 10% to 14%, substantially below the
projected recoveries under the Plan.
G. VOTING PROCEDURES
VOTING REQUIREMENTS - GENERALLY
Pursuant to the Bankruptcy Code, only Holders of Claims against or
Interests in the Debtors that are Allowed pursuant to Section 502 of the
Bankruptcy Code and that are impaired under the terms and provisions of the Plan
are entitled to vote to accept or reject the Plan. Pursuant to the Bankruptcy
Code, a class of claims or interests is "impaired" if the legal, equitable, or
contractual rights attaching to the claims or interests of that class are
altered. Each Holder of an Old Senior Subordinated Note Claim in Class 5, and
each Holder of a General Unsecured Claim in Class 6, as of the Voting Record
Date of December 6, 1999 established by the Court are entitled to vote to accept
or reject the Plan. The Debtors propose that for voting purposes each Holder of
a Class 5 Claim shall be entitled to vote its Claim in the outstanding principal
amount. General Unsecured Claims entitled to vote may vote in the liquidated,
undisputed amount of such Claims. Claims which are not liquidated in amount or
are objected to prior to the Voting Deadline may not vote, or if they have
voted, such vote will not be counted, unless a voting amount is established by
the Court.
Classes of Claims and Interests that are not impaired are not entitled
to vote on the Plan, are presumed to have accepted the Plan and will not receive
a Ballot. As set forth above, Claims in Classes 1, 2, 3, 4, 7 and 10 and
Interests in Class 11 are not impaired, and such Classes are not entitled to
vote on the Plan and are presumed to have accepted the Plan pursuant to Section
1126(f) of the Bankruptcy Code. Holders of Claims in Class 9 (Claims for
Issuance of Old Common Stock) and Holders of Interests in Class 8 (Old Common
Stock), are Impaired under the Plan, and are deemed to have rejected the Plan
and will not receive Ballots for voting. The classification of Claims and
Interests and their designation as Impaired or not Impaired is summarized above
in Sections VII. C. "Classification of Claims and Interests".
BALLOTING AGENT
Donlin Recano & Company, Inc. will act as Balloting Agent in
connection with the solicitation. All deliveries, correspondence and questions
should be directed to the Balloting Agent at the following address or telephone
number (i) if by mail: Planet Hollywood International, Inc., ET AL., c/o Donlin,
Recano & Company, -- -- Inc., P.O. Box 2089, Murray Hill Station, New York, New
York 10156-0701; (ii) if by hand: Planet Hollywood International, Inc., ET AL.,
c/o Donlin, Recano & Company, Inc., 419 Park Avenue South, Suite 1206, New York,
NY -- -- 10016; and (iii) if by telephone: (212) 481-1411. The Balloting Agent
will provide Holders of Claims and Interests with information regarding the
solicitation, assist Holders in obtaining copies of this Disclosure Statement
and Ballots, to the extent applicable, and respond to questions with respect to
any of the foregoing.
VOTING PROCEDURES - GENERALLY
Consistent with the provisions of Bankruptcy Rule 3018, the Court has
fixed the close of business on December 6, 1999 as the record date for
determining the Holders of Claims who are entitled to receive a copy of this
Disclosure Statement and to vote to accept or reject the Plan (the "Voting
Record Date"). Entities that acquire Claims after the Voting Record Date will
not be entitled to vote on the Plan.
A Ballot, or in some cases, a Master Ballot, for voting to accept or
reject the Plan is enclosed with each copy of the Disclosure Statement. IF YOU
HAVE A CLAIM OR INTEREST THAT IS IMPAIRED UNDER THE PLAN AND YOU ARE ENTITLED TO
VOTE AND YOU DID NOT RECEIVE A BALLOT, RECEIVED A DAMAGED BALLOT, OR LOST YOUR
BALLOT, PLEASE CONTACT DONLIN RECANO & COMPANY, INC., THE BALLOTING AGENT, AT
(212) 481-1411. IF YOU HOLD CLAIMS IN MORE THAN ONE CLASS, YOU MAY RECEIVE MORE
THAN ONE BALLOT. YOU SHOULD COMPLETE AND SIGN AND RETURN EACH BALLOT YOU
RECEIVE.
Under the Bankruptcy Code, for purposes of determining whether the
requisite acceptances have been received, ONLY THOSE HOLDERS THAT VOTE TO ACCEPT
OR REJECT THE PLAN WILL BE COUNTED. VOTES CANNOT BE TRANSMITTED ORALLY OR BY
FACSIMILE TRANSMISSION. Accordingly it is important that you return your signed
and properly completed Ballot(s) promptly. PLEASE FOLLOW THE INSTRUCTIONS
CONTAINED ON THE BALLOT CAREFULLY. To accept the Plan, the Holder must check the
box entitled "accept the Plan" on the appropriate Ballot. Any Ballot cast that
does not indicate whether the Holder of the Claim is voting to accept or reject
the Plan or indicates that the Holder both accepts and rejects the Plan will NOT
be counted as either an acceptance or rejection of the Plan. Any Ballot that
does not indicate a vote to accept or reject the Plan will not be counted at
all. You must sign your Ballot. Failure by any Holder to send a duly executed
Ballot with an original signature will be deemed an abstention by such holder
with respect to a vote on the Plan and will not be counted as a vote for or
against the Plan. A vote may be disregarded if the Court determines, after
notice and a hearing, that such acceptance or rejection was not solicited or
procured in good faith or in accordance with the provisions of the Bankruptcy
Code or if a Claim was voted in bad faith.
VOTING PROCEDURES - CLASS 5 (OLD SENIOR SUBORDINATED NOTES) CLAIMS
Copies of this Disclosure Statement and appropriate Ballots and Master
Ballots have been sent to all registered Holders of Class 5 Claims as of the
Voting Record Date, including brokerage firms, commercial banks, trust
companies, or other nominees ("Nominees"). If such Nominees do not hold for
their own account, they must provide copies of this Disclosure Statement and
appropriate Ballots to their customers and to Holders of such Claims who are the
beneficial owners of such Claims. ANY BENEFICIAL OWNER WHO DOES NOT RECEIVE A
COPY OF THIS DISCLOSURE STATEMENT AND A BALLOT SHOULD CONTACT ITS APPROPRIATE
NOMINEE OR THE BALLOTING AGENT.
Any beneficial owner holding Old Senior Subordinated Notes in "street
name" can vote only by following these instructions:
a. fill out the appropriate account and other information on the
Ballot;
b. sign the Ballot unless already signed by the Nominee; and
c. return the completed Ballot to the Nominee in the self-addressed,
stamped envelope enclosed with the Ballot, in sufficient time to enable such
Nominee to include your vote on the Master Ballot which itself must be actually
received by the Balloting Agent by the Voting Deadline to be counted. If no
envelope was enclosed, contact the Balloting Agent or your Nominee for
instructions.
The Nominee will be responsible for completing a Master Ballot
reflecting its vote and the votes of other beneficial owners for which the
Nominee acts as nominee, and for delivering the Master Ballot in a timely manner
(i.e. prior to the Voting Deadline) to the Balloting Agent. Any Ballot submitted
to an Nominee will not be counted unless such Nominee timely delivers the Ballot
to the Balloting Agent.
Any beneficial owner which is also the record holder of the Old Senior
Subordinated Notes will receive from the Balloting Agent a copy of this
Disclosure Statement and an appropriate Ballot to be properly filled out and
signed. Such beneficial owners should return the completed Ballot directly to
the Balloting Agent prior to the Voting Deadline, in order for such vote to
count.
UNITED STATES TRUST COMPANY OF NEW YORK, THE OLD INDENTURE TRUSTEE FOR
THE OLD SENIOR SUBORDINATED NOTES, WILL NOT VOTE ON BEHALF OF THE HOLDERS OF OLD
SENIOR SUBORDINATED NOTES CLAIMS. ACCORDINGLY, EACH HOLDER OF OLD SENIOR
SUBORDINATED NOTES CLAIMS MUST SUBMIT ITS OWN BALLOT. DO NOT RETURN THE
CERTIFICATES REPRESENTING YOUR CLAIMS WITH YOUR BALLOTS.
Each Holder of an Old Senior Subordinated Notes Claim may elect in
writing, at the appropriate place on the Ballot, to participate Pro Rata in the
distribution, if any, of up to $25 million of New Senior Secured Notes, $625,000
Cash and 350,000 shares of New Class A Common Stock as provided for by the Plan.
Only Holders of Class 5 Claims that make such election on a validly executed
ballot and whose election is included in a Master Ballot timely delivered to the
Balloting Agent may be treated as an Electing Holder of Class 5 Claims.
VOTING PROCEDURES - CLASS 6 (GENERAL UNSECURED) CLAIMS
General Unsecured Claims entitled to vote may vote in the liquidated,
undisputed amount of such Claims. Claims which are not liquidated in amount or
are disputed may not vote unless a voting amount is established by the Court.
In most cases, the Ballot enclosed with this Disclosure Statement is
printed with the amount of your Claim for voting purposes. Such amount is based
either on your proof of claim, the Debtors' Schedules of Liabilities or an order
of the Court. If your Claim is or may become a Disputed Claim this amount may
not be the amount ultimately Allowed for purposes of distribution in the Class
in which your Claim has been classified. All votes to accept or reject the Plan
must be cast by using the Ballot enclosed with this Disclosure Statement, or by
obtaining a duplicate Ballot from the Balloting Agent.
CONVENIENCE CLASS ELECTION BY GENERAL UNSECURED CREDITORS
Each Holder of a General Unsecured Claim in excess of $2,000 may
elect, in writing, at the appropriate place on the Ballot, to voluntarily reduce
its Claim to $2,000. All Holders of Class 6 Claims that make such election on a
validly executed and timely delivered Ballot will receive the treatment accorded
to the Holders of Convenience Claims (Class 4) under the Plan (payment in Cash,
in full of the lesser of the Allowed Claim amount or $2,000).
VOTING DEADLINE
IN ORDER TO BE COUNTED, BALLOTS AND MASTER BALLOTS MUST BE SIGNED AND
RETURNED SO THAT THEY ARE RECEIVED BY THE BALLOTING AGENT NO LATER THAN 5:00
P.M. EASTERN TIME ON JANUARY 14, 2000 (THE "VOTING DEADLINE"). ANY BALLOT OR
MASTER BALLOT RECEIVED AFTER THE VOTING DEADLINE WILL NOT BE COUNTED. IT IS OF
THE UTMOST IMPORTANCE TO THE DEBTORS THAT YOU VOTE PROMPTLY TO ACCEPT THE PLAN.
<PAGE>
VIII. DESCRIPTION OF THE PLAN
THE FOLLOWING IS A SUMMARY OF CERTAIN SIGNIFICANT PROVISIONS OF THE
PLAN. THIS SUMMARY IS FOR DESCRIPTIVE PURPOSES ONLY, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION SET FORTH IN THE PLAN,
WHICH IS ATTACHED TO THIS DISCLOSURE STATEMENT AS EXHIBIT 1. TO THE EXTENT THAT
THE TERMS OF THIS DISCLOSURE STATEMENT VARY FROM THE TERMS OF THE PLAN, THE
TERMS OF THE PLAN SHALL BE CONTROLLING.
A. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN
Set forth below is the classification of Claims and Interest and the
treatment of such Claims and Interests under the Plan. The Plan contains 11
Classes of Claims and Equity Interests. In accordance with the Bankruptcy Code,
Administrative and Priority Tax Claims are not classified for purposes of voting
on or receiving distributions under the Plan, but must be paid in full or as
otherwise agreed by the parties. A Claim or Interest is part of a particular
Class only to the extent that such Claim or Interest qualifies within the
description of that Class, and such Claim or Interest shall be part of a
different Class to the extent that any remainder of the Claim or Interest
qualifies within the description of such other Class or Classes. The Debtors
believe they have classified the Claims and Interests in the Plan in accordance
with Section 1123(a)(1) of the Bankruptcy Code.
1. UNCLASSIFIED CLAIMS - ADMINISTRATIVE AND PRIORITY TAX CLAIMS
ADMINISTRATIVE CLAIMS. Administrative Claims are those Claims entitled
to priority in payment pursuant to Sections 503, 507(a)(1) or 507(b) of the
Bankruptcy Code and include all amounts required to be paid in connection with
reclamation claims and the assumption of executory contracts and unexpired
leases. Priority Tax Claims are those tax Claims of governmental units entitled
to priority under Section 507(a)(8) of the Bankruptcy Code. Holders of Priority
Tax Claims shall not be required to file Proofs of Claim.
ORDINARY COURSE LIABILITIES. Holders of Administrative Claims based on
liabilities incurred in the ordinary course of the Debtors' business shall not
be required to File any request for payment of such Claims. Such Administrative
Claims shall be assumed and paid by Reorganized PHI pursuant to the terms and
conditions of the particular transactions giving rise to such Administrative
Claims without any further action by the Holders of such Claims or the need for
Bankruptcy Court approval.
ADMINISTRATIVE RECLAMATION CLAIMS. Holders of Allowed Administrative
Reclamation Claims shall be paid in full, in Cash, on the later of the Effective
Date, the date of allowance of their Reclamation Claims, or such other date as
shall be approved by an order of the Court. Administrative Reclamation Claims
are those reclamation Claims that are entitled to Administrative Expense status
pursuant to an order of the Bankruptcy Court entered under 11 U.S.C. ss. 546(c).
Administrative Reclamation Claims are expected to total approximately $600,000.
CURE COST CLAIMS. Claims relating to cure costs in connection with
contracts or leases assumed by the Debtors under 11 U.S.C. ss. 365 are entitled
to Administrative Expense status. Such Claims shall be paid on the later of the
Effective Date, the date of Allowance of a cure cost Claim, or such other date
as shall be approved by order of the Bankruptcy Court. Cure cost Claims are
expected to total approximately $1.45 million.
FEES OF PROFESSIONALS AND CLAIMS FOR SUBSTANTIAL CONTRIBUTION. All
Professionals retained by any Debtor and any other Entities (other than any
Professionals retained by the Old Indenture Trustee, which Professionals shall
be paid in accordance with Section 6.4 of the Plan) requesting compensation or
reimbursement of expenses pursuant to Sections 327, 328, 330, 331, or 503(b) of
the Bankruptcy Code for services rendered before the Confirmation Date
(including, without limitation, any compensation requested by any Professional
or any other Entity for making a substantial contribution in the Chapter 11
Cases), shall File and serve on Reorganized PHI, the Creditors' Committee and
the United States Trustee an application for final allowance of compensation and
reimbursement of expenses no later than thirty (30) days after the Effective
Date. Objections to applications of Professionals for compensation or
reimbursement of expenses must be Filed and served on Reorganized PHI, the
United States Trustee, the Creditors' Committee and the Professionals to whose
application the objections are addressed, no later than fifteen (15) days after
service of the related application. Reorganized PHI shall pay the amounts
Allowed by Final Order of the Bankruptcy Court within ten (10) days after the
date of such Order.
PRIORITY TAX CLAIMS. Unless otherwise agreed between the Holder of a
Priority Tax Claim and any Debtor or Reorganized PHI, in accordance with Section
1129(a)(9)(C) of the Bankruptcy Code, each Holder of an Allowed Priority Tax
Claim shall receive, at such Debtor's or Reorganized PHI's option, as the case
may be, either (i) Cash, in the full amount of such Allowed Priority Tax Claim
on the Effective Date or (ii) deferred payments of Cash in the full amount of
such Allowed Priority Tax Claim, payable in equal annual principal installments
beginning the first anniversary of the Effective Date and ending on the earlier
of the sixth anniversary of the Effective Date or the sixth anniversary of the
date of the assessment of such Claim, together with interest (payable quarterly
in arrears) on the unpaid balance of such Allowed Priority Tax Claim at an
annual rate equal to the Treasury Rate or such other rate as may be set by the
Bankruptcy Court at the Confirmation Hearing. The amount of any Allowed Priority
Tax Claim for which the time for filing a return, if required, under applicable
law or under any authorized extension thereof, has not expired on or prior to
the Effective Date, and the rights of the Holder of such Claim, if any, to
payment in respect thereof shall (i) be determined in the manner in which the
amount of such Claim and the rights of the Holder of such Claim would have been
resolved or adjudicated if the Chapter 11 Cases had not been commenced,
PROVIDED, HOWEVER, that the Debtors reserve the right to seek a determination of
the amount of or liability for any Priority Tax Claim under 11 U.S.C. ss. 505;
(ii) survive the Effective Date and consummation of the Plan as if the Chapter
11 Cases had not been commenced, and (iii) not be discharged pursuant to Section
1141 of the Bankruptcy Code.
2. CLASSIFIED CLAIMS AND INTERESTS
CLASS 1. PRIORITY CLAIMS.
Class 1 consists of all Priority Claims, which are defined in the Plan
as any Allowed Claim, to the extent entitled to priority under Section 507 (a)
of the Bankruptcy Code, other than an Administrative Claim or a Priority Tax
Claim, against any Debtor. The Debtors do not believe that there are any unpaid
Holders of Allowed Priority Claims, due to the entry of First-Day Orders
authorizing payment of Priority Claims.
To the extent that there are any Holders of an Allowed Priority Claim,
each Holder of an Allowed Priority Claim shall be entitled to receive, in full
satisfaction of such Claim, the Allowed amount of such Claim in full in Cash on
the later of (i) the Effective Date; (ii) the date that such Claim becomes an
Allowed Priority Claim; and (iii) the date that such Claim would be paid in
accordance with any terms and conditions of any agreements or understandings
relating thereto between any Debtor and the Holder of such Claim.
CLASS 1 CLAIMS ARE UNIMPAIRED. Holders of Priority Claims are presumed
to have accepted the Plan and solicitation of votes from Holders of Class 1
Claims is not required under the Bankruptcy Code.
CLASS 2. THE SUNTRUST CLAIMS.
Class 2 consists of the SunTrust Claims, which are defined in the Plan
as the outstanding commitments under the SunTrust Agreements and any other
amounts due thereunder. As of the Petition Date, the outstanding balance owed to
Sun Trust was approximately $2.5 million.
On the Effective Date, the Holder of the Allowed Class 2 Claim shall
receive in full satisfaction thereof, the outstanding unpaid amount due, if any,
under the Sun Trust Agreements, plus accrued and unpaid interest, if any, at the
non-default contractual rate set forth in the SunTrust Agreements through the
Effective Date, plus Allowed fees, costs and expenses, all payable in Cash.
CLASS 2 CLAIMS ARE UNIMPAIRED. Holders of the SunTrust Claims are
presumed to have accepted the Plan and solicitation of votes from holders of
Class 2 Claims is not required under the Bankruptcy Code.
CLASS 3. MISCELLANEOUS SECURED CLAIMS.
Class 3 consists of all Miscellaneous Secured Claims, which are
defined in the Plan as any Allowed Claim that is a Secured Claim other than the
SunTrust Claim. These Claims generally include the Claims of equipment lessors
and merchandise suppliers.
Each Holder of an Allowed Miscellaneous Secured Claim shall be treated
in accordance with Section 1124(2) of the Bankruptcy Code, or in accordance with
the terms of any agreements between the Secured Creditor and the Debtors as
approved by the Bankruptcy Court.
CLAIMS 3 CLAIMS ARE UNIMPAIRED. Holders of Miscellaneous Secured
Claims are presumed to have accepted the Plan and solicitation of votes from
Holders thereof is not required under the Bankruptcy Code.
CLASS 4. CONVENIENCE CLAIMS.
Class 4 consists of all Convenience Claims, which are defined in the
Plan as Unsecured Claims in Allowed Amounts not to exceed $2,000, or that are
voluntarily reduced to $2,000 by written election of the holders of such Claims
on validly executed and timely delivered ballots. The Debtors project that
approximately 1,900 Claims will fall within or opt into this category, resulting
in a total payment obligation of approximately $1.5 million.
On the later of the Effective Date, the date of allowance of its
Convenience Class Claim, or such other date as shall be approved by an order of
the Court, each Holder of an Allowed Claim that is $2,000 or less or reduced to
$2,000 or less shall receive a Cash payment equal to the lesser of the Allowed
amount of the Claim or $2,000.
CLASS 4 CLAIMS ARE UNIMPAIRED. Holders of Convenience Claims are
presumed to have accepted the Plan and solicitation of votes from Holders of
Class 4 Claims is not required under the Bankruptcy Code.
CLASS 5. OLD SENIOR SUBORDINATED NOTES CLAIMS.
Class 5 consists of all Old Senior Subordinated Notes Claims held by
the Holders of the 12% Senior Subordinated Notes due 2005, issued by PHI
pursuant to the Old Senior Subordinated Notes Indenture.
On the Effective Date, each Holder of an Allowed Class 5 Claim as of
the Distribution Record Date, shall have an Allowed Claim equal to the face
amount of its Old Senior Subordinated Notes plus unpaid accrued interest and
interest on defaulted payments of interest at the default rate provided in the
Old Senior Subordinated Notes Indenture and related documents through the
Petition Date. Under the Plan, the holder of an Allowed Class 5 Claim shall
receive, in full satisfaction of its Allowed Class 5 Claim, its Pro Rata share
of: (i) $47.5 million in Cash, (ii) $60 million of New Secured PIK Notes; and
(iii) 2.65 million shares of New Class A Common Stock. If, prior to the
Confirmation Date, PHI has entered into the Bay Harbour Agreement, then PHI
shall deliver to Electing Holders of Class 5 Claims in lieu of payment of up to
$25 million Cash and, if applicable, any unsubscribed amount to Bay Harbour
under the Bay Harbour Agreement, their respective Pro Rata shares of up to $25
million of New Senior Secured Notes having the principal economic terms set
forth in Annex A to the Plan, or other terms not materially more adverse to any
Class under the Plan, plus their Pro Rata Share of a fee consisting of $625,000
Cash and 350,000 shares of New Class A Common Stock. In the event that the
amount of any New Class A Common Stock paid to a third-party lender as partial
consideration for the purchase of the New Senior Secured Notes is less than
350,000 shares of New Class A Common Stock, then the Holders of Class 5 Claims
shall receive, on the Effective Date, their Pro Rata share of that undistributed
New Class A Common Stock up to a total of 350,000 shares (the "Supplemental
Class 5 Distribution"), and the amount of New Secured PIK Notes distributed to
Class 5 shall be reduced by the Class 6 Adjustment Amount. The principal
economic terms of the New Secured PIK Notes are set forth in Section II of this
Disclosure Statement, and on ANNEX B to the Plan. Failure of a Class 5 Claim
holder to check the appropriate box on the Ballot will preclude them from
receiving a distribution of New Senior Secured Notes under the Plan.
CLASS 5 CLAIMS ARE IMPAIRED. The beneficial Holders of the Old Senior
Subordinated Notes are entitled to vote to accept or reject the Plan.
CLASS 6. GENERAL UNSECURED CLAIMS.
Class 6 consists of all General Unsecured Claims, which are defined as
any Claim (including any Trade Claim, Rejection Claim, and Litigation Claim)
that is not a Consolidated Claim, Old Senior Subordinated Notes Claim,
Intercompany Claim, Administrative Claim, Priority Claim, SunTrust Claim, a
Miscellaneous Secured Claim, Landlord Settlement Agreement Claim or Old
Indenture Trustee Claim. Each Holder of an Allowed Class 6 Claim shall receive,
in full satisfaction of its Allowed Claim, Cash and New Secured PIK Notes having
an aggregate value as a percentage of its Allowed Claim, equal to the aggregate
value of the consideration to be received by each Holder of an Allowed Class 5
Claim as a percentage of its Allowed Claim. The Cash component of the
distribution to Class 6 shall be the same percentage of a Class 6 Holder's
Allowed Claim as the Cash component of the distribution to Class 5 is as a
percentage of the Allowed Claims of Holders in Class 5, counting a distribution
of New Senior Secured Notes to Class 5, if any, as a Cash payment. For purposes
of calculating the Class 6 distribution, the New Secured PIK Notes shall be
valued at their face amount, and New Class A Common Stock shall be valued at
$4.2857 per share. In the event Class 5 receives the Supplemental Class 5
Distribution, then the Holders of Class 6 Claims shall receive, on the Effective
Date, their Pro Rata share of the Class 6 Adjustment Amount determined as
provided in Section 5.6 of the Plan.
CLASS 6 CLAIMS ARE IMPAIRED. Holders of General Unsecured Claims are
entitled to vote to accept or reject the Plan.
CLASS 7. LANDLORD SETTLEMENT AGREEMENT CLAIMS.
Class 7 consists of Landlord Settlement Agreement Claims which are
defined in the Plan as pre Petition Date or post Petition Date agreements
between PHI or any of its Filed Subsidiaries and a landlord regarding the
restructuring, termination or sale of a Debtor's leasehold rights and
obligations which requires approval or ratification thereof by the Bankruptcy
Court, and which give rise to Claims for the payment of Cash, performance by a
Debtor under a lease, a Debtor's surrender of leasehold or other property
rights, or as otherwise provided under the applicable Landlord Settlement
Agreement. All such Claims shall be Allowed unless the Court enters a Final
Order disallowing, disapproving or unwinding a Landlord Settlement Agreement.
CLASS 7 CLAIMS ARE UNIMPAIRED. Holders of Landlord Settlement
Agreement Claims are presumed to have accepted the Plan and solicitation of
votes from Holders of Class 7 Claims is not required under the Bankruptcy Code.
CLASS 8. OLD COMMON STOCK.
Class 8 consists of all Interests of Holders of Old Common Stock of
PHI which is defined in the Plan as, collectively, the Class A and Class B
common shares, par value $.01 per share, issued and outstanding, or held in
treasury, immediately prior to the Effective Date.
If both Class 5 and Class 6 accept the Plan, each Holder of an Allowed
Class 8 Interest as of the Distribution Record Date shall receive on the
Effective Date, in full satisfaction of its Allowed Interest, its Pro Rata share
of New Warrants, PROVIDED, HOWEVER, that no distribution will be made to a
Holder of less than 5,450 shares of Old Common Stock. If either Class 5 or Class
6 rejects the Plan, Holders of Class 8 Interests shall not receive or retain any
property on account of their Class 8 Interests and no New Warrants shall be
issued.
CLASS 8 INTERESTS ARE IMPAIRED. Holders of Old Common Stock Interest
are presumed to have rejected the Plan and solicitation of votes from them is
not required under the Bankruptcy Code.
CLASS 9. CLAIMS FOR ISSUANCE OF OLD COMMON STOCK.
Class 9 consists of all Old Warrants, Old Celebrity Options and Old
Employee Options and all other options or rights to acquire Old Common Stock,
including, without limitation, all Claims arising out of the rejection of Old
Warrants, Old Celebrity Options and Old Employee Options and other options to
acquire Old Common Stock, to the extent they constitute executory contracts, and
any Claim that has the same priority as the Old Common Stock pursuant to Section
510(b) of the Bankruptcy Code, including, without limitation, any Claim for the
issuance of Old Common Stock in connection with an acquisition or otherwise.
The Holders of Class 9 Claims shall not receive or retain any property
under the Plan. All options or rights to acquire the Old Common Stock shall be
canceled, annulled and extinguished on the Effective Date.
CLASS 9 CLAIMS ARE IMPAIRED. Holders of Claims for issuance of Old
Common Stock are presumed to have rejected the Plan and solicitation of votes
from Holders of Class 9 Claims is not required under the Bankruptcy Code.
CLASS 10. INTERCOMPANY CLAIMS.
Class 10 consists of all Intercompany Claims, which are defined under
the Plan as any Claim held by any Domestic Subsidiary or Foreign Subsidiary,
other than any of the Consolidated Debtors, against any of the Debtors.
Each Holder of an Allowed Class 10 Claim shall be treated in
accordance with Section 1124(2) of the Bankruptcy Code.
CLASS 10 CLAIMS ARE UNIMPAIRED. Holders of Intercompany Claims are
presumed to have accepted the Plan and solicitation of votes from Holders of
Class 10 Claims is not required under the Bankruptcy Code.
CLASS 11. INTERCOMPANY INTERESTS.
Class 11 consists of all stock ownership Interests of PHI and any
Subsidiary in any other Subsidiary or Unconsolidated Affiliate.
The Holders of Class 11 Interests shall retain unaltered the legal,
equitable and contractual rights to which their Interests entitle them in
accordance with Section 1124(2) of the Bankruptcy Code.
CLASS 11 INTERESTS ARE UNIMPAIRED. Holders of Intercompany Interests
are presumed to have accepted the Plan and solicitation of votes from Holders of
Class 11 Interests is not required under the Bankruptcy Code.
POST-PETITION INTEREST. To the extent required by the Bankruptcy Court
or applicable law, the aggregate distribution paid to Holders of Allowed Claims
deemed to be unimpaired under the Plan shall include interest accrued thereon
from the Petition Date through the Effective Date at the lower of (i) the
Treasury Rate; (ii) the rate earned on the Debtors' cash investments; or (iii)
the rate determined by the Bankruptcy Court.
ALLOCATION BETWEEN PRINCIPAL AND ACCRUED INTEREST. The aggregate
consideration paid to Holders in respect of their Allowed Claims shall be
treated under this Plan as allocated first to the principal amount of such
Allowed Claim to the extent thereof and, thereafter, to the interest, if any,
accrued thereon through the Effective Date.
B. MEANS FOR EXECUTION OF THE PLAN
FUNDING THE PLAN. On the Effective Date, PHI shall (i) receive $30
million cash from the New Money Investor as the purchase price for 7.0 million
shares of New Class B Common Stock; (ii) issue up to $25 million face amount of
the New Senior Secured Notes and any applicable fee in Cash and/or New Common
Stock to third party lenders and/or to Bay Harbour and Electing Holders of Class
5 Claims; and (iii) obtain such other financing on terms reasonably acceptable
to the Committee as necessary to fund the Debtors' obligations under the Plan
and to operate the Reorganized Debtors. Reorganized PHI shall issue the New
Senior Secured Notes, the New Secured PIK Notes, the New Warrants, New Options
and New Common Stock, and shall deliver Cash to the Entities entitled to receive
distributions under the Plan.
CANCELLATION OF OLD SECURITIES, INSTRUMENTS AND AGREEMENTS RELATING TO
IMPAIRED CLAIMS AND INTERESTS. On the Effective Date, except as otherwise
provided in the Plan or by Court order, all securities, instruments and
agreements governing any Claims and Interests Impaired by the Plan shall be
deemed canceled and terminated, and the obligations of the Debtors relating to,
arising under, in respect of or in connection with such securities, instruments
and agreements shall be discharged; PROVIDED, HOWEVER, that notes, securities
and other evidences of Claims and Interests shall, effective upon the Effective
Date, represent the right to participate, to the extent such Claims and
Interests are Allowed, in the distributions contemplated by the Plan.
EFFECTIVENESS OF SECURITIES, INSTRUMENTS AND AGREEMENTS. On the
Effective Date, all securities, instruments and agreements entered into or
issued pursuant to the Plan, including, without limitation, the Plan documents
and any security, instruments or agreements entered into in connection with any
such documents shall become effective and binding in accordance with their
respective terms and conditions upon the parties thereto and shall be deemed to
become effective simultaneously.
CORPORATE GOVERNANCE AND VOTING. On the Effective Date, Reorganized
PHI will be authorized to issue 225 million shares of Common Stock consisting of
100 million shares of New Class A Common Stock, par value $.01 per share, and 25
million shares of New Class B Common Stock, par value $.01 per share and 100
million shares of preferred stock, par value $.01 per share. The New Class A
Common Stock and the New Class B Common Stock are referred to collectively
herein as the "Common Stock." On the Effective Date, approximately 3.0 million
shares of New Class A Common Stock and 7.0 million shares of New Class B Common
Stock are expected to be issued and outstanding. On the Effective Date, no
shares of preferred stock will be issued and outstanding.
Each share of New Common Stock held of record as of the record date of
any meeting shall entitle the holder thereof to one vote on each matter
submitted to a vote of the stockholders. Except in connection with the election
or removal of Directors or as may otherwise be provided by the Amended PHI
Articles or Delaware law, the New Class A Common Stock and the New Class B
Common Stock shall vote together, as a single class, on all matters.
The Amended PHI Articles provide that all dividends, whether cash,
property or stock, shall be shared ratably among all holders of Common Stock;
provided that all dividends and distributions on the New Class A Common Stock
payable in stock of Reorganized PHI shall be made in shares of New Class A
Common Stock, and all dividends and distributions on the New Class B Common
Stock payable in stock of the Reorganized PHI shall be made in shares of New
Class B Common Stock. Similarly, in the event of the voluntary or involuntary
liquidation, dissolution or winding up of Reorganized PHI, the holders of New
Class A Common Stock and New Class B Common Stock shall be entitled to share
ratably as a single class in all of the remaining assets of Reorganized PHI of
whatever kind available for distribution to stockholders.
The Board of Directors of Reorganized PHI shall be comprised of seven
directors, consisting of two Class A Directors and five Class B Directors. The
holders of the New Class A Common Stock, voting separately as a single class,
will elect the Class A Directors by a plurality of votes cast, and the holders
of the New Class B Common Stock, voting separately as a single class, will elect
the Class B Directors by a plurality of votes cast.
On the Effective Date, the Board of Directors of Reorganized PHI shall
consist of five members appointed by the New Money Investors (the "Class B
Directors") and two members appointed by the Creditors' Committee (the "Class A
Directors"). After the Effective Date, Holders of New Class A Common Stock shall
have the right to elect the two Class A Directors until repayment in full of the
New Secured PIK Notes, at which time the number of Class A Directors shall be
reduced to one and the number of Class B Directors shall be increased to six,
and thereafter the Class A Director shall be elected by the holders of New Class
A Common Stock and the Class B Directors shall be elected by the Holders of New
Class B Common Stock, in each case, voting separately as a single class, by a
plurality of the votes cast. Any one or more of the Class A Directors may be
removed with or without cause only by a vote of the holders of a majority of the
outstanding shares of New Class A Common Stock, voting separately as a single
class. Anyone or more of the Class B Directors may be removed with or without
cause only by a vote of the holders of a majority of the outstanding shares of
New Class B Common Stock, voting separately as a single class.
Robert Earl shall be the Chief Executive Officer of PHI as of the
Confirmation Date and on and after the Effective Date. Selection of a Chief
Financial Officer and Chief Operating Officer for Reorganized PHI prior to or as
of the Effective Date shall be subject to the consent, not to be unreasonably
withheld, of the Creditors' Committee, and after the Effective Date shall be
subject to the approval of a majority of the members (including at least one
Class A Director) of Reorganized PHI's Board of Directors. Officers and
directors for all of the Reorganized Debtors other than PHI shall be designated
by the Board of Directors of Reorganized PHI. Except as otherwise provided
herein or in any Plan Document, the members of the existing Board of Directors
of PHI shall have no continuing obligations to any of the Debtors or Reorganized
PHI on and after the Effective Date.
The individuals listed as directors of Reorganized PHI as of the
Confirmation Date shall serve as directors of Reorganized PHI and their
elections to the Board of Directors of Reorganized PHI shall be deemed to have
occurred and be effective on and after the Effective Date without any
requirement of further action by stockholders of PHI or Reorganized PHI. The
Class B Directors will be chosen by the New Money Investors and the Class A
Directors will be chosen by the Creditors' Committee.
The Amended PHI Articles will provide that New Class B Common Stock
may be transferred to any other Person, provided that upon such transfer (other
than a transfer to a New Money Investor or an affiliate of a New Money Investor)
such shares shall be automatically converted into an equal number of shares of
New Class A Common Stock. All shares of New Class B Common Stock shall be
convertible at any time after payment in full of the New Secured PIK Notes, at
the option of the holders thereof, into New Class A Common Stock; provided that
any such optional conversion must include all then outstanding shares of New
Class B Common Stock. In addition, in the event that the number of outstanding
shares of Class B Common Stock constitutes 10% or less of the aggregate number
of all outstanding shares of Common Stock, all outstanding shares of New Class B
Common Stock shall be automatically converted into New Class A Common Stock. At
such time as there are no shares of New Class B Common Stock outstanding, the
holders of New Class A Common Stock shall elect all members of the Board of
Directors of Reorganized PHI. In addition, the certificates and articles of
incorporation and by-laws of each Subsidiary shall be amended as required by
applicable law to incorporate all other relevant provisions of the Plan with
respect to such certificates, articles and by-laws.
STOCK OPTION PLANS. The Company shall execute on the Effective Date
two stock option plans, one for management and one for Celebrities. The terms of
those plans as developed to date are set forth in Section II of this Disclosure
Statement, "Summary Terms of New Stock Option Plans". The options to be issued
under the plans are exercisable into shares of New Class A Common Stock. A
committee to be appointed by the Board of Directors will determine the exercise
price and exercise term of the options. PHI shall reserve for issuance upon
exercise of the options a total of 1 million shares of New Class A Common Stock,
representing 10% of all issued and outstanding shares of New Common Stock as of
the Effective Date. Holdings of New Class A Common Stock are subject to dilution
upon exercise of the options. The stock options will be issued pursuant to an
exemption from the registration requirements under the Securities Act of 1933,
as amended (the "Securities Act") provided by Section 4(2) thereof or pursuant
to a Form S-8 filing by Reorganized PHI.
SUBSTANTIVE CONSOLIDATION. The Plan contemplates the substantive
consolidation of the Chapter 11 Cases of the Debtors into a single Case solely
for purposes of confirmation, consummation and implementation of the Plan.
Pursuant to the Confirmation Order, on the Confirmation Date: (i) all assets,
and all proceeds thereof, and all liabilities of the Consolidated Debtors will
be merged or treated as though they were merged with and into the assets and
liabilities of Reorganized PHI; (ii) all Consolidated Claims and Claims among
the Consolidated Debtors will receive no distribution under the Plan; (iii) any
obligation of any Consolidated Debtor, and all guarantees thereof executed by
one or more of the Consolidated Debtors, and any Claims Filed or to be Filed in
connection with any such obligation and guarantee will be deemed one Claim
against Reorganized PHI; (iv) each and every Claim Filed in the individual
Chapter 11 Case of any of the Consolidated Debtors will be deemed Filed against
Reorganized PHI; and (v) for purposes of determining the availability of the
right of set-off under Section 553 of the Bankruptcy Code, the Consolidated
Debtors shall be treated for purposes of the Plan as one entity so that, subject
to the other provisions of Section 553 of the Bankruptcy Code, debts due to any
of the Consolidated Debtors may be setoff against the debts of any of the
Consolidated Debtors.
The Debtors believe substantive consolidation for purposes of
confirmation, consummation and implementation of the Plan is fair, equitable and
in the best interests of Creditors. SEE Section VII. D. for further discussion.
EXTINGUISHMENT OF GUARANTEES. Except as otherwise provided in the Plan
or in any Plan Document, or in executory contracts or leases assumed by the
Debtors, on the Effective Date, all Claims based upon guarantees of collection,
payment or performance made by any of the Debtors as to the obligations of each
other, including, without limitation, the Leasehold Guarantees, shall be
discharged, released and of no further force and effect. Guarantees by the
Debtors, non-Debtor affiliates or any officers or directors or other third
parties or their affiliates of leases or contracts that are assumed by the
Debtors on or prior to the Effective Date shall remain in existence and shall
not be discharged or extinguished.
CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS IN REORGANIZED PHI
AND THE OTHER REORGANIZED Debtors. PHI shall continue to exist on and after the
Effective Date as Reorganized PHI, a corporation duly organized under the laws
of Delaware, with all the rights and powers of a corporation under applicable
law and without prejudice to any right to alter or terminate such existence
(whether by merger or otherwise) under Delaware law, subject to the terms and
provisions of the Plan and the Confirmation Order. Unless otherwise determined
by PHI, the other Reorganized Debtors shall continue to exist on and after the
Effective Date as entities duly organized under the laws of their respective
states of incorporation or organization. Except as otherwise provided in the
Plan, on or after the Effective Date, all property of the Consolidated Estates,
and any property and assets acquired by the Debtors or the Reorganized Debtors
under any provisions of the Plan, shall vest in the Reorganized Debtors, free
and clear of any and all Claims, Liens, charges and other Encumbrances. On and
after the Effective Date, the Reorganized Debtors may operate their businesses
and may use, acquire and dispose of property or assets and compromise or settle
any Claims against them without supervision or approval by the Bankruptcy Court
and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other
than those restrictions expressly imposed by the Plan or the Confirmation Order.
Without limiting the foregoing, the Reorganized Debtors may pay the charges that
they incur on or after the Effective Date for Professional fees, disbursements,
expenses or related support services without application to the Bankruptcy
Court, except to the extent otherwise provided in the Plan.
C. DISTRIBUTIONS
GENERALLY. Except as otherwise provided in the Plan, any distribution
required by the Plan to be made on the Effective Date in respect of a Claim or
Interest that is Allowed as of the Effective Date will be deemed made on the
Effective Date if made on the Effective Date or as promptly thereafter as
practicable, but in any event no later than the later to occur of: (i) 45 days
after the Effective Date or (ii) the date on which such Claim or Interest
becomes Allowed and any other conditions to distribution with respect to such
Claim or Interest shall have been satisfied.
DISTRIBUTIONS TO THE HOLDER OF SUNTRUST CLAIMS. Any Cash payment
required to be made on the SunTrust Claims will be delivered by Reorganized PHI
to SunTrust on the Effective Date conditioned on the delivery by SunTrust of
executed releases of Liens, guarantees and cash collateral including any
necessary mortgage satisfactions, UCC Termination Statements or other documents
reasonably requested by PHI.
DISTRIBUTIONS TO HOLDERS OF OLD SENIOR SUBORDINATED NOTES CLAIMS. All
distributions provided for in the Plan on account of Old Senior Subordinated
Notes Claims will be made to the Old Indenture Trustee for further distribution
to individual Holders of Old Senior Subordinated Notes Claims. Any such
distribution made by the Old Indenture Trustee will be made pursuant to the Old
Senior Subordinated Notes Indenture; provided, however, that any distributions
of New Senior Secured Notes shall be made only to Electing Holders of Class 5
Claims. Notwithstanding any provision in the Plan to the contrary, the Old
Senior Subordinated Notes Indenture will continue in effect to the extent
necessary to allow the Old Indenture Trustee to receive and make distributions
pursuant to the Plan on account of Old Senior Subordinated Notes Claims. Any
actions taken by the Old Indenture Trustee on or after the Effective Date that
are not for this purpose will be null and void as against the Debtors and
Reorganized PHI, and Reorganized PHI will have no obligations to the Old
Indenture Trustee for any fees, costs or expenses incurred in connection with
any such actions.
DISTRIBUTIONS TO HOLDERS OF OTHER CLAIMS AND INTERESTS. Reorganized
PHI will make all distributions required under the Plan, except for
distributions made by the Old Indenture Trustee. Reorganized PHI may employ or
contract with other Entities including but not limited to the Old Stock Transfer
Agent to assist it in making the distributions required by the Plan.
COMPENSATION FOR SERVICES RELATED TO DISTRIBUTION. In consideration
for providing services related to distributions pursuant to the Plan, the Old
Indenture Trustee and any other Entity employed by Reorganized PHI will receive
from Reorganized PHI without further Bankruptcy Court approval, reasonable
compensation for such services and reimbursement of reasonable out-of-pocket
expenses incurred in connection with such services. These payments will be made
on terms agreed to with Reorganized PHI and will not be deducted from
distributions to be made pursuant to the Plan to Holders of Allowed Claims and
Allowed Interests.
DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS.
(a) Distributions to Holders of Allowed Claims and Holders
of Allowed Interests will be made as follows: (a) with respect to Old Senior
Subordinated Notes Claims by the Old Indenture Trustee, in accordance with the
applicable Old Senior Subordinated Notes Indenture; (b) with respect to all
other Allowed Claims, by Reorganized PHI (i) at the addresses set forth on the
respective proofs of Claim Filed by Holders of such Claims; (ii) at the
addresses set forth in any written notices of address change delivered to
Reorganized PHI after the Bar Date; (iii) at the addresses reflected in the
applicable Debtor's records if no proof of Claim has been Filed and Reorganized
PHI has not received a written notice of a change of address; and (c) with
respect to Allowed Class 8 Interests by Reorganized PHI at the addresses for
record holders supplied by the Old Transfer Agent or by PHI as of the
Distribution Record Date.
(b) If any distribution to a Holder of a Class 5 Claim is
returned to the Old Indenture Trustee as undeliverable (an "Undeliverable Class
5 Distribution"), no further distributions will be made to that Holder until the
Old Indenture Trustee is notified in writing of such Holder's then current
address. If a Holder of Old Senior Subordinated Notes is not entitled to a
distribution under the Old Senior Subordinated Notes Indenture, the Plan, or any
order of the Bankruptcy Court, such distribution shall be treated as an
Undeliverable Class 5 Distribution. Any such Undeliverable Class 5 Distributions
will be held by the Old Indenture Trustee until they become deliverable or one
year from the Effective Date, whichever is earlier. After one year from the
Effective Date, the Old Indenture Trustee may redistribute the Undeliverable
Class 5 Distributions to other claimants receiving Class 5 Distributions, on a
pro rata basis. Any such distribution shall not alter the calculation of the
aggregate value distributable to Class 5 for purposes of calculating the
distribution to Class 6. If the Undeliverable Class 5 Distributions are so small
as to make it unduly burdensome to distribute them to other claimants, the Old
Indenture Trustee will return the Undeliverable Class 5 Distributions to
Reorganized PHI.
(c) If any distribution to any other Holders of Allowed
Claims or Allowed Interests is returned as undeliverable, no further
distributions will be made to such Holders until Reorganized PHI or its
distribution agents are notified in writing of such Holder's then current
address.
(d) Undeliverable Cash (including dividends or other
distributions on account of undeliverable New Common Stock) will be held in
segregated bank accounts in the name of Reorganized PHI for the benefit of the
potential claimants of such funds. Undeliverable Cash will be invested by
Reorganized PHI in a manner consistent with Reorganized PHI's investment and
deposit guidelines. Subject to paragraph 6.3.6(b) above, undeliverable Plan
Securities will be held by Reorganized PHI for the benefit of the potential
claimants of such securities. Any Holder of an Allowed Claim or an Allowed
Interest that does not assert a claim pursuant to the Plan for an undeliverable
distribution to be made by Reorganized PHI or the Old Indenture Trustee, as the
case may be, within one year after the Effective Date will have its claim for
such undeliverable distribution discharged and will be forever barred from
asserting any such claim against the Debtors, Reorganized PHI, the other
Reorganized Debtors or their respective property. In such case, (i) any Cash
held for distribution on account of such claims for undeliverable distributions
(including Cash interest, maturities, dividends and other distributions on
undelivered Plan Securities, as the case may be) shall be property of
Reorganized PHI, free of any restrictions thereon (except as otherwise provided
in any Plan Document); (ii) any New Secured PIK Notes held for distribution on
account of such claims for distribution shall be canceled and of no further
force or effect; and (iii) any New Common Stock held for distribution on account
of such claims for distribution shall either be canceled or held as treasury
shares as Reorganized PHI may determine is appropriate.
(e) Pending the distribution of the New Common Stock,
Reorganized PHI will cause all of the New Common Stock held by it for
distribution under the Plan to be: (i) represented in person or by proxy at each
meeting of the stockholders of Reorganized PHI; and (ii) voted proportionately
with the votes cast with respect to New Class A Common Stock, by the other
holders of New Class A Common Stock taken as a whole, and with respect to New
Class B Common Stock by the other holders of New Class B Common Stock taken as a
whole.
DISTRIBUTION RECORD DATE.
As of the close of business on the Distribution Record Date, the
respective transfer registers for the Old Securities (as applicable) will be
closed, and Reorganized PHI, the Old Indenture Trustee, the Old Stock Transfer
Agent and their respective agents will have no obligation to recognize the
transfer of any Old Securities occurring after the close of business on the
Distribution Record Date and will be entitled for all purposes herein to
recognize and deal only with those Holders of record as of the close of business
on the Distribution Record Date.
MEANS OF CASH PAYMENTS. Except as otherwise specified herein, Cash
payments made pursuant to the Plan will be in U.S. dollars by checks drawn on a
domestic bank selected by Reorganized PHI, or by wire transfer from a domestic
bank, at the option of Reorganized PHI.
FRACTIONAL PLAN SECURITIES.
(a) Notwithstanding any other provisions of the Plan,
principal amounts of the New Secured PIK Notes, or the New Senior Secured Notes
will be initially issued only in denominations of $1,000 and integral multiples
thereof. When any distribution on account of an Allowed Claim would otherwise
result in the issuance of New Secured PIK Notes or the New Senior Secured Notes
with an aggregate principal amount that is not an integral multiple of $1,000,
the actual distribution of such notes will be rounded to the next higher or
lower integral multiple of $1,000, as follows: (a) aggregate principal amounts
that exceed an integral multiple of $1,000 by $500 or more will be rounded to
the next higher integral multiple of $1,000 and (b) aggregate principal amounts
that exceed an integral multiple of $1,000 by less than $500 will be rounded to
the next lower integral multiple of $1,000. If, as a result of such rounding,
the sum of such principal amounts differs from the aggregate principal amount of
such New Secured PIK Notes or the New Senior Secured Notes specified to be
distributed pursuant to the Plan, as applicable, the aggregate principal amount
of the New Secured PIK Notes or the New Senior Secured Notes specified will be
adjusted upward or downward to provide for the distribution of the applicable
New Secured PIK Notes or the New Senior Secured Notes specified in an aggregate
principal amount equal to such sum. No consideration will be provided in lieu of
principal amounts that are rounded down.
(b) Notwithstanding any other provision of the Plan, only
whole numbers of shares of New Common Stock, and whole numbers of New Warrants
will be issued. When any distribution on account of an Allowed Claim or an
Allowed Interest would otherwise result in the issuance of a number of shares of
New Common Stock or a number of New Warrants that is not a whole number, the
actual distribution of shares of such stock or warrants will be rounded to the
next higher or lower whole number as follows: (i) fractions equal to or greater
than 1/2 will be rounded to the next higher whole number and (ii) fractions less
than 1/2 will be rounded to the next lower number. The total number of shares of
New Common Stock or New Warrants specified to be distributed to a Class of
Claims or Interests will be adjusted as necessary to account for the rounding
provided for herein. If, as a result of such rounding, the amount of shares of
New Common Stock or the amount of New Warrants to be distributed to a particular
Class differs from the aggregate number of shares of New Common Stock or New
Warrants specified to be distributed pursuant to the Plan to that Class, the
aggregate number of shares of New Common Stock or the amount of New Warrants
specified with respect to such Class will be adjusted upward or downward to
provide for the appropriate distribution of New Common Stock or New Warrants, as
the case may be. No consideration will be provided in lieu of fractional shares
or warrants that are rounded down. In addition, notwithstanding the foregoing,
no de minimis distributions shall be made as provided in Section 14.17 of the
Plan.
SURRENDER OF CANCELED INSTRUMENTS OR SECURITIES.
(a) As a condition precedent to receiving any distribution
pursuant to the Plan on account of an Allowed Claim or an Allowed Interest
evidenced by the notes, instruments, securities or other documentation canceled
pursuant to the Plan, the Holder of such Claim or Interest will tender the
applicable notes, instruments, securities or other documentation evidencing such
Claim or Interest to Reorganized PHI or its designated agent, or the Old
Indenture Trustee, as applicable. Any Cash or Plan Securities to be distributed
pursuant to the Plan on account of any such Claim or Interest will, pending such
surrender, be treated as an undeliverable distribution pursuant to Section 6.3.6
of the Plan.
(b) Except as provided in Section 6.3.10(c) of the Plan,
each Holder of an Allowed Claim or an Allowed Interest will tender its Old
Security to Reorganized PHI or its designated agent or the Old Indenture
Trustee, as applicable, together with a letter of transmittal to be provided to
such Holder by Reorganized PHI or its designated agent, or the Old Indenture
Trustee as promptly as practicable following the Effective Date. The letter of
transmittal will include, among other provisions, customary provisions with
respect to the authority of the Holder of the applicable Old Security to act and
the authenticity of any signatures required thereon. All surrendered Old
Securities will be marked as canceled by Reorganized PHI or its designated
agent, or the Old Indenture Trustee, as applicable, and delivered to Reorganized
PHI.
(c) In addition to any requirements under the applicable Old
Senior Subordinated Notes Indenture, any Holder of a Claim or Interest evidenced
by an Old Security that has been lost, stolen, mutilated or destroyed will, in
lieu of surrendering such Old Security, deliver to Reorganized PHI or its
designated agent, or the Old Indenture Trustee, as applicable: (i) evidence
satisfactory to such Entity of such loss, theft, mutilation or destruction and
(ii) such security or indemnity as may be required by such Entity to hold such
Entity harmless from any damages, liabilities or costs incurred in treating such
individual as a Holder of an Old Security. Upon compliance with Section
6.3.10(c) of the Plan by a Holder of a Claim or an Interest evidenced by an Old
Security, such Holder will, for all purposes under the Plan, be deemed to have
surrendered an Old Security.
(d) Any Holder of an Old Security that fails to surrender or
be deemed to have surrendered such Old Security within one year after the
Effective Date will have its claim for a distribution pursuant to the Plan on
account of such Old Security discharged and will be forever barred from
asserting any such claim against the Debtors, Reorganized PHI, the other
Reorganized Debtors or their respective property.
SETOFF. Reorganized PHI may, but shall not be required to, set off
against any Allowed Claim and the distributions to be made pursuant to the Plan
on account of such Claim, claims of any nature that the Debtors or Reorganized
PHI may have against the Holder of such Allowed Claim; PROVIDED, HOWEVER, that
neither the failure to effect such a setoff nor the allowance of any Claim
against the Debtors or Reorganized PHI shall constitute a waiver or release by
the Debtors or Reorganized PHI of any claim that the Debtors or Reorganized PHI
may possess against such Holder.
INDENTURE TRUSTEE CHARGING LIENS. In full satisfaction of Allowed
Claims secured by Indenture Trustee Charging Liens, the Old Indenture Trustee
will receive from Reorganized PHI Cash equal to the amount of such Claims, and
any Indenture Trustee Charging Liens will be released. Distributions received by
Holders of Allowed Claims pursuant to the Plan will not be reduced on account of
payment of Allowed Claims secured by Indenture Trustee Charging Liens.
Notwithstanding any other provisions of the Plan, upon: (a) submission of
appropriate documentation to Reorganized PHI regarding fees and expenses
incurred by the Old Indenture Trustee in connection with the Chapter 11 Cases
through the Effective Date that are secured by an Old Indenture Trustee Charging
Lien and (b) the failure of Reorganized PHI to object on the grounds of
reasonableness, as determined under the terms of the applicable Old Senior
Subordinated Notes Indenture, to the payment of such fees and expenses within 20
Business Days after receipt of such documentation, the Old Indenture Trustee
will be deemed to hold an Allowed Claim for such fees and expenses, which
Reorganized PHI will pay in Cash within 30 Business Days after the receipt of
the documentation regarding the fees and expenses of such Old Indenture Trustee,
without further Bankruptcy Court approval.
RETIREE BENEFITS. On and after the Effective Date, to the extent
required by Section 1129(a)(13) of the Bankruptcy Code, Reorganized PHI shall
continue to pay all retiree benefits (if any), as the term "retiree benefits" is
defined in Section 1114(a) of the Bankruptcy Code, maintained or established by
the Debtors prior to the Confirmation Date.
EXEMPTIONS FROM SECURITIES LAWS AND SHELF REGISTRATION.
(a) The Confirmation Order will provide that the offer and
sale of those Plan Securities that are issued in exchange for a Claim against,
an interest in, or a Claim for an administrative expense against the Debtors, or
principally in such exchange and partly for cash or property, are exempt from
registration pursuant to Section 1145(a) of the Bankruptcy Code and that those
Plan Securities may be resold by the holders thereof without restriction, except
to the extent that any such holder is deemed to be an "underwriter," as defined
in Section 1145(b)(1) of the Bankruptcy Code with respect to the Plan
Securities. With respect to Plan Securities issued to the New Money Investors,
or to a purchaser of the New Senior Secured Notes that is not exchanging Claims
for such securities, the Company does not rely on Section 1145 for an initial
exemption from registration, but rather intends to utilize a private placement
exemption provided by Section 4(2) of the Securities Act.
The Company is presently negotiating with several individual and
institutional potential purchasers of the New Senior Secured Notes. No final
agreement has been reached as yet. If no such agreement is finalized, the
Debtors intend to ask the Holders of Old Senior Subordinated Notes Claims to
take the New Senior Secured Notes in lieu of a portion of the Cash otherwise
distributable to Class 5. The Company recognizes that the New Senior Secured
Notes (if issued to the Holders of Old Senior Subordinated Notes Claims) and the
New Secured PIK Notes, will need to have indentures that are qualified under the
Trust Indenture Act. The Company intends, if possible, to file the necessary
application(s) for such qualifications at or prior to the time of commencement
of the solicitation of votes on the Plan. However, such application may be
amended as the terms of the Indentures are finalized.
(b) Reorganized PHI, the New Money Investors and certain other Holders
of Plan Securities, if any, who may be deemed to be "underwriters" as defined in
Section 1145(b)(1) of the Bankruptcy Code with respect to the Plan Securities,
shall enter into a Registration Rights Agreement, substantially in the form to
be Filed as EXHIBIT "12" to the Plan at or prior to the Confirmation Hearing.
The Registration Rights Agreement requires Reorganized PHI to use its reasonable
best efforts to file within [90] days after the Effective Date, or such longer
time as may be required to prepare the necessary financial statements, at its
expense, a "shelf" registration statement (the "Shelf Registration Statement"),
and to have the Shelf Registration Statement declared effective as soon as
practicable after such filing and to keep the Shelf Registration Statement
continuously effective until the second anniversary of the effective date
thereof. No securities other than the New Common Stock, the New Senior Secured
Notes, the New Secured PIK Notes and the New Warrants, in each instance held by
the New Money Investors or an Entity deemed to be an "underwriter" under Section
11245(b)(1) of the Bankruptcy Code, shall be included in the Shelf Registration
Statement. Reorganized PHI shall also, if necessary, supplement or make
amendments to the Shelf Registration Statement to the extent necessary to keep
the Shelf Registration Statement effective as aforesaid.
D. ACCEPTANCE OR REJECTION OF THE PLAN/CONFIRMATION NOTWITHSTANDING
REJECTION BY AN IMPAIRED CLASS.
Only Holders of Allowed Claims in Class 5 (Old Senior Subordinated
Notes Claims) and Class 6 (General Unsecured Claims) are Impaired Classes
entitled to vote on the Plan. Holders of Claims or Interests in Classes 1, 2, 3,
4, 7, 10 and 11 are presumed to have accepted the Plan since they are
Unimpaired. Holders of Claims or Interests in Classes 8 and 9 are deemed to have
rejected the Plan.
An Impaired Class of Claims shall have accepted the Plan if two-thirds
in amount and a majority in number of Claims that are actually voted accept
their treatment under the Plan.
If any Impaired Class (other than Class 5) does not accept the Plan,
the Debtors may request confirmation of the Plan under the "cramdown"
provisions, and reserve the right to seek to modify the Plan as necessary to
ensure satisfaction of the confirmation requirements, PROVIDED, HOWEVER, that
the Debtors shall not reduce the distributions to Classes 1, 2, 3, 4, 5, 6, 7,
10 or 11, nor increase the distributions to any Class without the consent of the
Creditors' Committee. SEE ALSO Sections VII. B. and E. of this Disclosure
Statement.
E. PROCEDURE FOR RESOLVING DISPUTED CLAIMS
CLAIMS GENERALLY. The amount of any Allowed Unimpaired Claim including
the rights, if any, of the Holder of any such Claim that has properly Filed a
proof of Claim on or prior to the Bar Date, or any other date determined by the
Bankruptcy Court with respect to such Claim, to payment thereof shall (a) be
determined, (i) in the event no objection to, or request for estimation with
respect to, such Claim is Filed in accordance with Section 8.3 of the Plan, by
any court of competent jurisdiction other than the Bankruptcy Court in the
manner in which the amount of such Claim and the rights of the Holder of such
Claim would have been resolved and adjudicated if the Chapter 11 Cases had not
been commenced or (ii) in the event that an objection to, or request for
estimation with respect to, such Claim is Filed in accordance with Section 8.3
of the Plan, by the Bankruptcy Court, (b) except as otherwise provided in
Section 8.1(a)(ii) of the Plan, survive the Effective Date and consummation of
the Plan as if the Chapter 11 Cases had not been commenced, and (c) not be
discharged pursuant to Section 1141 of the Bankruptcy Code. In order to carry
out the foregoing provisions of the Plan, the Debtors, Reorganized PHI and the
Holders of Unimpaired Claims that have properly Filed a proof of Claim on or
before the Bar Date, shall have, among other rights and obligations, the
following rights and obligations:
a. Except to the extent that an objection to, or a request
for estimation with respect to an Unimpaired Claim has been Filed in accordance
with Section 8.3 of the Plan, the Holder of such Claim shall be entitled, after
the Effective Date, to commence any action or proceeding against Reorganized
PHI, or to continue any action or proceeding against any of the Debtors, to
determine the amount of its Claim in any court of competent jurisdiction.
b. The Debtors or Reorganized PHI, as the case may be, may
at any time before or after the Confirmation Date and before or after the
Effective Date, dispute, defend against or otherwise oppose, in accordance with
bankruptcy and/or nonbankruptcy law, any such Unimpaired Claim (other than any
such Claim to the extent allowed by Final Order of the Bankruptcy Court or the
Confirmation Order) without taking any formal action either in or out of court
(except as otherwise required by bankruptcy or nonbankruptcy law). Reorganized
PHI shall retain, in addition to all claims, rights, and causes of action
retained by Reorganized PHI pursuant to Section 14.5 of the Plan, all defenses,
at law or in equity, to any and all such Unimpaired Claims (other than any such
Claim to the extent allowed by Final Order of the Bankruptcy Court or the
Confirmation Order).
REJECTION CLAIMS. Any Rejection Claim not barred pursuant to the
provisions of Section 9.2 of the Plan will be an Allowed Claim in the amount set
forth in the Filed proof of Claim evidencing such Claim unless an objection is
Filed to such Claim not later than sixty (60) days after the Effective Date or
such later time ordered by the Bankruptcy Court without need for notice and
hearing. Upon the Filing of any such objection, the amount of the Allowed
Rejection Claim, if any, will be determined by the Bankruptcy Court unless it
will have sooner become an Allowed Claim.
DISPUTED CLAIMS. The amount of any Claim which is a Disputed Claim and
the rights of the Holder of such Claim, if any, to payment in respect thereof
will be determined by the Bankruptcy Court, unless it will have sooner become an
Allowed Claim. Unless otherwise ordered by the Bankruptcy Court, all objections
to Claims (other than as provided in Section 4.1 of the Plan) and Interests will
be Filed and served upon the Holder of such Claim or Interest no later than
sixty (60) days after the Effective Date; PROVIDED, HOWEVER, that, unless
otherwise ordered by the Bankruptcy Court, any of the Debtors, or Reorganized
PHI will be entitled to File an objection to any Claim Filed after the Bar Date,
including, without limitation, any Claim Filed by a governmental unit pursuant
to Section 502(b)(9) of the Bankruptcy Code, on or prior to the later of (i)
sixty (60) days after the Effective Date and (ii) sixty (60) days after the
service of such Claim on any of the Debtors or Reorganized PHI.
AUTHORITY TO OPPOSE CLAIMS. On and after the Effective Date, except as
the Bankruptcy Court may otherwise order, Reorganized PHI will have the
exclusive right to make, prosecute and settle any objections to Claims or
Interests.
TREATMENT OF DISPUTED CLAIMS AND DISPUTED INTERESTS. Notwithstanding
any other provisions of the Plan, no payments or distributions will be made on
account of a Disputed Claim or Interest until such Claim or Interest becomes an
Allowed Claim or an Allowed Interest, as the case may be.
F. EXECUTORY CONTRACTS
GENERAL TREATMENT. If the Effective Date occurs, all executory
contracts and unexpired leases of the Debtors, designated by the Debtors for
assumption at or prior to the Confirmation Date will be assumed by Reorganized
PHI or the applicable other Reorganized Debtor as of the Confirmation Date. All
other executory contracts and unexpired leases will be deemed rejected as of the
Confirmation Date.
BAR TO REJECTION DAMAGES. If the rejection of an executory contract or
unexpired lease by the Debtors results in damages to the other party or parties
to such contract or lease, a Claim for such damages, if not previously evidenced
by a Filed proof of Claim or barred by a Final Order, will be forever barred and
will not be enforceable against the Debtors, Reorganized PHI, the other
Reorganized Debtors or their properties or agents, successors, or assigns,
unless a proof of Claim relating thereto is filed with the Bankruptcy Court
within thirty (30) days after the later of (i) the entry of a Final Order
authorizing such rejection and (ii) the Effective Date, or within such shorter
period as may be ordered by the Bankruptcy Court.
CURE OF DEFAULTS FOR EXECUTORY CONTRACTS AND UNEXPIRED LEASES. Each
executory contract and unexpired lease to be assumed pursuant to the Plan will
be reinstated and rendered unimpaired in accordance with Sections 1124(2) and
365(b)(1) of the Bankruptcy Code, or in accordance with the applicable Landlord
Settlement Agreement or any other agreement that is approved by the Bankruptcy
Court. In connection therewith, the Debtors will cure or provide adequate
assurance that they will cure any monetary default (other than of the kind
specified in Section 365(b)(2) of the Bankruptcy Code), by payment of the
default amount in Cash on the Effective Date (or on such other terms as the
parties to such executory contract or unexpired lease may otherwise agree),
compensate, or provide adequate assurance that the Debtors will promptly
compensate parties other than the Debtors to such contract or lease for any
actual pecuniary loss to such parties resulting from such default, and provide
adequate assurance of future performance under such contract or lease. In the
event of a dispute regarding: (i) the amount of any cure payments; (ii) the
ability of Reorganized PHI, the other Reorganized Debtors or any of their
assignees to provide "adequate assurance of future performance" (within the
meaning of Section 365 of the Bankruptcy Code) under the contract or lease to be
assumed; or (iii) any other matter pertaining to assumption, the cure payments
or performance required by Section 365(b)(1) of the Bankruptcy Code will be made
following the entry of a Final Order resolving the dispute and approving the
assumption.
G. CONDITIONS TO CONFIRMATION AND THE OCCURRENCE OF THE EFFECTIVE DATE
CONDITIONS TO CONFIRMATION. Confirmation of the Plan is conditioned
upon the occurrence of the following, or waiver of the following, conditions
jointly by the Debtors and the Creditors' Committee:
(a) PHI shall have Filed with the Bankruptcy Court a
fully-executed agreement with the New Money Investors for the acquisition of New
Class B Common Stock on terms consistent with the Plan;
(b) PHI shall have Filed with the Bankruptcy Court a
fully-executed agreement for the acquisition by Bay Harbour Management L.C. or
one or more third parties of the New Senior Secured Notes for up to $25 million
on terms consistent with the Plan, or evidence of other financing as necessary
to implement the Plan on terms acceptable to the Debtors and the Creditors'
Committee;
(c) The Plan shall have been accepted by not less than
two-thirds in amount and a majority in number of the Holders of the Claims in
Class 5 (Old Senior Subordinated Notes) entitled to vote and that do vote on the
Plan;
(d) A Confirmation Order in form and substance acceptable to
the Debtors and the Creditors' Committee shall have been Filed with and signed
by the Bankruptcy Court; and
(e) No material alterations to the Plan as Filed shall be
required by the Bankruptcy Court unless consented to by the Debtors.
CONDITIONS TO THE OCCURRENCE OF THE EFFECTIVE DATE. The Plan shall not
be consummated and the Effective Date shall not occur unless and until each of
the following conditions have been satisfied or, if waivable, waived jointly by
the Debtors and the Creditors' Committee:
(a) All fees payable pursuant to Section 1930 of Title 28 of
the United States Code, as determined by the Bankruptcy Court at the
Confirmation Hearing, shall have been paid;
(b) The provisions of the Plan and all exhibits thereto
shall be reasonably satisfactory to the Debtors and the Creditors' Committee;
(c) The Confirmation Order shall have become a Final Order;
(d) The Effective Date shall have occurred no later than
February 29, 2000; and
(e) All actions and documents necessary to implement the
provisions of the Plan shall have been effected, executed or duly provided for
in a manner reasonably satisfactory to the Debtors and the Creditors' Committee.
H. EFFECTS OF CONFIRMATION AND EFFECTIVENESS OF PLAN
DISCHARGE OF CLAIMS. Except as otherwise provided in the Plan or in the
Confirmation Order, on the Effective Date: (i) the rights afforded in the Plan
and the payments and distributions to be made will discharge all existing debts
and Claims of any kind, nature, or description whatsoever against the Debtors,
any of their assets or properties or any property dealt with under the Plan to
the extent permitted by Section 1141 of the Bankruptcy Code; (ii) all existing
Claims against the Debtors will be and will be deemed to be discharged; (iii)
all obligations of the Debtors, directly or as guarantors, under the SunTrust
Agreements and the Old Senior Subordinated Notes Indenture, will be deemed
released, discharged and satisfied; and (iv) all Holders of Claims and Interests
will be precluded from asserting against the Debtors, any of their assets or
properties, or any property dealt with under the Plan, any other or further
Claim based upon any act or omission, transaction, or other activity of any kind
or nature that occurred prior to the Confirmation Date, whether or not such
Holder Filed a proof of Claim.
DISCHARGE OF DEBTORS. Except as otherwise provided in the Plan, any
consideration distributed to Creditors under the Plan will be in exchange for
and in complete satisfaction, discharge, and release of all Claims of any nature
whatsoever against the Debtors or any of their assets or properties; and, except
as otherwise provided herein, upon the Effective Date, the Debtors will be
deemed discharged and released to the extent permitted by Section 1141 of the
Bankruptcy Code from any and all Claims, including but not limited to demands
and liabilities that arose before the Confirmation Date, and all debts of the
kinds specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code,
whether or not (i) a proof of Claim based upon such debt is Filed or deemed
Filed under Section 501 of the Bankruptcy Code; or (ii) the Holder of a Claim
based upon such debt has accepted the Plan. Except as provided in the Plan or
Confirmation Order, the Confirmation Order will be a judicial determination of
discharge of all liabilities of the Debtors. As provided in Section 524 of the
Bankruptcy Code, such discharge will void any judgment against the Debtors at
any time obtained to the extent it relates to a discharged Claim, and operates
as an injunction against the commencement or continued prosecution of any action
against the Debtors, Reorganized PHI, the other Reorganized Debtors, or any of
their respective properties, to the extent it relates to a discharged Claim.
SURVIVAL OF INDEMNIFICATION CLAIMS AND OBLIGATIONS. Notwithstanding
any other provision of the Plan, existing provisions of the by-laws, the Old
Senior Subordinated Notes Indenture or other applicable laws, corporate
documents or agreements of the Debtors or any Foreign Subsidiary or Domestic
Subsidiary providing for the indemnification of current or former officers or
directors of any of the Debtors, or the Old Indenture Trustee, and all Claims of
such officers, directors or the Old Indenture Trustee, under the bylaws of such
Debtor, the Old Senior Subordinated Notes Indenture or other applicable law,
corporate documents or agreements will expressly survive Confirmation of the
Plan and be binding on and enforceable against Reorganized PHI irrespective of
whether indemnification is owed in connection with an event occurring before, on
or after the Petition Date.
TERMINATION OF CLAIMS OF CONTRACTUAL SUBORDINATION AGAINST HOLDERS OF
OLD SENIOR SUBORDINATED NOTES CLAIMS. Provided that (i) the Bankruptcy Court
shall have entered the Confirmation Order and (ii) the Effective Date shall have
occurred, all rights, actions or causes of action between or among Holders of
"senior indebtedness" (as defined in the Old Senior Subordinated Notes
Indenture) and Holders of Old Senior Subordinated Notes Claims based upon any
claimed right to contractual subordination shall be satisfied, terminated, void
and of no further force or effect as of the Effective Date so that,
notwithstanding any such rights, actions or causes of action, each Holder of Old
Senior Subordinated Notes Claims shall have the rights and benefits of the
distributions provided in the Plan.
I. RELEASES AND INJUNCTIONS
EXTENT OF RELEASE. Except as set forth in Article XII of the Plan,
nothing contained in the Plan will affect any right of any Entity to assert or
pursue any claim or cause of action against any entity other than the Debtors.
RELEASES. On the Effective Date, Reorganized PHI and the other
Reorganized Debtors are deemed to release unconditionally (i) each present or
former officer, director, shareholder, employee, consultant, financial advisor,
attorney, accountant and other representatives of the Debtors, the Domestic
Subsidiaries and the Foreign Subsidiaries; provided, however, that in no event
shall the Reorganized Debtors be deemed to have released any Releasee that
asserts a Disputed Claim against the Debtors or the Reorganized Debtors or the
Reorganized Debtors from any claim, counterclaim, defense or offset that may be
asserted in connection with such claim; (ii) the Creditors' Committee and,
solely in their capacity as members or representatives of the Creditors'
Committee each consultant, attorney, accountant or other representative or
member (and each of such member's respective officers, directors, shareholders,
employees, consultants, attorneys, accountants and other representatives) of the
Creditors' Committee, and (iii) the Holders of Old Senior Subordinated Notes
Claims that are or were at any time members of the Unofficial Noteholders'
Committee and, solely in their capacity as representatives of such Holders, each
of such Holder's respective officers, directors, shareholders, employees,
consultants, attorneys, accountants and other representatives as well as
attorneys and financial advisors to the Unofficial Noteholders' Committee and
their officers, directors, shareholders and employees (the Entities specified in
clauses (i), (ii) and (iii) are referred to collectively as the "Releasees"),
from any and all claims, obligations, suits, judgments, damages, rights, causes
of action and liabilities whatsoever, whether known or unknown, foreseen or
unforeseen, existing or hereafter arising, in law, equity or otherwise, based in
whole or in part upon any act or omission, transaction, event or other
occurrence taking place on or prior to the Effective Date in any way relating to
the Chapter 11 Cases or the Plan, except that no Releasees shall be released
from acts or omissions which are the result of gross negligence or willful
misconduct.
On the Effective Date, each Holder of a Claim or Interest is deemed to
have released unconditionally, the Releasees, from any and all rights, claims,
causes of action, obligations, suits, judgments, damages and liabilities
whatsoever which any such Holder may be entitled to assert, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity
or otherwise, based in whole or in part upon any act or omission, transaction,
event or other occurrence taking place on or before the Effective Date in any
way relating to Reorganized PHI, the other Reorganized Debtors, the Chapter 11
Cases or the Plan, except that no Releasees shall be released from acts or
omissions which are the result of gross negligence or willful misconduct.
If and to the extent that the Bankruptcy Court concludes that the Plan
cannot be confirmed with any portion of the foregoing releases, then the Debtors
reserve the right to amend the Plan so as to give effect as much as possible to
the foregoing releases, or to delete them.
NO LIABILITY FOR SOLICITATION OR PARTICIPATION. As specified in
Section 1125(e) of the Bankruptcy Code, Entities that solicit acceptances or
rejections of the Plan and/or that participate in the offer, issuance, sale or
purchase of securities offered or sold under the Plan, in good faith and in
compliance with the applicable provisions of the Bankruptcy Code, are not
liable, on account of such solicitation or participation, for violation of any
applicable law, rule or regulation governing the solicitation of acceptances or
rejections of the Plan or the offer, issuance, sale or purchase of securities in
connection therewith.
LIMITATION OF LIABILITY. Neither the Debtors, Reorganized PHI, the
other Reorganized Debtors, nor any of their respective employees, officers,
directors, agents, or representatives, nor any Professionals employed by any of
them, nor the Creditors' Committee or any of its members, agents,
representatives, or professional advisors, will have or incur any liability to
any Entity for any act taken or omission made in good faith in connection with
or related to formulating, implementing, confirming or consummating the Plan, or
any contract, instrument, release, or other agreement or document created in
connection with the Plan.
GENERAL INJUNCTION. Except as provided in the Plan or in the Confirmation Order,
from and after the Effective Date, all Entities who received or are Holders of
Plan Securities and all Holders of Claims against or Interests in the Estates
will be permanently restrained and enjoined after the Confirmation Date (i) from
commencing, continuing, or taking any act, to enforce against any of the Debtors
or any Subsidiary or any officer, director or employee of any of the Debtors any
right, claim or cause of action arising under or related to any Old Security or
any claim (ii) from creating, perfecting or enforcing any encumbrance of any
kind against any Debtor or any Subsidiary or any right, claim or cause of action
arising under or related to any Old Security or any claim, (iii) from asserting
any setoff, right of subrogation, indemnification, contribution or recoupment of
any kind against any obligation due any Debtor or any Subsidiary, or any right,
claim or cause of action arising under or related to any Old Security or any
claim, and (iv) from performing any act, in any manner, in any place whatsoever,
that does not conform to or comply with the provisions of the Plan and orders of
the Bankruptcy Court; PROVIDED, HOWEVER, that each Holder of a Claim or Interest
may, to the extent permitted by and in accordance with the provisions of the
Plan, commence or continue any action or proceeding to determine the amount of
its Claim or Interest in the Bankruptcy Court or any other court of competent
jurisdiction, and all Holders of Claims or Interests will be entitled to enforce
their rights under the Plan and the Plan Documents; PROVIDED FURTHER, HOWEVER,
that nothing herein shall restrain and enjoin all Entities who received or are
Holders of Plan Securities and all Holders of Claims against or Interests in the
Estates from taking any action to enforce liability arising from acts or
omissions which are the result of gross negligence or willful misconduct.
SECTION 346 INJUNCTION. In accordance with Section 346 of the
Bankruptcy Code, for purposes of any state or local law imposing a tax, income
will not be realized by the Estates, the Debtors or Reorganized PHI by reason of
the forgiveness or discharge of indebtedness resulting from the Chapter 11
Cases. As a result each state or local taxing authority is permanently enjoined
and restrained, after the Confirmation Date, from commencing, continuing or
taking any act to impose, collect or recover in any manner any tax against any
Debtor, Reorganized PHI or the other Reorganized Debtor, arising by reason of
the forgiveness or discharge of indebtedness of any such Entity under the Plan.
J. RETENTION OF JURISDICTION
SCOPE OF JURISDICTION. Pursuant to Sections 1334 and 157 of Title 28
of the United States Code, notwithstanding occurrence of the Effective Date or
substantial consummation of the Plan, the Bankruptcy Court will retain and have
jurisdiction from and after the Confirmation Date of all matters arising in,
arising under, and related to the Chapter 11 Cases and the Plan pursuant to, and
for the purposes of, Sections 105(a) and 1142 of the Bankruptcy Code and for,
among other things, the following purposes:
(a) To hear and determine any and all adversary proceedings,
applications or contested matters pending on the Effective Date or brought after
the Effective Date including, but not limited to, Avoidance Actions, if any;
(b) To hear and determine any and all applications for substantial
contribution and for compensation and reimbursement of expenses Filed in
accordance with the Plan;
(c) To hear and determine Rejection Claims, disputes arising from the
assumption and assignment of executory contracts and unexpired leases, and
Disputed Claims which are Impaired Claims or which are held by Holders of
Unimpaired Claims;
(d) To hear and determine, pursuant to the provisions of Section 505
of the Bankruptcy Code, all issues related to the liability of a Debtor for any
tax incurred prior to the Effective Date;
(e) To enforce the provisions of the Plan and to determine any and all
disputes under the Plan;
(f) To enter and implement such orders as may be appropriate in the
event Confirmation is for any reason stayed, reversed, revoked, modified or
vacated;
(g) To modify any provision of the Plan to the extent permitted by the
Bankruptcy Code and to correct any defect, cure any omission or reconcile any
inconsistency in the Plan or the Confirmation Order as may be necessary to carry
out the purposes and intent of the Plan;
(h) To enter such orders as may be necessary or appropriate in
furtherance of consummation and implementation of the Plan;
(i) To determine the allowance of Claims and Interests as provided in
the Plan; and
(j) To enter an order closing the Chapter 11 Cases.
FAILURE OF THE BANKRUPTCY COURT TO EXERCISE JURISDICTION. If the
Bankruptcy Court abstains from exercising, or declines to exercise, jurisdiction
or is otherwise without jurisdiction over any matter arising in, arising under,
or related to the Chapter 11 Cases, Article XIII of the Plan will have no effect
upon and shall not control, prohibit, or limit the exercise of jurisdiction by
any other court having jurisdiction with respect to such matter.
K. MISCELLANEOUS PROVISIONS
COMPLIANCE WITH TAX REQUIREMENTS. In connection with the Plan, the
Debtors, Reorganized PHI, the other Reorganized Debtors, the Collateral Agent,
and the Old Indenture Trustee will comply with all applicable withholding and
reporting requirements imposed by federal, state, local and foreign taxing
authorities, and all distributions made under the Plan will be subject to such
withholding and reporting requirements. Creditors may be required to provide
certain tax information as a condition to receipt of distributions pursuant to
the Plan. Notwithstanding any other provision of the Plan, each Entity receiving
a distribution pursuant to the Plan will have sole and exclusive responsibility
for the satisfaction and payment of any tax obligations imposed by any
governmental unit, including income, withholding and other tax obligations, on
account of such distribution.
DISCHARGE OF OLD INDENTURE TRUSTEE. Subsequent to the performance of
the Old Indenture Trustee, or its agents, of their duties and obligations under
the provisions of the Plan and the Confirmation Order, if any, and under the
terms of the Old Senior Subordinated Notes Indenture, such Old Indenture Trustee
and its agents will be relieved, discharged and released from all obligations,
claims, rights, demands and causes of action associated with or arising from
such Old Senior Subordinated Notes Indenture. The Confirmation Order will enjoin
from and after the Effective Date the prosecution, whether directly,
derivatively or otherwise, of any claim, debt, right, cause of action or
liability against the Old Indenture Trustee and its agents released or to be
released pursuant to the Plan.
POST-EFFECTIVE DATE FEES AND EXPENSES OF PROFESSIONALS. Reorganized
PHI will, in the ordinary course of business and without the necessity for any
approval by the Bankruptcy Court (except as may be required by Section
1129(a)(4) of the Bankruptcy Code), pay the reasonable fees and reasonable
expenses of the Professionals related to implementation and consummation of the
Plan that are incurred after the Effective Date; PROVIDED, HOWEVER, that no such
fees and expenses will be paid except upon receipt by Reorganized PHI of a
detailed written invoice from the Professional seeking compensation and expense
reimbursement and PROVIDED, FURTHER, HOWEVER, that Reorganized PHI may, within
ten (10) Business Days after receipt of an invoice for fees and expenses, object
to some or all of any such invoice, and if the dispute cannot be resolved with
the Professional seeking compensation, then either party may request that the
Bankruptcy Court determine the reasonableness of such fees and expenses.
VESTING OF PROPERTY OF THE DEBTORS. Except as otherwise provided in
the Plan (including any Plan Document) or any other indentures, instruments or
agreements to be executed and delivered pursuant to the Plan or the Confirmation
Order, upon the Effective Date, all property of the Consolidated Estates,
wherever situated, will vest in Reorganized PHI or the other Reorganized
Debtors, as applicable, and will be retained by Reorganized PHI or the other
Reorganized Debtors, as applicable, or distributed to Creditors or Interest
Holders as provided in the Plan. On the Effective Date, all property of the
Consolidated Estates, whether retained by Reorganized PHI or the other
Reorganized Debtors, as applicable, or distributed to Creditors or Interest
Holders, will be free and clear of all Claims, Liens, Encumbrances and
Interests, except the Claims, Liens, Encumbrances and Interests of Creditors and
Holders of Interests expressly provided for in the Plan (including in any Plan
Document).
CAUSES OF ACTION. Except as otherwise provided in the Plan, or in any
contract, instrument, release, or other agreement entered into in connection
with the Plan, in accordance with Section 1123(b) of the Bankruptcy Code,
Reorganized PHI will retain and may enforce any Avoidance Actions or any claims,
rights and causes of action that any of the Consolidated Debtors or the
Consolidated Estates may hold against any entity. Reorganized PHI or any
successor may pursue those rights of action, as appropriate, in accordance with
what is in the best interests of Reorganized PHI or any successor holding such
rights of action.
OTHER DOCUMENTS AND ACTIONS. Without a further order of the Bankruptcy
Court, the Debtors and Reorganized PHI may execute such documents and take such
other action as is necessary to effectuate the transactions provided for in the
Plan.
BINDING EFFECT From and after the Confirmation Date, the Plan will be
binding upon and inure to the benefit of the Reorganized Debtors, Holders of
Claims, Holders of Interests, and their respective successors and assigns.
DISSOLUTION OF CREDITORS' COMMITTEE. On the Effective Date, the
Creditors' Committee shall dissolve and the members of the Creditors' Committee
will be released and discharged from all further rights and duties arising from
or related to the Chapter 11 Cases and the Professionals retained by the
Creditors' Committee and the members thereof shall not be entitled to
compensation or reimbursement of expenses for any services rendered after the
Effective Date.
AMENDMENTS AND MODIFICATIONS.
(a) The Debtors may, with the consent of the Creditors'
Committee and in accordance with Section 1127(a) of the Bankruptcy Code amend or
modify the Plan prior to the entry of the Confirmation Order. Prior notice of
such action will be served in accordance with the Bankruptcy Rules.
(b) After the entry of the Confirmation Order, PHI may, with
the consent of the Creditors' Committee and in accordance with Section 1127(b)
of the Bankruptcy Code, amend or modify this Plan, or remedy any defect or
omission or reconcile any inconsistency in the Plan in such manner as may be
necessary to carry out the purpose and intent of the Plan, and after the
Effective Date the parties to any Plan Document may amend or modify any such
Plan Document pursuant to the terms thereof without notice to any Entity not
entitled to receive notice under such Plan Document and without an order from
the Bankruptcy Court.
REVOCATION. The Debtors reserve the right to revoke and withdraw the
Plan prior to Confirmation. If the Debtors revoke or withdraw the Plan in
accordance with Section 14.14 of the Plan then the Plan shall be deemed null and
void. In that event, nothing contained in the Plan or herein shall be deemed (i)
to constitute a waiver or release of any Claims by the Debtors or any other
Entity, (ii) to prejudice in any manner the rights of the Debtors or any other
Entity, (iii) to constitute any admission by any of the Debtors, or any other
Entity, or (iv) to constitute any admission or concession regarding any Claim or
Interest.
SEVERABILITY. Should any provision in the Plan be determined to be
unenforceable, with the consent of the Debtors or Reorganized PHI, as
applicable, such provisions shall be deemed to be severed, and such
determination will in no way limit or affect the enforceability and operative
effect of any other provisions of the Plan.
DE MINIMIS DISTRIBUTIONS. Notwithstanding any provision to the
contrary in the Plan, no distribution of less than twenty-five dollars ($25) in
Cash or less than 100 shares of New Common Stock or 10 New Warrants or New
Options shall be made to any Holder of an Allowed Claim or an Allowed Interest.
Such undistributed amount will be retained by Reorganized PHI, and in the case
of undistributed New Common Stock, held as treasury shares.
IX. CERTAIN RISK FACTORS
In considering whether or not to accept the Plan, Holders of Claims
and Interests should carefully consider the following factors, together with all
of the other information contained in this Disclosure Statement.
THE NEW SENIOR SECURED NOTES, THE NEW SECURED PIK NOTES, THE NEW
COMMON STOCK AND THE NEW WARRANTS TO BE ISSUED PURSUANT TO THE PLAN ARE SUBJECT
TO A NUMBER OF MATERIAL RISKS, INCLUDING THOSE ENUMERATED BELOW. THE RISK
FACTORS ENUMERATED BELOW GENERALLY ASSUME THE CONFIRMATION AND CONSUMMATION OF
THE PLAN AND ALL TRANSACTIONS CONTEMPLATED THEREBY, AND, EXCEPT AS INDICATED, DO
NOT GENERALLY INCLUDE MATTERS THAT COULD PREVENT OR DELAY CONFIRMATION. PRIOR TO
DECIDING WHETHER AND HOW TO VOTE ON THE PLAN, EACH HOLDER OF A CLAIM OR INTEREST
IN AN IMPAIRED VOTING CLASS SHOULD CAREFULLY CONSIDER ALL OF THE INFORMATION
CONTAINED IN THIS DISCLOSURE STATEMENT, ESPECIALLY THE FACTORS MENTIONED IN THE
FOLLOWING PARAGRAPHS.
HIGHLY LEVERAGED POSITION
The Company is now highly leveraged and although the reorganization
will significantly reduce the Company's debt obligations, the Company will still
have substantial indebtedness and debt service requirements, both in absolute
terms and in relation to shareholders' equity.
The Company's management believes that, based on its forecasts, the
Company will have sufficient operating cash flow from operations (together with
funds available under a working capital and letter of credit bank facility) to
pay interest and scheduled amortization on all of its outstanding indebtedness
and to fund anticipated capital expenditures through 2004, after giving effect
to the reorganization. However, even if the reorganization is completed, the
Company's ability to meet its debt service obligations will depend on a number
of factors, including management's ability to maintain operating cash flow, and
there can be no assurance that targeted levels of operating cash flow will
actually be achieved. The Company's ability to maintain or increase operating
cash flow will depend upon consumer tastes, the success of marketing initiatives
and other efforts by the Company to increase customer traffic in its
restaurants, prevailing economic conditions and other factors, many of which are
beyond the control of the Company.
The Company's highly leveraged position may limit its ability to
obtain additional financing in the future on terms and subject to conditions
deemed acceptable by Company management. Even after the reorganization, a
substantial portion of its cash flow from operations must be dedicated to the
payment of interest and principal on outstanding debt. The agreements governing
that debt will impose significant operating and financial restrictions on the
Company. Based on the Projections, the Company will be required to re-finance
approximately $37 million of the New Secured PIK Notes in 2004. Its highly
leveraged position may limit its ability to do so on acceptable terms.
RISKS RELATING TO THE EXIT FACILITIES
Pending the sale of its 1567 Broadway property interests, the Company
will require the proceeds from the New Senior Secured Notes to fund its
obligations under the Plan (the "Exit Financing"). Consummation of Exit
Financing is regarded as critical to the successful emergence of the Debtors
from the Chapter 11 Cases and to their operations thereafter. The closing of
such facility, however, is subject, among other conditions, to the negotiation
of definitive agreements with Bay Harbour Management L.C., or one or more
third-party lenders on terms acceptable to the lender(s), the Debtors and the
Creditors' Committee. In addition, the Debtors may require up to a $15 million
Working Capital Facility upon emergence. The closing of such facility is subject
to the negotiation of definitive agreements with one or more third-party lenders
on terms acceptable to the lender(s), the Debtors and the Creditors' Committee.
RISKS RELATING TO THE PROJECTIONS
The management of PHI has prepared the projected financial information
contained in this Disclosure Statement relating to the Reorganized Debtors (the
"Projections") in connection with the development of the Plan and in order to
present the anticipated effects of the Plan and the transactions contemplated
thereby. The Projections assume the Plan and the transactions contemplated
thereby will be implemented in accordance with their terms and represent
management's best estimate of the results of the Reorganized Debtors' operations
following the Effective Date. The assumptions and estimates underlying such
Projections are inherently uncertain and, although considered reasonable by
management as of the date hereof, are subject to significant business, economic
and competitive risks and uncertainties that could cause actual results to
differ materially from those projected, including, among others, (1) the
uncertain ability of the Reorganized Debtors to generate sufficient funds or to
gain access to additional capital, if needed, to meet their capital expenditure
and refinancing needs; (2) seasonality; (3) the possible effects that
commencement of the Reorganization Cases, even in connection with the Plan, may
have on the Company's relationships with its customers, suppliers, employees and
franchisees. Accordingly, the Projections are not necessarily indicative of the
future financial condition or results of operations of the Reorganized Debtors.
Consequently, the projected financial information contained herein should not be
regarded as a representation by the Company, the Company's advisors or any other
person that the Projections can or will be achieved.
COMPETITION IN THE RESTAURANT INDUSTRY
The restaurant and retail merchandising industries are affected by
changes in consumer tastes and by international, national, regional and local
economic conditions and demographic trends. Discretionary spending priorities,
traffic patterns, tourist travel, weather conditions, employee availability and
the type, number and location of competing restaurants, among other factors,
also directly affect the performance of the Company's units. Changes in any of
these factors in the markets where the Company currently operates units could
adversely affect the Company's results of operations. Moreover, the theme
restaurant industry is relatively young, is particularly dependent on tourism
and has seen the entrance of a number of new competitors.
The restaurant and retail merchandising industries are highly
competitive based on the type, quality and selection of the food or merchandise
offered, price, service, location and other factors. Many well-established
companies with greater financial, marketing and other resources and longer
operating histories than the Company compete with the Company in many markets.
In addition, some competitors have design and operating concepts similar to
those of the Company. There can be no assurance that the Company will be able to
respond to various competitive factors affecting the restaurant and retail
industries.
The motion picture exhibition industry is affected by a number of
factors, including the availability of desirable motion pictures and their
performance in the exhibitors' markets. Poor performance of, or disruption in
the production of or access to, motion pictures, whether produced by the major
studios or independent producers, could adversely affect the performance of the
PLANET MOVIES BY AMC joint venture. In addition, were the joint venture to
experience poor relationships with one or more major motion picture
distributors, its business could be adversely affected. The joint venture will
be subject to varying degrees of competition with respect to licensing films,
attracting patrons, obtaining new theater sites and acquiring theater circuits.
In addition, the joint venture's theaters face competition from a number of
motion picture exhibition delivery systems, such as pay television, pay-per-view
and home video systems, and from other forms of entertainment that compete for
the public's leisure time and disposable income.
CAPITAL REQUIREMENTS
The Reorganized Debtors' businesses are expected to have substantial
capital expenditure needs. While the Projections assume that the Reorganized
Debtors will generate sufficient funds to meet their capital expenditure needs
for the foreseeable future, the ability of the Reorganized Debtors to gain
access to additional capital, if needed, cannot be assured, particularly in view
of competitive factors and industry conditions.
DIVIDEND RESTRICTIONS
PHI has never paid dividends on its Common Stock and does not intend
to do so in the foreseeable future. In addition, instruments governing
indebtedness of the Reorganized Debtors following consummation of the Plan will
restrict the ability of the Reorganized Debtors to pay dividends. Accordingly,
it is not anticipated that any cash dividends will be paid on the New Common
Stock in the foreseeable future.
CERTAIN RISKS OF NON-CONFIRMATION
Even if the requisite acceptances are received, there can be no
assurance that the Bankruptcy Court will confirm the Plan. A non-accepting
Creditor or a stockholder might challenge the adequacy of the disclosure or the
balloting procedures and results as not being in compliance with the Bankruptcy
Code. Even if the Bankruptcy Court were to determine that the disclosure and the
balloting procedures and results were appropriate, the Bankruptcy Court could
still decline to confirm the Plan if it were to find that any statutory
conditions to confirmation had not been met. In this regard, there is a risk
that if the Bankruptcy Court were to determine that certain third party release
provisions of the Plan contravene applicable provisions of the Bankruptcy Code,
the Bankruptcy Court could determine not to confirm the Plan. Section 1129 of
the Bankruptcy Code sets forth the requirements for confirmation and requires,
among other things, a finding by the Bankruptcy Court that the confirmation of
the Plan is not likely to be followed by a liquidation or a need for further
financial reorganization and that the value of distributions to non-accepting
Creditors and Interest Holders will not be less than the value of distributions
such Creditors and Interest Holders would receive if the Debtors were liquidated
under Chapter 7 of the Bankruptcy Code. While there can be no assurance that the
Bankruptcy Court will conclude that these requirements have been met, the
Debtors believe that the Plan will not be followed by a need for further
financial reorganization and that non-accepting Creditors and Interest Holders
will receive greater distributions than they would receive following a
liquidation pursuant to Chapter 7 of the Bankruptcy Code.
Additionally, December 13, 1999 is the Bar Date for certain
non-governmental Claims to be filed against the Debtors. The Debtors have given
extensive notice through direct mailings and world-wide publication of the
pendency of these Chapter 11 Cases and of the Bar Date for Claims. While the
Debtors believe that they have an adequate grasp of all Claims likely to be
asserted prior to the Bar Date, it is possible that Claims exist or will be
asserted of which the Debtors are unaware. In addition, certain Claims will be
asserted in amounts which are disputed or unliquidated, and which may far exceed
the levels at which the Debtors believe they should be Allowed. The Claims of
AEA described in more detail in Section III. E. of this Disclosure Statement are
a case in point. Nonetheless, the Debtors have taken and will take aggressive
action to liquidate such Claims to an appropriate level, and as of now, with the
exception of AEA, are aware of no Claims that would materially adversely affect
the Plan assumptions and projections.
The confirmation and consummation of the Plan are also subject to
certain other conditions. See "The Plan of Reorganization-Conditions Precedent
to Confirmation and Consummation of the Plan."
If the Plan, or a plan determined not to require resolicitation of any
Classes by the Bankruptcy Court, were not to be confirmed, it is unclear whether
a reorganization could be implemented and what holders of Claims and Interests
would ultimately receive with respect to their Claims and Interests. If an
alternative reorganization could not be agreed to, it is possible that the
Debtors would have to liquidate their assets, in which case it is likely that
Holders of Claims and Interests would receive less than they would have received
pursuant to the Plan. Alternatively, there could be significant delays in the
development of an alternative plan, which could materially adversely impact the
recoveries for Creditors due to potential continuing declines in revenues
caused, in part, by the continuation of these bankruptcy proceedings and delays
in the infusion of new working capital.
NONCOMPARABILITY OF HISTORICAL FINANCIAL INFORMATION
As a result of the consummation of the Plan and the transactions
contemplated thereby, the financial condition and results of operations of the
Reorganized Debtors from and after the Effective Date may not be comparable to
the financial condition or results of operations reflected in the historical
financial statements of the Debtors.
SEASONALITY
The Company's business is moderately seasonal Restaurant sales are
generally greater in the second and third calendar quarters (April through
September) than in the first and fourth calendar quarters (October through
March). Occupancy and other operating costs, which remain relatively constant,
have a disproportionately negative effect on operating results during quarters
with lower restaurant sales. The Company's working capital requirements also
fluctuate seasonally, with its greatest needs occurring during its first and
fourth quarters.
GOVERNMENT REGULATIONS
The Company and its franchisees are subject to federal, state and
local laws and regulations governing health, sanitation, environmental matters,
safety, the sale of alcoholic beverages and hiring and employment practices.
Restaurant operations are also subject to federal and state laws that prohibit
discrimination and laws regulating the design and operation of facilities, such
as the Americans With Disabilities Act of 1990. The operation of the Company's
franchisee system is also subject to the regulations enacted by the governments
of numerous foreign countries. The Company cannot predict the effect on its
operations, particularly on its relationship with franchisees, caused by the
future enactment of additional legislation regulating the franchise
relationship.
LACK OF ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN
If the Plan is not confirmed, and if the Debtors' exclusive period to
File a plan is terminated or expires, the Debtors or any other party in interest
could attempt to formulate and propose a different plan. Such plan might involve
either a reorganization and continuation of the Debtors' business or an orderly
liquidation. The Debtors have explored various alternatives to the Plan prior to
and in connection with their extensive negotiations with the Unofficial
Noteholders' Committee. The Debtors have concluded that confirmation and
consummation of the Plan is the best alternative and will enable the Holders of
Claims and Interests to obtain the maximum value possible.
It is unclear whether any alternative plan of reorganization could be
implemented and what amounts, if any, Holders of Claims and Interests would
ultimately recover under an alternative plan. It is clear to the Debtors,
however, that any successful restructuring of their business must be premised
upon the continued operation of the Debtors' core PLANET HOLLYWOOD restaurant
and retail merchandise locations with the continued involvement of Mr. Robert
Earl as the Reorganized Debtors' Chief Executive Officer.
The failure of Mr. Earl to remain as the Company's Chief Executive
Officer constitutes a material breach under the terms and conditions of the
Debtors' contracts with certain of its key landlords, which would cause such
agreements to be terminated. Further, the Debtors believe that the significant
amount of good will associated with the PLANET HOLLYWOOD name and intellectual
property and the theme ambience of the Company's units would be substantially
adversely impacted if Mr. Earl no longer served in his top executive capacity.
Historically, an important component of the Company's marketing and
consumer awareness strategy has been to promote its operating units and branded
apparel through the active participation of Celebrities and Celebrity
stockholders. While certain Celebrities have granted the Company the right to
use their name, approved likeness and Memorabilia in connection with promoting
the Company's units, it is the Debtors' belief that without Robert Earl's
involvement the Celebrity support which has been so critical for the Company
will evaporate.
An alternative plan or plans of reorganization which does not have the
support of Robert Earl and maintain his key role in the Company's operations is
likely to result in the Debtors having to liquidate their assets under chapter 7
of the Bankruptcy Code, in which case it is likely that Holders of Claims and
Interests would receive less than they will receive pursuant to the Plan.
SECURITIES LAW CONSIDERATIONS
The Company has not filed a registration statement under the
Securities Act or any other federal or state securities laws with respect to any
of the Plan Securities that they may be deemed to be offering by virtue of the
Company's solicitation of acceptances of the Plan pursuant to this Disclosure
Statement. The Company is relying on Section 1145(a) of the Bankruptcy Code
("Section 1145(a)") to exempt from registration under the Securities Act and
any applicable state securities laws the offer of any Plan Securities that may
be deemed to be made pursuant to the Plan to Creditors or shareholders in
exchange for their Claims against or Interests in the Company. Generally,
Section 1145(a)(1) exempts the offer and sale of securities pursuant to a plan
of reorganization from such registration requirements if the following
conditions are satisfied: (i) the securities are issued by a debtor (or its
affiliate or successor) under a plan of reorganization; (ii) the recipients of
the securities hold a claim against, an interest in, or a claim for an
administrative expense against, the debtor; and (iii) the securities are issued
entirely in exchange for the recipient's claim against or interest in the
debtor, or are issued "principally" in such exchange and "partly for cash or
property." The Company believes that the Plan Securities issued to Holders of
Class 5 and Class 6 pursuant to the Plan will satisfy the requirements of
Section 1145(a)(1).
With respect to Plan Securities issued to the New Money Investors, or
to a purchaser of the New Senior Secured Notes that is not exchanging Claims for
such securities, the Company does not rely on Section 1145 for an initial
exemption from registration, but rather intends to utilize a private placement
exemption provided by Section 4(2) of the Securities Act.
Recipients of Plan Securities issued in reliance upon the exemption
provided under Section 4(2) of the Securities Act should be advised that until
the Shelf Registration is declared effective by the Commission such Plan
Securities may not be offered, sold, pledged or otherwise transferred except in
compliance with the registration requirements of the Securities Act and other
applicable securities laws, pursuant to an exemption therefrom or in a
transaction not subject thereto.
The Plan Securities issued to Holders of Class 5 and Class 6 may be
resold by the holders thereof without restriction, except for any such holder
that is deemed to be an "underwriter" with respect to the Plan Securities as
defined in Section 1145(b)(1) of the Bankruptcy Code. Generally, Section
1145(b)(1) defines an "underwriter" as any person who (i) purchases a claim
against, or an interest in, a debtor with a view towards distribution of any
security to be received in exchange for such claim or interest, (ii) offers to
sell securities issued pursuant to a bankruptcy plan for the holders of such
securities, (iii) offers to buy securities issued pursuant to a bankruptcy plan
from persons receiving such securities, if the offer to buy is made with a view
towards distribution of such securities, or (iv) is an issuer within the meaning
of Section 2(11) of the Securities Act. Section 2(11) of the Securities Act
provides that the term "issuer" includes all persons who, directly or
indirectly, through one or more intermediaries, control, are controlled by, or
are under common control with, an issuer of securities. Under Rule 405 of
Regulation C under the Securities Act, the term "control" means the possession,
direct or indirect, of the power to direct or cause the direction of the
policies of a person, whether through the ownership of voting securities, by
contract or otherwise. Accordingly, an officer or director of a reorganized
debtor (or its affiliate or successor) under a plan of reorganization may be
deemed to "control" such debtor (and therefore be an underwriter for purposes of
Section 1145), particularly if such management position is coupled with the
ownership of a significant percentage of a debtor's (or its affiliate's or
successor's) voting securities. Any entity that is an "underwriter" but not an
"issuer" with respect to an issue of securities is, however, entitled to engage
in exempt "ordinary trading transactions" within the meaning of Section
11245(b).
Holders of such securities who are deemed to be "underwriters" within
the meaning of Section 1145(b)(1) of the Bankruptcy Code or who may otherwise
be deemed to be "underwriters" of, or to exercise "control" over, the Company
within the meaning of Rule 405 of Regulation C under the Securities Act should,
assuming all other conditions of Rule 144A are met, be entitled to avail
themselves of the safe harbor resale provisions thereof. Rule 144A, promulgated
under the Securities Act, provides a non-exclusive safe harbor exemption from
the registration requirements of the Securities Act for resales to certain
"qualified institutional buyers" of securities which are "restricted securities"
within the meaning of the Securities Act, irrespective of whether the seller of
such securities purchased its securities with a view towards reselling such
securities under the provisions of Rule 144A. Under Rule 144A, a "qualified
institutional buyer" is defined to include, among other Entities (E.G.,
"dealers" registered as such pursuant to Section 15 of the Exchange Act and
"banks" as defined in Section 3(a)(2) of the Securities Act), any entity which
purchases securities for its own account or for the account of another qualified
institutional buyer and which (in the aggregate) owns and invests on a
discretionary basis at least $100 million in the securities of unaffiliated
issuers. Subject to certain qualifications, Rule 144A does not exempt the offer
or sale of securities which, at the time of their issuance, were securities of
the same class of securities then listed on a national securities exchange
(registered as such under Section 6 of the Exchange Act) or quoted in a U.S.
automated interdealer quotation system (E.G., NASDAQ).
To the extent that Rule 144A is unavailable, holders may, under
certain circumstances, be able to sell their securities pursuant to the more
limited safe harbor resale provisions of Rule 144 under the Securities Act.
Generally, Rule 144 provides that if certain conditions are met (E.G., one-year
holding period with respect to "restricted securities," volume limitations,
manner of sale, availability of current information about the issuer, etc.), (a)
any person who resells "restricted securities" and (b) any "affiliate" of the
issuer of the securities sought to be resold will not be deemed to be an
"underwriter" as defined in Section 2(11) of the Securities Act. Under paragraph
(k) of Rule 144, the aforementioned conditions to resale will no longer apply to
restricted securities sold for the account of a holder who is not an affiliate
of the Company at the time of such resale and who has not been such during the
three-month period next preceding such resale, so long as a period of at least
two years has elapsed since the later of (i) the Effective Date and (ii) the
date on which such holder acquired his or its securities from an affiliate of
the Company.
MARKET FOR PLAN SECURITIES
There is no existing market for the Plan Securities and there can be
no assurance that an active trading market for the Plan Securities will develop.
The Debtors have agreed to use their best efforts to list the New Common Stock
on a nationally recognized exchange. However, no assurance can be given that a
Holder of Plan Securities will be able to sell such Plan Securities in the
future or as to the price at which such Plan Securities might trade. The
liquidity of the market for such Plan Securities and the prices at which such
Plan Securities trade will depend upon the number of Holders thereof, the
interest of securities dealers in maintaining a market in such Plan Securities
and other factors beyond the Company's control.
X. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
The following is a summary of certain federal income tax consequences
of the Plan to the Debtors, and to the Holders of the Old Senior Subordinated
Notes, General Unsecured Claims and the Old Common Stock. This summary is based
on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations thereunder, and administrative and judicial interpretations and
practice, all as in effect on the date hereof and all of which are subject to
change, with possible retroactive effect. Due to the lack of definitive judicial
or administrative authority in a number of areas, substantial uncertainty may
exist with respect to some of the tax consequences described below. No opinion
of counsel has been obtained, and the Debtors do not intend to seek a ruling
from the Internal Revenue Service (the "Service") as to any of such tax
consequences. There can be no assurance that the Service will not challenge one
or more of the tax consequences of the Plan described below.
The following discussion is limited to Holders that hold Old Senior
Subordinated Notes, General Unsecured Claims, Old Common Stock and Plan
Securities (collectively, "Securities") as capital assets and does not address
all matters that may be relevant to particular classes of Holders that are
subject to special rules under the Code, including, without limitation,
financial institutions, securities dealers, broker-dealers, tax-exempt entities,
insurance companies, foreign persons, Holders that hold their Securities as part
of a "straddle" or a "conversion transaction" (as defined in the Code) and
Holders who acquired their stock through the exercise of an employee stock
option or otherwise acquired their stock or employee stock options as
compensation. Consequently, such Holders may be subject to special rules not
discussed below. In addition, the tax treatment of employees of the Company who
receive as compensation New Common Stock or options to acquire New Common Stock
in connection with the Plan, any restructuring of the Debtors or
post-restructuring operations of the Debtors or of any amounts paid by the
Debtors with respect to the Unofficial Noteholders' Committee Substantial
Contribution Claim, is not described below.
THIS DISCUSSION DOES NOT ADDRESS ANY TAX LAWS OTHER THAN FEDERAL
INCOME TAX LAWS. THE FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN ARE COMPLEX.
ALL HOLDERS OF ALLOWED CLAIMS AND PLAN SECURITIES SHOULD CONSULT WITH THEIR TAX
ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE PLAN AND THE
OWNERSHIP AND DISPOSITION OF PLAN SECURITIES, INCLUDING THE APPLICABILITY AND
EFFECT OF ANY FEDERAL ESTATE, STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY
CHANGE IN APPLICABLE TAX LAWS.
A. CERTAIN FEDERAL INCOME TAX CONSEQUENCES TO HOLDERS OF ALLOWED CLAIMS
1. TAX SECURITIES
The federal income tax consequences of the Plan may vary depending
upon, among other things, whether a Holder's Claim being exchanged and each of
the Plan Securities being received constitute a "security" of PHI for federal
income tax purposes (a "tax security"). Whether a debt instrument constitutes a
tax security within the meaning of federal income tax law is relevant to
determining whether and the extent to which a Holder of such a debt instrument
will recognize gain or loss in a reorganization. There is no definition of a tax
security in the Code or Treasury regulations for this purpose. Whether a debt
instrument is classified as a tax security depends on an overall evaluation of
the nature of the debt instrument at the time it is issued (or subsequently
amended), with the term of the debt instrument usually regarded as the most
important factor. Under current law, debt instruments with a five-year term or
less generally have not qualified as tax securities, whereas debt instruments
with a ten-year term or more generally have qualified as tax securities.
Further, under Treasury regulations, warrants to purchase stock of a party to a
reorganization, such as the Old Warrants and the New Warrants, are tax
securities.
The Debtors believe that it is likely, although not free from doubt,
that the Old Senior Subordinated Notes will qualify as tax securities, and this
discussion assumes they will be so treated. The New Secured PIK Notes will have
a term of five years, subject to the possibility of early redemption. The New
Senior Secured Notes will have a term of two years. The Debtors believe that the
New Secured PIK Notes may not and that the New Senior Secured Notes will not
qualify as tax securities. This discussion assumes that the New Senior Secured
Notes will not qualify as tax securities. Holders are urged to consult their tax
advisors regarding the classification of the debt instruments involved in the
Plan as tax securities and the resulting tax consequences if the Old Senior
Subordinated Notes are not treated as tax securities.
2. EXCHANGE OF OLD SENIOR SUBORDINATED NOTES FOR CASH, NEW SECURED PIK
NOTES, NEW COMMON STOCK AND POSSIBLY NEW SENIOR SECURED NOTES
Holders of Old Senior Subordinated Notes will receive its Pro Rata
share of $47.5 million Cash, $60 million principal amount of the New Secured PIK
Notes and 2.65 million shares of New Class A Common Stock under the Plan. If,
however, PHI is unable to complete an agreement in a timely manner and on
reasonable terms acceptable to it with a third-party lender to purchase the New
Senior Secured Notes, PHI may with the written consent of Holders of at least
$167 million in principal amount of the Old Senior Subordinated Notes, deliver
the New Senior Secured Notes to the Holders of the Senior Subordinated Note
Claims, in lieu of the payment of up to $25 million in Cash. In addition, the
amount of Cash and New Class A Common Stock received by the Holders will be
increased by a fee of $625,000 and 350,000 shares, respectively, to reflect a
fee that otherwise would have been payable to a third-party lender (the
principal amount of New Secured PIK Notes given as consideration remains
unchanged at $60 million). In addition, in the event a third-party lender
purchases the New Senior Secured Notes without taking some or all of the New
Class A Common Stock allocable to such lender, then the Holders of Old Senior
Subordinated Notes Claims shall receive, Pro Rata, the undistributed New Class A
Common Stock up to a total of 350,000 shares and the amount of New Secured PIK
Notes distributed shall be reduced. If the Holders of Old Senior Subordinated
Notes receive New Senior Secured Notes, the tax consequences to them may vary
depending on whether the consideration received in such circumstances is all
treated as given in exchange for the Old Senior Subordinated Notes Claims, or
the Holders are instead treated as having received, in exchange for their Old
Senior Subordinated Notes Claims, the consideration to which they otherwise
would have been entitled had there been a third-party lender and then purchased
the New Senior Secured Notes and received, as additional consideration or as a
fee in connection therewith, the additional Cash and the additional shares of
New Class A Common Stock. Except as specifically provided below, this discussion
assumes that if the Holders of Old Senior Subordinated Notes receive New Senior
Secured Notes, all the consideration received by such Holders in such
circumstances will be treated as received in exchange for their Old Senior
Subordinated Note Claims (although the more likely treatment may be that
described in the last paragraph of this Section X.A.2).
A Holder of Old Senior Subordinated Notes that receives Cash, New
Secured PIK Notes, New Common Stock and New Senior Secured Notes, if any, will
recognize ordinary interest income to the extent that any portion of the Cash,
New Secured PIK Notes, New Common Stock or New Senior Secured Notes received is
allocable to accrued but untaxed interest. See "Distributions in Discharge of
Accrued Interest," below. The following discussion addresses only that portion
of the consideration received by a Holder of Old Senior Subordinated Notes which
is not allocable to accrued but untaxed interest.
A Holder of Old Senior Subordinated Notes will recognize gain (but not
loss) equal to the lesser of (i) the sum of the Cash, the fair market value of
the New Common Stock, and the issue prices of the New Secured PIK Notes and any
New Senior Secured Notes received in exchange for such Holder's Old Senior
Subordinated Notes, less the Holder's tax basis in the Old Senior Subordinated
Notes, and (ii) the sum of the Cash, the fair market value of any New Senior
Secured Notes, and, in the event the New Secured PIK Notes are not tax
securities, the fair market value of the New Secured PIK Notes received in
exchange for such Holder's Old Senior Subordinated Notes. Such gain will be
capital gain and will be long-term capital gain if the holding period with
respect to the Old Senior Subordinated Notes exceeds one year, except to the
extent of any accrued (but not recognized) market discount, which will be
treated as ordinary income, as described below under the heading, "Market
Discount." It is expected that the Old Senior Subordinated Notes will be treated
as publicly traded in an established securities market and that installment
reporting will not be available with respect to the exchange. See "Original
Issue Discount and Premium."
Assuming the New Secured PIK Notes and New Senior Secured Notes are
not tax securities, a Holder's initial tax basis in the New Common Stock
received generally will equal the Holder's adjusted tax basis in the Old Senior
Subordinated Notes surrendered, reduced by the amount of Cash and the fair
market value of the New Secured PIK Notes and any New Senior Secured Notes
received in the exchange, and increased by any capital gain recognized by the
Holder on the exchange. In such case, the Holder's initial tax basis in the New
Secured PIK Notes and any New Senior Secured Notes received will be equal to
their respective fair market values.
If the New Secured PIK Notes are treated as tax securities, a Holder's
aggregate initial tax basis in the New Common Stock and the New Secured PIK
Notes generally will equal the Holder's adjusted tax basis in the Old Senior
Subordinated Notes surrendered, reduced by the amount of Cash and the fair
market value of any New Senior Secured Notes received in the exchange, and
increased by any capital gain recognized by the Holder on the exchange. Such
aggregate initial tax basis will be allocated between the New Secured PIK Notes
and New Common Stock in accordance with their relative fair market values. The
Holder's initial tax basis in any New Senior Secured Notes received will be
equal to their fair market value.
The Holder's holding period in the New Common Stock and, if the New
Secured PIK Notes are tax securities, the New Secured PIK Notes received will
include such Holder's holding period for the Old Senior Subordinated Notes
surrendered. The Holder's holding period in any New Senior Secured Notes and, if
the New Secured PIK Notes are not tax securities, the New Secured PIK Notes
received will begin on the day following the Effective Date. The holding period
of any additional New Secured PIK Notes which are issued in lieu of paying Cash
interest on a New Secured PIK Note will include such Holder's holding period for
the New Secured PIK Notes received in exchange for its Old Senior Subordinated
Notes.
The Company intends to treat the New Secured PIK Notes received in the
exchange as issued with original issue discount. Accordingly, each Holder
thereof will include such original issue discount in income on a constant-yield
basis over the entire term of such Notes, regardless of the timing of Cash
payments. Depending on their issue price, the New Senior Secured Notes may be
issued with original issue discount. See "Original Issue Discount and Premium,"
below.
As indicated earlier, it is possible that the Holders of Old Senior
Subordinated Notes will be treated as having received, in exchange for their Old
Senior Subordinated Notes Claims, the consideration to which they otherwise
would have been entitled had there been a third-party lender and then purchased
the New Senior Secured Notes and received, as additional consideration or as a
fee in connection therewith, the additional Cash and the additional shares of
New Class A Common Stock. In such case, the Holders may be treated as having
purchased an investment unit comprised of the New Senior Secured Notes and the
additional shares of New Class A Common Stock they receive over the amount they
would have otherwise received had there been a third-party lender. The amount
paid for the investment unit would have to be allocated between the New Senior
Secured Notes and such additional shares of New Class A Common Stock based on
their relative fair market values. The portion of the purchase price allocated
to the New Senior Secured Notes would constitute their issue price and their
initial tax basis. To the extent such allocable portion is less than the face
amount of the New Senior Secured Notes, the New Senior Secured Notes may be
treated as issued with original issue discount, which as described under
"Original Issue Discount and Premium" below, is includible in income on a
constant-yield basis over the entire term of such Notes, regardless of the
timing of Cash payments. Further, if the price paid for the investment unit is
considered reduced by the amount of the additional Cash the Holders receive that
would otherwise have been paid as a fee to the third-party lender, the purchase
price allocable to the New Senior Secured Notes will be less and the New Senior
Secured Notes will have a larger amount of original issue discount. On the other
hand, if the purchase price is not reduced by the additional Cash, it is
possible that such additional Cash may be viewed as a fee to the Holders of the
Old Senior Subordinated Notes, which fee would be includible in income to such
Holders upon its receipt. Further, it is possible that the additional shares of
New Class A Common Stock also may be viewed as a fee to the Holders of the Old
Senior Subordinated Notes, and not as consideration for their Old Senior
Subordinated Notes Claims or as part of a purchased investment unit. In such
case, the Holders would have to include the value of the additional shares of
New Class A Common Stock in income upon its receipt as well.
3. EXCHANGE OF ALLOWED GENERAL UNSECURED CLAIMS FOR CASH AND NEW SECURED
PIK NOTES
In general, gain or loss will be recognized by a Holder of an Allowed
General Unsecured Claim in an amount equal to the difference between (i) the
"amount realized" by the Holder in respect of its claim (other than any claim
for accrued but unpaid interest) and (ii) the Holder's adjusted tax basis in its
General Unsecured Claim (other than any claim for accrued but unpaid interest).
See "Distributions in Discharge of Accrued Interest," below. The amount realized
by a Holder will equal the amount of Cash and the issue price of the New Secured
PIK Notes received in respect of its claim (other than any claim for accrued but
unpaid interest). For this purpose, the issue price, as described below under
"Original Issue Discount and Premium," should equal the fair market value of the
New Secured PIK Notes.
Where gain or loss is recognized by a Holder of a General Unsecured
Claim, the character of such gain or loss as long-term or short-term capital
gain or loss, or as ordinary income or loss will be determined by a number of
factors, including the tax status of the Holder, whether the obligation from
which a Claim arose constitutes a capital asset in the hands of the Holder and
how long it has been held, and whether and to what extent the Holder has
previously claimed a bad debt deduction. A Holder which purchased its Claim from
a prior holder at a market discount may be subject to the market discount rules
of the Code which could characterize a portion of the gain recognized as
ordinary income. In addition, Section 582(c) of the Code provides that the sale
or exchange of a bond, debenture, note, or certificate or other evidence of
indebtedness by certain financial institutions shall be considered the sale or
exchange of a non-capital asset. Accordingly, any gain or loss recognized by
such financial institutions as a result of the implementation of the Plan will
be ordinary gain or loss, regardless of the nature of their Claims. Since it is
expected that the New Secured PIK Notes will be treated as traded in an
established securities market, installment reporting will not be available with
respect to the receipt of the New Secured PIK Notes. See "Original Issue
Discount and Premium."
A General Unsecured Creditor's initial tax basis in the New Secured
PIK Notes received will be equal to their fair market value. A General Unsecured
Creditor's holding period in the New Secured PIK Notes received, including any
additional New Secured PIK Notes issued in lieu of paying Cash interest on a New
Secured PIK Note, will begin on the day following the Effective Date.
The Company intends to treat the New Secured PIK Notes received in the
exchange as issued with original issue discount. Accordingly, each Holder
thereof will include such original issue discount in income on a constant-yield
basis over the entire term of such Notes, regardless of the timing of Cash
payments. See "Original Issue Discount and Premium," below.
4. CANCELLATION OF OLD COMMON STOCK OR EXCHANGE OF OLD COMMON STOCK
FOR NEW WARRANTS
If a Holder of the Old Common Stock receives no consideration in
exchange for its Old Common Stock and such Old Common Stock is cancelled, such
Holder of Old Common Stock will generally recognize a loss equal to the Holder's
tax basis in its Old Common Stock. Any such loss will generally be a capital
loss and will be a long-term capital loss if the Old Common Stock was held for
more than one year.
If a Holder of the Old Common Stock receives New Warrants in exchange
for its Old Common Stock, the exchange will be treated as an exchange of stock
for tax securities pursuant to a reorganization under Section 368(a)(1)(E) of
the Code. Accordingly, a Holder of Old Common Stock should not recognize gain or
loss upon such exchange. In general, a Holder's tax basis in the New Warrants
received will equal the Holder's adjusted tax basis in the Old Common Stock
surrendered, and a Holder's holding period in the New Warrants will include its
holding period for the Old Common Stock surrendered.
5. DISTRIBUTIONS IN DISCHARGE OF ACCRUED INTEREST
To the extent the amount received by a Holder is received in discharge
of interest accrued on its Claim during its holding period, such amount will be
taxable to the Holder as interest income (if, under the Holder's applicable
accounting method, such interest was not previously included in the Holder's
gross income). Conversely, a Holder will recognize a deductible loss (or,
possibly, a write-off against a reserve for bad debts) to the extent any accrued
interest claimed was previously included in its gross income and is not paid in
full.
Pursuant to the Plan, any distributions received by a Holder in
respect of an Allowed Claim shall be allocated first to the principal portion of
the Claim to the extent thereof and thereafter to any Claim representing accrued
interest through the Effective Date. There is no assurance, however, that such
allocation will be respected for federal income tax purposes. Accordingly, all
Holders are advised to consult their own tax advisors to determine the amount of
consideration received under the Plan that may be allocable to accrued interest.
6. ORIGINAL ISSUE DISCOUNT AND PREMIUM
GENERAL RULES
In general, a debt instrument is considered for federal income tax
purposes to be issued with original issue discount ("OID") if the "stated
redemption price at maturity" of the instrument exceeds the instrument's "issue
price" by more than a prescribed de minimis amount.
The issue price of a debt instrument will depend upon whether or not
the debt instrument is treated as "publicly traded" for purposes of the OID
rules. If the debt instrument is publicly traded (whether or not the property
for which it is exchanged is publicly traded), its issue price will be its fair
market value on the issue date. On the other hand, if the debt instrument is not
publicly traded, but the property for which it is exchanged is publicly traded,
the issue price of the debt instrument will be the fair market value of the
property on the issue date of the debt instrument. The issue date is generally
the date on which a substantial amount of the debt instrument is issued.
Property is considered "publicly traded" under Treasury regulations, if, in
general, at any time during the 60 day period ending 30 days after the issue
date, it is traded on a recognized securities exchange, or is listed on a
quotation medium that is a system of general circulation providing a reasonable
basis to determine fair market value by disseminating either recent price
quotations of one or more identified brokers, dealers or traders, or actual
prices of recent sales transactions.
It is expected that the Old Senior Subordinated Notes and the New
Secured PIK Notes will, and that the New Senior Secured Notes may, be treated as
publicly traded for purposes of the OID rules. Accordingly, the issue price of
the New Secured PIK Notes will equal their fair market value (i.e., their
trading price on the date of issuance) and the issue price of the New Senior
Secured Notes will equal their fair market value (if they are publicly traded)
or the fair market value of the Old Senior Subordinated Notes for which they are
exchanged (if the New Senior Secured Notes are not publicly traded).
Accordingly, it is possible that the issue prices of the New Senior Secured
Notes and the New Secured PIK Notes could be significantly less than their
respective principal amounts. Thus, the New Senior Secured Notes may be issued
with OID and the New Secured PIK Notes could have OID in addition to that
resulting from the inclusion of all interest payments in their stated redemption
price at maturity, as described immediately below.
The stated redemption price at maturity of a debt instrument is the
aggregate of all payments due to the Holder under such debt instrument at or
before its maturity date, other than interest that is actually and
unconditionally payable in Cash or property (other than debt instruments of the
issuer) at fixed intervals of one year or less during the entire term of the
instrument at certain specified rates ("qualified stated interest"). Under this
definition, no interest payable with respect to the New Secured PIK Notes will
be treated as qualified stated interest (since the Debtor may issue additional
New Secured PIK Notes ("Additional Notes") in lieu of paying Cash interest on a
New Secured PIK Note under certain circumstances) and all such interest will be
included in the stated redemption price at maturity of the New Secured PIK
Notes. Further, since interest on the New Senior Secured Notes will be paid
currently in Cash, all such interest will be treated as qualified stated
interest and will not be included in the stated redemption price at maturity. As
a result, the stated redemption price of the New Secured PIK Notes will exceed
their issue price by more than the de minimis amount and the New Secured PIK
Notes will be issued with OID. Further, unless the issue price of the New Senior
Secured Notes is less than their principal amount, the New Senior Secured Notes
should not be treated as issued with OID.
Even if the New Senior Secured Notes were not treated as issued with
OID under the rules described above, they may have OID if they are treated as
part of a purchased investment unit and not as consideration for the Old Senior
Subordinated Notes Claims. In such case, their issue price will equal the
portion of the investment unit purchase price which is properly allocable to the
New Senior Secured Notes, which issue price may be significantly less than the
stated redemption price at maturity of such Notes. As a result, if the New
Senior Secured Notes are properly viewed as part of an investment unit, they may
be issued with OID.
In general, OID with respect to a debt instrument is includible in
income on a constant-yield method, based on the original yield to maturity of
the debt instrument calculated by reference to its issue price, regardless of
the taxpayer's method of accounting and regardless of when interest on the debt
instrument is actually paid in Cash. Accordingly, the holder of a debt
instrument issued with OID may be required to take OID into income prior to the
receipt of Cash payments with respect to that instrument.
For purposes of the OID rules, any Additional Notes issued in lieu of
paying Cash interest on a New Secured PIK Note will be aggregated with the New
Secured PIK Note such that the issuance of an Additional Note will not be
treated as a payment with respect to the New Secured PIK Notes and payments with
respect to the Additional Notes will be treated as made with respect to the
original New Secured PIK Notes.
BOND PREMIUM
If a holder's tax basis with respect to a debt instrument upon its
acquisition exceeds its issue price, the debt instrument will be treated as
having been acquired with "acquisition premium" and the holder may reduce its
OID accruals with respect to such debt instrument by the proportion of the
aggregate amount of OID remaining to be accrued that is represented by the
amount of such excess.
If a holder's tax basis with respect to a debt instrument upon its
acquisition exceeds the stated redemption price at maturity of such debt
instrument, then the holder will not be required to accrue OID with respect of
such debt instrument and such excess may be deductible by the holder as
"amortizable bond premium" under Section 171 of the Code on a constant-yield
basis over the term of the debt instrument, subject to certain limitations. Such
deductions are available only if the holder makes (or has made) a timely
election under Section 171 of the Code. Any such election to amortize bond
premium would apply to all debt instruments held or subsequently acquired by the
electing holder and cannot be revoked without permission from the Service.
CONTINGENT PAYMENT DEBT INSTRUMENTS
Special rules apply to debt instruments treated as "contingent payment
debt instruments" under applicable Treasury regulations. The New Secured PIK
Notes are subject to mandatory redemption if certain tests relating to the
Debtors' consolidated EBITDA, interest expense and working capital are
satisfied. Accordingly, if the issue price of the New Secured PIK Notes (i.e.,
their fair market value on the date of issuance) does not equal their principal
amount, the Debtors intend to treat the New Secured PIK Notes as contingent
payment debt instruments (under Treasury regulations Section 1.1275-4) issued
with OID since it is not possible to predict if and when the mandatory
redemption will occur.
Under the contingent payment debt rules, OID with respect to the New
Secured PIK Notes will be calculated based on a projected payment schedule and
assuming the same yield for the New Secured PIK Notes as the yield which would
result for comparable fixed rate debt instruments issued by the Debtors as of
the issue date of the New Secured PIK Notes. The amount of accrued OID is
adjusted to reflect differences in actual and projected payments with respect to
the New Secured PIK Notes. The excess of an actual contingent payment over a
projected payment is a "positive adjustment" and the excess of a projected
payment over an actual contingent payment is a "negative adjustment." Where the
positive adjustments for a taxable year exceed the negative adjustments for a
taxable year, the difference (the "net positive adjustment") is treated as
additional interest for the taxable year. Where the negative adjustments for a
taxable year exceed the positive adjustments for the taxable year, the
difference (the "net negative adjustment") is first, applied as a reduction of
OID that would otherwise be accrued on the bond for the taxable year; second,
treated as an ordinary loss to the extent the holder's total interest inclusions
on the bond exceed the total amount of the holder's net negative adjustments
treated as ordinary losses on the bond in prior taxable years; and third,
carried forward and treated as a negative adjustment occurring on the first day
of the next taxable year. Any net negative adjustment carryforward for the
taxable year in which the bond is sold, exchanged or retired is treated as a
reduction in the holder's amount realized upon such sale, exchange or
retirement. The projected payment schedule used by the Debtors to calculate OID
with respect to the New Secured PIK Notes will be made available to all holders
of New Secured PIK Notes by submission of a written request to the Debtors. All
holders of Old Senior Subordinated Notes and General Unsecured Claims should
consult their tax advisors concerning the applicability and effect of the
Treasury regulations relating to contingent payment debt instruments.
Under the Treasury regulations relating to contingent payment debt
instrument, if a Holder's tax basis in the New Secured PIK Notes exceeds their
issue price (adjusted for any accrued OID, any noncontingent payments and the
projected amount of any contingent payments), any difference is allocated in a
reasonable manner to daily portions of interest or projected payments over the
term of the New Secured PIK Notes and, on the date a daily portion accrues or
the payment is made, the amount allocated to such daily portion or payment is
treated as a negative adjustment, which is treated as described above. The
election under Section 171 of the Code relating to bonds acquired at a premium
is not applicable with respect to contingent payment debt instruments.
7. MARKET DISCOUNT
In general, a debt instrument issued with OID is considered to have
been acquired with "market discount" if its holder's adjusted tax basis is less
than its adjusted issue price by more than a prescribed de minimis amount.
A holder that acquires a debt instrument with market discount will be
required to include accrued and unrecognized market discount in income as
ordinary income to the extent partial principal payments are made on the debt
instrument or gain is realized by the holder on the sale, exchange, redemption
or other taxable disposition of the debt (unless the holder of the debt
instrument elects to include market discount in income as it accrues). In
addition, the holder could be required to defer the deduction of a portion of
the interest paid on any indebtedness incurred or continued to purchase or carry
a debt instrument acquired with market discount.
The market discount rules of Section 1276 of the Code do not apply to
contingent payment debt instruments. Accordingly, if the New Secured PIK Notes
are treated as contingent payment debt instruments under the applicable Treasury
regulations and a holder's basis in a New Secured PIK Note is less than the
issue price of the New Secured PIK Note (adjusted for any accrued OID, any
noncontingent payments and the projected amount of any contingent payments), any
difference is allocated in a reasonable manner to daily portions of interest or
projected payments over the term of the New Secured PIK Note, and, on the date a
daily portion accrues or the payment is made, the amount allocated to such daily
portion or payment is treated as a positive adjustment. See "Original Issue
Discount and Premium" above for the treatment of positive adjustments. Holders
of New Secured PIK Notes should consult their tax advisors regarding the
applicability of interest deductions with respect to debt incurred to purchase
or carry New Secured PIK Notes that have market discount.
8. DISPOSITION OF PLAN SECURITIES
Generally, any sale, exchange or redemption of a New Secured PIK Note
or a New Senior Secured Note will result in gain or loss equal to the difference
between the amount realized on the sale, exchange or redemption and a Holder's
adjusted tax basis in such Notes. If the New Secured PIK Notes are treated as
contingent payment debt instruments, as described in "Original Issue Discount
and Premium" above, the amount realized for purposes of calculating gain or loss
from a disposition will be reduced by any negative adjustment carryforwards for
the taxable year of such disposition.
The calculation of the adjusted tax basis of the New Secured PIK Notes
will depend on whether or not such Notes are treated as contingent payment debt
instruments. See "Original Issue Discount and Premium" above. If the New Secured
PIK Notes are not contingent payment debt instruments, a Holder's adjusted tax
basis in the New Secured PIK Notes (and, in all cases, a Holder's adjusted tax
basis in the New Senior Secured Notes, if any) is generally the initial tax
basis in such Notes on the Effective Date (as described above under "Exchange of
Old Senior Subordinated Notes for Cash, New Secured PIK Notes, New Common Stock
and Possibly New Senior Secured Notes" and under "Exchange of Allowed General
Unsecured Claims for Cash and New Secured PIK Notes"), increased by any OID or
market discount included in income with respect to such Notes and decreased by
any payments received on the Notes and any amortized premium.
If the New Secured PIK Notes are contingent payment debt instruments,
a Holder's adjusted tax basis in the New Secured PIK Notes is generally the
initial tax basis in such Notes on the Effective Date (as described above under
"Exchange of Old Senior Subordinated Notes for Cash, New Secured PIK Notes, New
Common Stock and Possibly New Senior Secured Notes" and under "Exchange of
Allowed General Unsecured Claims for Cash and New Secured PIK Notes"), increased
by any OID previously accrued on the New Secured PIK Notes (determined before
accounting for positive and negative adjustments), and decreased by the amount
of any noncontingent payment and the projected amount of any contingent payment
previously made on the bond to the holder. The basis of a contingent New Secured
PIK Note is further increased (decreased) by a positive (negative) adjustment
that results from a difference in a Holder's basis in and the adjusted issue
price of a New Secured PIK Note on the date of such adjustment, as described in
"Market Discount" and "Original Issue Discount and Premium" above.
If a Holder has received additional New Secured PIK Notes in lieu of
Cash payments of interest on the New Secured PIK Notes and separately disposes
of the original New Secured PIK Notes or the additional notes, the adjusted tax
basis generally will be allocated among the original New Secured PIK Notes and
such additional notes in proportion to their respective principal amounts.
Except to the extent treated as ordinary income or loss under the
contingent payment debt rules, gain or loss on the disposition of a New Secured
PIK Note or a New Senior Secured Note generally will be capital gain or loss if
the New Secured PIK Note was held as a capital asset. Capital losses generally
may be used only to offset capital gains. The Treasury regulations relating to
contingent payment debt instruments provide that gain upon the disposition of a
contingent payment debt instrument will be ordinary income if the contingencies
relating to payments on the debt instrument are unresolved as of the time of the
disposition, and some or all of any loss upon the disposition of the contingent
payment debt instrument may be ordinary. All holders of New Secured PIK Notes
should consult their tax advisors concerning the applicability and effect of the
Treasury regulations relating to contingent payment debt instruments.
In general, any gain or loss recognized on a subsequent sale or
exchange of the New Common Stock received under the Plan will be capital gain or
loss. However, if the Old Senior Subordinated Notes are treated as tax
securities with respect to which the Holder accrued but had not recognized
market discount, a portion of the gain on the disposition of the New Common
Stock received in exchange therefor may be treated as ordinary income, as
described above under "Market Discount."
In general, any gain or loss recognized on a subsequent sale or
exchange of the New Warrants received under the Plan will be capital gain or
loss and such gain or loss will be long-term capital gain or loss if the New
Warrants were held for more than one year. If the New Warrants are not exercised
and lapse, a Holder generally will recognize a capital loss equal to the
Holder's tax basis in the New Warrants, and such loss will be a long-term
capital loss if the New Warrants were held for more than one year.
The exercise of the New Warrants will not be a taxable event to the
Holder thereof. The Holder's tax basis in the New Common Stock received upon
such exercise will be equal to the Holder's tax basis in the New Warrants plus
the amount paid by the Holder to exercise the New Warrant.
9. BACKUP WITHHOLDING
A noncorporate Holder of Old Securities or Plan Securities may be
subject to backup withholding at the rate of 31 percent with respect to
"reportable payments," which include payments in respect of dividends, interest
or accrued OID, and the proceeds of a sale, exchange or redemption of Old
Securities or Plan Securities. Generally, a payor will be required to deduct and
withhold the prescribed amounts if (a) the payee fails to furnish a taxpayer
identification number ("TIN") to the payor in the manner required, (b) the
Service notifies the payor that the TIN furnished by the payee is incorrect, (c)
there has been a failure of the payee to certify under penalty of perjury that
the payee is not subject to withholding under Section 3406(a)(1)(C) of the Code,
or (d) the payee is notified by the Service that he or she failed to report
properly payments of interest and dividends and the Service has notified the
Debtors that he or she is subject to backup withholding.
Amounts paid as backup withholding do not constitute an additional tax
and will be credited against the Holder's federal income tax liabilities, so
long as the required information is provided to the Service. The Debtors will
report to the Holders of Old Securities and Plan Securities and to the Service
the amount of any "reportable payments" for each calendar year and the amount of
tax withheld, if any, with respect to payments on such securities to any
noncorporate Holder other than an "exempt recipient" (which, if necessary,
provides adequate proof of its exempt status).
10. ADJUSTMENTS
The conversion ratio and exercise price of the New Warrants are
subject to adjustments under certain circumstances. If such adjustments to the
conversion ratio and/or exercise price of the New Warrants are made, Holders of
the New Warrants could be treated as having received a constructive distribution
under Section 301 and Section 305(c) of the Code that may be treated as a
dividend distributed by the Debtor and taxable as ordinary income (regardless of
whether the Holder ever exercises the New Warrant). In general, a Holder's basis
in a New Warrant will include the amount of any such deemed taxable dividend.
B. CERTAIN FEDERAL INCOME TAX CONSEQUENCES TO THE DEBTORS
1. CANCELLATION OF INDEBTEDNESS
In connection with the Plan, the amount of the Debtors' aggregate
outstanding indebtedness will be substantially reduced. A taxpayer generally
realizes cancellation of debt ("COD") income for federal income tax purposes
equal to the amount of any indebtedness that is discharged or canceled during
the taxable year. In the case of an exchange such as that contemplated by the
Plan, where outstanding indebtedness is canceled in exchange for newly issued
indebtedness (such as the New Secured PIK Notes and possibly the New Senior
Secured Notes) and other property (such as the Cash and New Common Stock), the
amount of such COD income is, in general, equal to the excess of the adjusted
issue price (including accrued but unpaid interest) of the indebtedness
satisfied over the sum of the issue prices of the new debt instruments and the
fair market value of the other property issued therefor. If the discharge is
granted by a court in a Chapter 11 proceeding or is pursuant to a plan approved
by such court, however, such income is excluded from the taxpayer's taxable
income under Section 108(a) of the Code. Consequently, any COD income
attributable to the Plan will be excluded from the Debtors' taxable income.
However, Section 108(b) of the Code provides, in general, that certain
tax attributes of a debtor, including any net operating loss carryforwards
("NOLs") and a portion of certain tax credits, must be reduced by the amount of
the debtor's COD income that is excluded under Section 108(a) of the Code. To
the extent that the amount excluded exceeds these tax attributes, the debtor's
tax basis in its property is reduced by the amount of such excluded COD income,
except that such reduction is limited to the excess of the aggregate tax basis
of the property held by the debtor over the aggregate liabilities of the debtor
immediately after the transaction. Although not entirely clear, the Debtors
believe and intend to take the position that any attribute reduction under
Section 108(b) of the Code is to be applied on a separate company basis (i.e.,
COD income of a debtor company can be applied only against attributes of that
company), even though a debtor may be part of an affiliated group that files a
consolidated income tax return.
As a result of the Plan, and assuming an aggregate issue price for
each of the debt instruments issued in the Plan equal to its aggregate principal
amount, the Debtors estimate that they will realize approximately $182 million
of COD income in connection with the Plan. The amount of COD income will be
greater if and to the extent the issue price of the New Secured PIK Notes or any
New Senior Secured Notes issued to Holders is less than their principal amount.
In either event, this COD income will completely eliminate the NOLs of PHI and
could substantially eliminate the NOLs of PHI's subsidiaries if attribute
reduction were applied on a consolidated group basis. However, assuming separate
company attribute reduction, the Debtors expect that the subsidiaries of PHI
will continue to have significant NOLs following implementation of the Plan.
2. LIMITATION OF NET OPERATING LOSS CARRYFORWARDS FOLLOWING AN
OWNERSHIP CHANGE
The Debtors estimate that as of the end of their 1999 Fiscal Year,
they will report NOL carryforwards of approximately $150 million (and tax
credits of approximately $9 million), although there can be no assurance that
the Service will concur in the reporting positions on which the Debtors'
calculations are based. These NOLs are expected to be reduced to approximately
$75 million (and the tax credits to approximately $4.5 million) as a result of
the COD income described above (and assuming separate company attribute
reduction).
Section 382 of the Code generally limits a corporation's use of its
NOLs (and may limit a corporation's use of certain built-in losses recognized
within a five-year period) if the corporation undergoes an "ownership change."
Section 383 of the Code applies similar limitations to capital loss
carryforwards and tax credits. In general, an ownership change occurs when the
percentage of the corporation's stock owned by certain "5 percent shareholders"
increases by more than 50 percentage points over the lowest percentage owned at
any time during the applicable "testing period" (generally the shorter of (i)
the three-year period preceding the testing date or (ii) the period of time
since the most recent ownership change of the corporation). A 5 percent
shareholder for these purposes includes, very generally, an individual or entity
that directly or indirectly (and taking into account certain attribution rules)
owns 5 percent or more of the value of the corporation's stock during the
relevant period, and may include one or more groups of shareholders that in the
aggregate own less than 5 percent of the value of the corporation's stock.
As a result of the Plan, it is anticipated that the Debtors will
undergo an "ownership change" within the meaning of Section 382 of the Code.
Consequently, the ability of the Debtors to use their NOLs, as well as any
losses arising in the taxable period ending on the Effective Date of the Plan,
will become subject to the provisions of Section 382 of the Code.
If an ownership change occurs pursuant to the consummation of a
bankruptcy debt restructuring and Section 382(l)(5) of the Code (as described
below) does not apply, the NOLs available each year to offset income of the loss
corporation's group is limited (to the extent not previously limited) to the
product of (a) the aggregate fair market value (after taking into account any
increase in value as a result of such bankruptcy restructuring) of the
outstanding stock of the common parent of the group, and (b) the federal
long-term tax-exempt interest rate in effect on the date of the ownership
change, plus the portion of any such limitation amount not utilized in prior
years (the "Section 382 limitation"). (If the ownership change does not occur as
a result of a bankruptcy debt restructuring, the aggregate fair market value of
the common stock referred to in clause (a) of the preceding sentence is the
stock's value before the ownership change, whether or not the ownership change
occurs while the loss corporation is under the jurisdiction of the bankruptcy
court). If the group ceases the conduct of its historic business within the
two-year period following the date of the ownership change, the ability of the
group to utilize its NOLs under the foregoing formula restriction is eliminated
entirely.
In addition, the Section 382 limitation of a loss corporation's group
is increased if and to the extent the group recognizes certain "built-in gains"
(generally the excess, at the time of the ownership change, of the fair market
value of the assets of the corporation over their adjusted tax basis - in the
case of an affiliated consolidated group, built-in gains or losses are computed
on a group basis taking into account each member's assets but disregarding stock
owned by a member in any other member corporation) during the five-year period
beginning with the date of an ownership change (the "recognition period"), up to
the amount of the net unrealized built-in gain on the date of the ownership
change, provided that the amount of such net unrealized built-in gain exceeds
the lesser of $10,000,000 or 15% of the fair market value of the group's assets,
excluding Cash and certain other assets. Conversely, if a corporation has a net
unrealized built-in loss exceeding the threshold amount, any portion of such net
unrealized built-in loss recognized during the recognition period is subject to
the Section 382 limitation.
Unless a debtor elects for it not to apply, Section 382(l)(5) of the
Code provides that in the case of a debtor under the jurisdiction of a
bankruptcy court in a Title 11 case, assuming no prior ownership change, the
annual formula limitations imposed by Section 382 of the Code (as discussed
above) will not apply to any ownership change resulting from such a proceeding
if qualifying creditors and shareholders (determined immediately before such
ownership change) own, after such ownership change as a result of being
shareholders or creditors immediately before such change, 50% or more of the
stock of the loss corporation.
A cost of applying Section 382(l)(5) of the Code is that NOL
carryovers must be reduced by any deduction of interest claimed by the loss
corporation, with respect to any indebtedness converted into stock, for any
taxable year ending during the three-year period preceding the taxable year of
the ownership change and the portion of the year of the ownership change prior
to the date of the ownership change. Any NOL reduction arising from the
application of Section 382(l)(5) of the Code will not again be taken into
account in computing the amount of COD income realized by the Debtors.
In addition, if Section 382(l)(5) of the Code is applicable and is
applied, a second ownership change within two years will result in Section
382(l)(5) of the Code being inapplicable and the Debtors' Section 382 limitation
for the second ownership change will be zero.
The Debtors do not currently believe that the requirements for
applying Section 382(l)(5) of the Code will be satisfied in connection with the
anticipated ownership change resulting from the consummation of the Plan. Prior
to the time prescribed for electing not to apply Section 382(l)(5) of the Code,
the Debtors will determine whether they satisfy such requirement and, if so,
whether it will be preferable to choose to apply the approach incorporated in
Section 382(l)(5) of the Code.
3. ALTERNATIVE MINIMUM TAX
In general, an "alternative minimum tax" ("AMT") is imposed on a
corporation's "alternative minimum taxable income" at a rate of 20% to the
extent such tax exceeds the corporation's regular federal income tax. In
computing taxable income for AMT purposes, certain tax deductions and other
beneficial allowances are modified or eliminated. In particular, even though a
corporation might be able to offset all of its taxable income for regular
federal income tax purposes by available NOL carryovers, only 90% of a
corporation's taxable income for AMT purposes may be offset by available NOL
carryovers (as recomputed for AMT purposes), resulting in an effective AMT rate
of 2%.
Any AMT that a corporation pays generally will be allowed as a
nonrefundable credit against its regular federal income tax liability in future
taxable years when the corporation is no longer subject to the AMT.
THE FEDERAL INCOME TAX CONSEQUENCES OF THE RESTRUCTURING ARE COMPLEX.
THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF FEDERAL INCOME TAXATION
THAT MAY BE RELEVANT TO A PARTICULAR HOLDER IN LIGHT OF SUCH HOLDER'S PARTICULAR
CIRCUMSTANCES AND INCOME TAX SITUATION. ALL HOLDERS OF THE OLD SECURITIES SHOULD
CONSULT WITH THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF
THE TRANSACTIONS CONTEMPLATED BY THE RESTRUCTURING AND THE OWNERSHIP AND
DISPOSITION OF THE PLAN SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF
ANY STATE, LOCAL OR FOREIGN TAX LAWS, AND OF ANY CHANGE IN APPLICABLE TAX LAWS.
<PAGE>
XI. RECOMMENDATION AND CONCLUSION
For all of the reasons set forth in this Disclosure Statement, the
Debtors believe that the Confirmation and consummation of the Plan is preferable
to all other alternatives. Consequently, the Debtors urge all Holders of Claims
solicited hereby to vote to ACCEPT the Plan, and to duly complete their Ballots
and/or Master Ballots such that they will be ACTUALLY RECEIVED by the Balloting
Agent on or before 5:00 p.m., Eastern Time, on January 14, 2000.
Dated: December 13, 1999
Orlando, Florida
Respectfully submitted,
PLANET HOLLYWOOD INTERNATIONAL, COOL PLANET, INC.
INC.
By: \S\ THOMAS AVALLONE By:\S\ THOMAS AVALLONE
--------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
COOL PLANET II, INC. PLANET HOLLYWOOD (ASPEN), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
-------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (ATLANTIC PLANET HOLLYWOOD (CHICAGO), INC.
CITY), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
--------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (HONOLULU), PLANET HOLLYWOOD (LP), INC.
INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
--------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (NEW YORK PLANET HOLLYWOOD (NEW YORK),
CITY), INC. LTD.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
--------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (ORLANDO), INC. PLANET HOLLYWOOD (PHOENIX), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
---------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (REGION I), INC. PLANET HOLLYWOOD (REGION II), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
----------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (REGION III), INC. PLANET HOLLYWOOD (REGION IV), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
----------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (REGION V), INC. PLANET HOLLYWOOD (REGION VI), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
---------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (REGION VII), PLANET HOLLYWOOD (TEXAS), LTD.
INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
----------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (WAREHOUSE), SOUND REPUBLIC, INC.
INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
----------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
SOUND REPUBLIC I, INC. ALL STAR CAFE INTERNATIONAL, INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
---------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
ALL STAR CAFE (NEW YORK), INC. EBCO MANAGEMENT, INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
----------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
<PAGE>
EXHIBIT 1
TO
FIRST AMENDED DISCLOSURE STATEMENT FOR THE
FIRST AMENDED JOINT REORGANIZATION PLAN OF
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FIRST AMENDED JOINT PLAN OF REORGANIZATION
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: )
) CHAPTER 11
PLANET HOLLYWOOD )
INTERNATIONAL, INC., ET AL. ) CASE NO. 99-3612(JJF)
) (JOINTLY ADMINISTERED)
DEBTORS. )
DEBTORS' FIRST AMENDED JOINT PLAN OF REORGANIZATION
Dated: December 13, 1999
Planet Hollywood International, Inc., Cool Planet, Inc., Cool Planet
II, Inc., Planet Hollywood (Aspen), Inc., Planet Hollywood (Atlantic City),
Inc., Planet Hollywood (Chicago), Inc., Planet Hollywood (Honolulu), Inc.,
Planet Hollywood (LP), Inc., Planet Hollywood (New York City), Inc., Planet
Hollywood (New York), Ltd., Planet Hollywood (Orlando), Inc., Planet Hollywood
(Phoenix), Inc., Planet Hollywood (Region I), Inc., Planet Hollywood (Region
II), Inc., Planet Hollywood (Region III), Inc., Planet Hollywood (Region IV),
Inc., Planet Hollywood (Region V), Inc., Planet Hollywood (Region VI), Inc.,
Planet Hollywood (Region VII), Inc., Planet Hollywood (Texas), Ltd., Planet
Hollywood (Warehouse), Inc., Sound Republic, Inc., Sound Republic 1, Inc., All
Star Cafe International, Inc., All Star Cafe (New York), Inc., and EBCO
Management, Inc., Debtors and Debtors-in-Possession (collectively, the
"Debtors") in the above-captioned Chapter 11 cases, propose the following Joint
Plan of Reorganization (the "Plan") pursuant to Section 1121(a) of Title 11 of
the United States Code, as amended.
<PAGE>
TABLE OF CONTENTS
ARTICLE I .............................................................. 1
DEFINITIONS AND RULES OF CONSTRUCTION....................................1
ARTICLE II............................................................. 14
CLASSIFICATION OF CLAIMS AND INTERESTS..................................14
2.1 Pre-Petition Claims and Equity Interests Classified.....14
2.2 Administrative Claims and Priority Tax Claims...........14
2.3 Claims Against and Interests in the Debtors.............14
ARTICLE III.............................................................15
IDENTIFICATION OF IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS.......15
3.1 Impaired Classes of Claims and Interests................15
3.2 Unimpaired Classes of Claims and Interests..............15
3.3 Impairment Controversies................................15
ARTICLE IV .............................................................16
TREATMENT OF ADMINISTRATIVE AND PRIORITY TAX CLAIMS.....................16
4.1 Fees of Professionals and Claims for Substantial
Contribution............................................16
4.2 Ordinary Course Liabilities.............................16
4.3 Administrative Reclamation Claims.......................16
4.4 Cure Cost Claims........................................16
4.5 Priority Tax Claims.....................................16
ARTICLE V...............................................................17
TREATMENT OF CLAIMS AND INTERESTS.......................................17
5.1 CLASS 1. Priority Claims...............................17
5.2 CLASS 2. The SunTrust Claims...........................17
5.3 CLASS 3. Miscellaneous Secured Claims..................17
5.4 CLASS 4. Convenience Claims............................17
5.5 CLASS 5. Old Senior Subordinated Notes Claims..........18
5.6 CLASS 6. General Unsecured Claims......................18
5.7 CLASS 7. Landlord Settlement Agreement Claim...........18
5.8 CLASS 8. Old Common Stock..............................19
5.9 CLASS 9. Claims for Issuance of Old Common Stock.......19
5.10 CLASS 10. Intercompany Claims..........................19
5.11 CLASS 11. Intercompany Interests.......................19
5.12 Post-Petition Interest..................................19
5.13 Allocation Between Principal and Accrued Interest.......19
ARTICLE VI..............................................................20
MEANS FOR EXECUTION OF THE PLAN.........................................20
6.1 Implementation of Plan..................................20
6.2 General Corporate Matters...............................20
6.2.1 Cancellation of Old Securities, Instruments
and Agreements Relating to Impaired Claims
and Interests..................................20
6.2.2 Effectiveness of Securities,
Instruments and Agreements.....................20
6.2.3 Corporate Action...............................21
6.2.4 Management and Board of Directors..............21
6.2.5 New Stock Options..............................22
6.2.6 Substantive Consolidation......................22
6.2.7 Extinguishment of Guarantee....................22
6.2.8 Continued Corporate Existence and Vesting
of Assets in Reorganized PHI and the Other
Reorganized Debtors............................22
6.3 Distribution............................................23
6.3.1 Generally......................................23
6.3.2 Distributions to the Holder of SunTrust Claims.23
6.3.3 Distributions to Holders of Old Senior
Subordinated Notes Claims......................23
6.3.4 Distributions to Holders of Other Claims
and Interests..................................24
6.3.5 Compensation for Services Related to
Distribution...................................24
6.3.6 Delivery of Distributions and Undeliverable
or Unclaimed Distributions.....................24
6.3.7 Distribution Record Date.......................25
6.3.8 Means of Cash Payments.........................25
6.3.9 Fractional Plan Securities.....................26
6.3.10 Surrender of Canceled Instruments or
Securities.....................................26
6.3.11 Setoff.........................................27
6.4 Indenture Trustee Charging Liens........................27
6.5 Retiree Benefits........................................28
6.6 Exemptions from Securities Laws and Registration Rights.28
ARTICLE VII.............................................................29
ACCEPTANCE OR REJECTION OF THE PLAN.....................................29
7.1 Classes Entitled to Vote................................29
7.2 Class Acceptance Requirement............................29
7.3 Confirmation Notwithstanding Rejection of Plan by an
Impaired Class..........................................29
ARTICLE VIII............................................................30
PROCEDURE FOR RESOLVING DISPUTED CLAIMS.................................30
8.1 Unimpaired Claims Generally.............................30
8.1.1 Debtor Actions; Reservation of Rights..........30
8.1.2 Creditor Actions...............................30
8.2 Rejection Claims........................................30
8.3 Disputed Claims.........................................31
8.4 Authority to Oppose Claims..............................31
8.5 Treatment of Disputed Claims and Disputed Interests.....31
ARTICLE IX............................................................. 31
EXECUTORY CONTRACTS.....................................................31
9.1 General Treatment.......................................31
9.2 Bar to Rejection Damages................................31
9.3 Cure of Defaults for Executory Contracts and
Unexpired Leases........................................32
ARTICLE X...............................................................32
CONDITIONS TO CONFIRMATION AND THE OCCURRENCE OF THE EFFECTIVE DATE.....32
10.1 Conditions to Confirmation..............................32
10.2 Conditions to the Occurrence of the Effective Date......33
ARTICLE XI............................................................. 33
EFFECTS OF CONFIRMATION AND EFFECTIVENESS OF PLAN.......................33
11.1 Discharge of Claims.....................................33
11.2 Discharge of Debtors....................................34
11.3 Survival of Indemnification Claims and Obligations......34
11.4 Termination of Claims of Contractual Subordination
Against Holders of Old Senior Subordinated
Notes Claims............................................34
ARTICLE XII.............................................................35
RELEASES AND INJUNCTIONS................................................35
12.1 Releases................................................35
12.2 No Liability for Solicitation or Participation..........36
12.3 Limitation of Liability.................................36
12.4 General Injunction......................................36
12.5 Section 346 Injunction..................................37
ARTICLE XIII............................................................37
RETENTION OF JURISDICTION...............................................37
13.1 Scope of Jurisdiction...................................37
13.2 Failure of the Bankruptcy Court to Exercise
Jurisdiction............................................38
ARTICLE XIV.............................................................38
MISCELLANEOUS PROVISIONS................................................38
14.1 Compliance With Tax Requirements........................38
14.2 Discharge of Old Indenture Trustee......................38
14.3 Post-Effective Date Fees and Expenses of Professionals..39
14.4 Vesting of Property of the Debtors......................39
14.5 Causes of Action........................................39
14.6 Assumption of Liabilities...............................39
14.7 Other Documents and Actions.............................40
14.8 Section 1146 Exemption..................................40
14.9 Binding Effect..........................................40
14.10 Governing Law...........................................40
14.11 Filing of Additional Documents..........................41
14.12 Dissolution of Creditors' Committee.....................41
14.13 Amendments and Modifications............................41
14.14 Revocation..............................................41
14.15 Severability............................................41
14.16 Notices.................................................42
14.17 De Minimis Distributions................................42
14.18 Plan and Plan Documents Control.........................42
<PAGE>
EXHIBITS
1 Form of Amended and Restated PHI Certificate of Incorporation
2 Form of Amended and Restated PHI By-Laws
3 Form of New Senior Secured Notes Indenture
4 Form of New Senior Secured Notes Security and Pledge Agreement
5 Form of New Working Capital Facility
6 Form of Working Capital Facility Security and Pledge Agreement
7 Form of New Secured PIK Notes Indenture
8 Form of New Secured PIK Notes Security and Pledge Agreement
9 Intercreditor and Collateral Agency Agreement
10 Form of New Warrant Agreement
11 Form of New Warrants
12 Form of Registration Rights Agreement
ANNEXES
A Summary of Terms of New Senior Secured Notes
B Summary of Terms of New Secured PIK Notes
C Summary of Terms of New Warrants
<PAGE>
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
The following terms used in the Plan shall, unless the context
otherwise clearly requires, have the meanings specified below, and such meanings
shall be equally applicable to both the singular and plural forms of such terms.
1.1 "ADMINISTRATIVE CLAIM" means a Claim or expense allowed under
Section 503(b) of the Bankruptcy Code that is entitled to priority under Section
507(a)(1) of the Bankruptcy Code, including, without limitation, amounts
required to be paid in connection with any assumption of executory contracts and
unexpired leases, Administrative Reclamation Claims and all Post-Petition Trade
Claims.
1.2 "ADMINISTRATIVE RECLAMATION CLAIM" means that portion of a
reclamation Claim entitled to Administrative Claim status pursuant to an order
of the Bankruptcy Court entered under 11 U.S.C.ss.546(c).
1.3 "ALLOWED" means with respect to any Claim or Interest, a Claim or
Interest as to which (i) no objection to the allowance thereof, or motion to
estimate for purposes of allowance, shall have been Filed on or before any
applicable period of limitation that may be fixed by the Bankruptcy Code, the
Bankruptcy Rules and/or the Bankruptcy Court, or (ii) as to which any objection,
or motion to estimate for purposes of allowance shall have been so Filed, to the
extent allowed by a Final Order.
1.4 "ALLOWED CLAIM" means a Claim, or a portion thereof, including any
guarantee by any Debtor of such debt, if any, (i) that is deemed Allowed under
the Plan, (ii) that has been scheduled by a Debtor other than as contingent,
disputed or unliquidated, (iii) proof of which has been timely filed with the
Bankruptcy Court and as to which the period of time in which to file objections
as fixed by the Bankruptcy Code, the Bankruptcy Rules, the Plan or an order of
the Bankruptcy Court, has expired with no such objection having been filed, or
(iv) that has been Allowed by a Final Order of the Bankruptcy Court.
1.5 "ALLOWED INTEREST" means an Interest (i) that is deemed Allowed
under the Plan, (ii) that has been scheduled by a Debtor, (iii) proof of which
has been timely filed with the Bankruptcy Court and as to which the period of
time in which to file objections as fixed by the Bankruptcy Code, the Bankruptcy
Rules, the Plan or an order of the Bankruptcy Court, has expired with no such
objection having been filed, or (iv) that has been Allowed by a Final Order of
the Bankruptcy Court.
1.6 "AMENDED PHI ARTICLES" means the amended and restated certificate
of incorporation of Reorganized PHI that shall become effective on the Effective
Date, substantially in the form Filed as EXHIBIT 1 to this Plan at or prior to
the Confirmation Hearing.
1.7 "AMENDED PHI BY-LAWS" means the fourth amended and restated
by-laws of Reorganized PHI that shall become effective on the Effective Date,
substantially in the form Filed as EXHIBIT 2 to this Plan at or prior to the
Confirmation Hearing.
1.8 "AVOIDANCE ACTION" means an action pursuant to Sections 544, 545,
547, 548, 549, 550 or 553 of the Bankruptcy Code brought by the Debtors or their
assigns, if any.
1.9 "BANKRUPTCY CODE" means Title 11 of the United States Code, as now
in effect and as hereafter amended.
1.10 "BANKRUPTCY COURT" means the United States Bankruptcy Court for
the District of Delaware, or any other court of competent jurisdiction
exercising jurisdiction over the Chapter 11 Cases, including the United States
District Court for the District of Delaware.
1.11 "BANKRUPTCY RULES" means the Federal Rules of Bankruptcy
Procedure, as amended and promulgated under Section 2075, Title 28, United
States Code.
1.12 "BAR DATE" means the date established by the Bankruptcy Court as
the Bar Date pursuant to the Bar Date Order.
1.13 "BAY HARBOUR AGREEMENT" means an agreement between PHI and Bay
Harbour Management, L.C. to be executed prior to the Confirmation Date if PHI
determines to accept Bay Harbour's proposed terms whereby Bay Harbour shall
acquire the balance, if any, of the New Senior Secured Notes and a Pro Rata
portion of the Cash and New Class A Common Stock fee related to those Notes that
are not subscribed to by Electing Class 5 Holders. The terms of the New Senior
Secured Notes as currently set forth in Annex A to the Plan may be modified in
the Bay Harbour Agreement, but not in a manner materially adverse to PHI or
other classes of Creditors or Interests under the Plan.
1.14 "BAR DATE ORDER" means the Order (1) Establishing Procedures and
Deadlines for Filing Proofs of Claims and (2) Approving Form and Manner of
Notice, signed by the Bankruptcy Court on or after the Petition Date, as amended
or supplemented from time to time.
1.15 "BUSINESS DAY" means any day except a Saturday, Sunday, or any
other day on which commercial banks are authorized by law to close in the State
of New York.
1.16 "CASH" means cash or cash equivalents.
1.17 "CASH COLLATERAL ORDER" means one or more Order(s) authorizing
use of cash collateral as defined in Section 363(a) of the Bankruptcy Code of
SunTrust and Pro Player, Inc. entered by the Bankruptcy Court on or after the
Petition Date.
1.18 "CELEBRITIES" means actors or actresses in motion picture or
television programs and sports figures who, in the opinion of management of the
Reorganized Debtors, have achieved celebrity status and whose affiliation with
the Debtors or the Reorganized Debtors is beneficial to the Debtors' or the
Reorganized Debtors' business.
1.19 "CELEBRITY OPTIONS" means options to purchase Class A common
stock issued to Celebrities prior to the Petition Date.
1.20 "CHAPTER 11" means Chapter 11 of the Bankruptcy Code.
1.21 "CHAPTER 11 CASES" means the cases under Chapter 11 with respect
to the Debtors, pending in the District of Delaware and administered as IN RE
PLANET HOLLYWOOD INTERNATIONAL, INC., ET AL., Chapter 11 Case Nos. 99-3612
(JJF) through 99-3637 (JJF).
1.22 "CHAPTER 11 SCHEDULES" means the Schedules of Assets and
Liabilities and the Statements of Financial Affairs Filed by the Debtors with
the Bankruptcy Court, in the form Filed or as thereafter amended, modified or
supplemented in accordance with the Bankruptcy Code, the Bankruptcy Rules, and
the Bankruptcy Court's local bankruptcy rules.
1.23 "CLAIM" means (i) any right to payment from any Debtor arising
before the Confirmation Date, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (ii) any right to an
equitable remedy against any Debtor arising before the Confirmation Date for
breach of performance if such breach gives rise to a right of payment from such
Debtor, whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed, secured or
unsecured, and shall include any guarantee by any Debtor of such right, if any.
1.24 "CLASS" means a class of Claims or Interests as defined in
Article II of the Plan.
1.25 "CLASS 6 ADJUSTMENT AMOUNT" means the face amount of New Secured
PIK Notes which, together with all other consideration provided for in Section
5.6 of the Plan, is necessary to ensure the recovery by Holders of Allowed Class
6 Claims of an aggregate value as a percentage of their Allowed Claims equal to
the aggregate value of the consideration to be received by Holders of Allowed
Class 5 Claims as a result of their receipt of the Supplemental Class 5
Distribution and all other consideration provided to them in Section 5.5 of the
Plan.
1.26 "COLLATERAL AGENT" means the entity designated to serve as
collateral agent under the Intercreditor and Collateral Agency Agreement with
respect to the Working Capital Facility, the New Senior Secured Notes Indenture
and the New Secured PIK Notes Indenture.
1.27 "CONFIRMATION" means the entry of the Confirmation Order by the
Bankruptcy Court pursuant to Section 1129 of the Bankruptcy Code.
1.28 "CONFIRMATION DATE" means the date on which the Confirmation
Order is entered in the Chapter 11 Cases by the Bankruptcy Court.
1.29 "CONFIRMATION HEARING" means the hearing or hearings pursuant to
which the Bankruptcy Court enters the Confirmation Order.
1.30 "CONFIRMATION ORDER" means an order of the Bankruptcy Court
confirming the Plan pursuant to Section 1129 of the Bankruptcy Code.
1.31 "CONSOLIDATED CLAIM" means any Claim of any Consolidated Debtor
against any other Consolidated Debtor.
1.32 "CONSOLIDATED DEBTORS" means PHI and all Filed Subsidiaries.
1.33 "CONSOLIDATED ESTATES" means the substantively consolidated
estates of PHI and all Filed Subsidiaries.
1.34 "CONVENIENCE CLAIM" means Unsecured Claims in Allowed amounts
not to exceed $2,000, or that are voluntarily reduced to $2,000.
1.35 "CREDITOR" means any entity that is the holder of any Claim
against the Debtors that arose on or before the Petition Date or any Claim
against the Debtors' Estates of a kind specified in Sections 502(g), 502(h), or
502(i) of the Bankruptcy Code.
1.36 "CREDITORS' COMMITTEE" means the official committee of unsecured
creditors appointed in the Chapter 11 Cases by the United States Trustee
pursuant to Section 1102 of the Bankruptcy Code, as reconstituted by the
addition or removal of members from time to time.
1.37 "CURE COST CLAIM" means the amount required to cure pre-petition
defaults on leases or contracts that are assumed by any of the Debtors pursuant
to 11 U.S.C.ss.365.
1.38 "DEBTOR" or "DEBTORS" means PHI or any other Filed Subsidiary,
individually or collectively, as the context may require.
1.39 "DISCLOSURE STATEMENT" means the First Amended Joint Disclosure
Statement dated December 13, 1999, that was Filed by the Debtors in connection
with the Plan, as further amended, modified, restated, or supplemented from time
to time.
1.40 "DISPUTED CLAIM" means any Claim, to the extent it has not since
become an Allowed Claim, including those (i) listed on the Chapter 11 Schedules
as unliquidated, disputed or contingent, or (ii) as to which the Debtors or any
other party in interest has interposed a timely objection or request for
estimation in accordance with the Bankruptcy Code and the Bankruptcy Rules,
which objection or request for estimation has not been withdrawn or determined
by a Final Order.
1.41 "DISPUTED INTEREST" means an Interest in the Debtors to the
extent it has not become an Allowed Interest including those (i) listed on the
Chapter 11 Schedules as contingent, unliquidated or disputed, or (ii) as to
which the Debtors or any other party in interest has interposed a timely
objection in accordance with the Bankruptcy Code and the Bankruptcy Rules, which
objection has not been withdrawn or determined by a Final Order.
1.42 "DISTRIBUTION RECORD DATE" means the date specified in the
Confirmation Order as the Distribution Record Date with respect to each Class,
or, if no such date is specified, the fifth Business Day prior to the Effective
Date.
1.43 "DOMESTIC SUBSIDIARY" means any entity incorporated or formed
under the laws of the United States of America or any state, province or
territory thereof, that is wholly-owned or otherwise controlled by PHI or by PHI
and/or one or more of its subsidiaries.
1.44 "EFFECTIVE DATE" means a Business Day selected by the Debtors
that is the later of (i) a day that is not less than ten (10) nor more than
thirty (30) days after the Confirmation Date, and (ii) the first Business Day on
which all conditions to the occurrence of the Effective Date have been satisfied
or duly waived, or such other date as agreed to by the Debtors and the
Creditors' Committee.
1.45 "ELECTING HOLDERS OF CLASS 5 CLAIMS" means those Holders of
Class 5 Claims that have elected to receive their Pro Rata share of New Senior
Secured Notes, a fee of $625,000 Cash and New Class A Common Stock, which
election shall be evidenced by checking a box on the Class 5 Ballot sent to
Holders of Class 5 Claims providing for an affirmative participation in the New
Senior Secured Notes.
1.46 "ENCUMBRANCE" means any Lien, imperfection of title, option, or
restriction of any kind affecting any property of any Debtor.
1.47 "ENTITY" means a person, a corporation, a partnership, an
association, a joint stock company, a joint venture, a limited liability
company, an estate, a trust, an unincorporated organization, a government or any
subdivision thereof or any other entity.
1.48 "ESTATES" means the estates of the Debtors created under Section
541 of the Bankruptcy Code upon the commencement of the Chapter 11 Cases.
1.49 "FILE," "FILED" or "FILING" means file, filed or filing with the
Bankruptcy Court in the Chapter 11 Cases or any other Court with jurisdiction
over the cases of the Debtors or a Filed Foreign Subsidiary.
1.50 "FILED FOREIGN SUBSIDIARY" means a Foreign Subsidiary that has
filed an insolvency proceeding under the laws of its jurisdiction of
incorporation or formation.
1.51 "FILED SUBSIDIARIES" means all subsidiaries of PHI and/or one or
more of its subsidiaries that Files a Chapter 11 petition in the Bankruptcy
Court.
1.52 "FINAL ORDER" means an order of the Bankruptcy Court or any other
court of competent jurisdiction (i) which is not subject to a stay of
effectiveness; (ii) as to which the time to appeal, petition for certiorari or
move for reargument or rehearing has expired and as to which no timely appeal,
petition for certiorari or other proceedings for reargument or rehearing shall
then be pending; or (iii) if a timely appeal, writ of certiorari, reargument or
rehearing thereof has been sought, which shall have been affirmed by the highest
court to which such order was appealed, or certiorari shall have been denied or
reargument or rehearing shall have been denied or resulted in no modification of
such order, and the time to take any further appeal, petition for certiorari, or
move for modification of such order, or move for reargument or rehearing shall
have expired; PROVIDED, HOWEVER, that the possibility that a motion under Rule
59 or Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule
under the Bankruptcy Rules or other rules governing procedure in cases before
the Bankruptcy Court may be Filed with respect to such order shall not cause
such order not to be a Final Order.
1.53 "FOREIGN SUBSIDIARY" means any entity incorporated or formed
under the laws of a country other than the United States of America which is
wholly-owned or otherwise controlled by PHI or by PHI and/or one or more of its
subsidiaries.
1.54 "FRANCHISE AGREEMENTS" means agreements between PHI and various
third parties for the license and use of PLANET HOLLYWOOD or OFFICIAL ALL STAR
CAFE trademarks, tradenames and related intellectual property.
1.55 "GENERAL UNSECURED CLAIM" means any claim (including any Trade
Claim, Rejection Claim or Litigation Claim) that is not a Consolidated Claim,
Old Senior Subordinated Notes Claim, Intercompany Claim, Administrative Claim,
Priority Claim, SunTrust Claim, Miscellaneous Secured Claim, Indenture Trustee
Claim or a Landlord Settlement Agreement Claim.
1.56 "HOLDER" means an Entity which is the owner, legal and/or
beneficial, of a Claim against or Interest in one or more Debtor, as the case
may be.
1.57 "IMPAIRED CLAIM" means a Claim identified in Section 3.1 of the
Plan as impaired under the Plan.
1.58 "INDENTURE TRUSTEE CHARGING LIEN" means any Lien or other
priority in payment available to the Old Indenture Trustee pursuant to the Old
Indenture for payment of any fees, costs or disbursements incurred by such Old
Indenture Trustee, to the extent not otherwise paid under the Plan.
1.59 "INDENTURE TRUSTEE CLAIM" means a contractual Claim held by the
Old Indenture Trustee for compensation, reimbursement of costs or disbursements
(including without limitation the costs and expenses of its attorneys,
accountants and financial advisors), or indemnity arising from the Old Indenture
regardless of whether such fees and expenses are incurred prior or subsequent to
the Petition Date.
1.60 "INTERCOMPANY CLAIM" means any Claim against any of the Debtors
held by any Subsidiary or Foreign Subsidiary other than any of the Consolidated
Debtors, that continues to operate its business subsequent to the Effective
Date.
1.61 "INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT" means the
agreement governing the respective rights in property of the Debtors securing
parties to the Working Capital Facility, the New Senior Secured Notes Indenture,
and the New Secured PIK Notes Indenture substantially in the form Filed as
Exhibit "9" to the Plan at or prior to the Confirmation Hearing.
1.62 "INTEREST" means an equity security in PHI within the meaning of
Section 101(16) of the Bankruptcy Code.
1.63 "JOINT VENTURES" means strategic venture agreements PHI and one
or more of its Subsidiaries has executed with third parties.
1.64 "LANDLORD SETTLEMENT AGREEMENT" means an agreement between PHI
or any of its Filed Subsidiaries and a landlord regarding the restructuring,
termination or sale of a Debtor's leasehold rights and obligations, which
requires approval or ratification of such agreement by the Bankruptcy Court.
1.65 "LEASEHOLD GUARANTEES" means a guaranty by PHI of any lease
between PHI or any of its Subsidiaries or Joint Ventures as lessee and any
lessor.
1.66 "LIEN" means any conveyance in trust, assignment or pledge of,
mortgage or lien on, security interest in, or charge or encumbrance of any kind
against, any property of any Debtor.
1.67 "LITIGATION CLAIM" means a claim arising from a pre-Petition
Date dispute between PHI or a Filed Subsidiary and any third party which was not
settled, liquidated or resolved as of the Petition Date.
1.68 "MISCELLANEOUS SECURED CLAIM" means any Allowed Claim that is a
Secured Claim other than the SunTrust Claim.
1.69 "NEW CLASS A COMMON STOCK" means the approximately 3.0 million
shares of authorized common stock of Reorganized PHI, par value $.01 per share,
to be issued under the Plan.
1.70 "NEW CLASS B COMMON STOCK" means the 7.0 million shares of
authorized common stock of Reorganized PHI, par value $.01 per share, to be
issued to the New Money Investors under the Plan.
1.71 "NEW COMMON STOCK" means, collectively, the New Class A Common
Stock, the New Class B Common Stock, and any other common stock of Reorganized
PHI authorized to be issued pursuant to the Plan.
1.72 "NEW INDENTURE TRUSTEE" shall be as designated at the
Confirmation Hearing and have the meaning set forth in the Confirmation Order.
1.73 "NEW MONEY INVESTORS" means certain entities that have agreed to
acquire 7.0 million shares of New Class B Common Stock for $30 million ($4.2857
per share).
1.74 "NEW OPTIONS" means 1.0 million options each for the purchase of
one share of New Class A Common Stock.
1.75 "NEW SECURED PIK NOTES" means the secured PIK notes to be issued
by Reorganized PHI pursuant to the Plan under the New Secured PIK Notes
Indenture and guaranteed by all operating Subsidiaries. The principal economic
terms of the New Secured PIK Notes are set forth on ANNEX B hereto.
1.76 "NEW SECURED PIK NOTES INDENTURE" means the Indenture between
Reorganized PHI, as issuer, and the New Secured PIK Notes Indenture Trustee, as
trustee, which indenture relates to the New Secured PIK Notes, substantially in
the form to be Filed as EXHIBIT 7 to the Plan at or prior to the Confirmation
Hearing.
1.77 "NEW SECURED PIK NOTES INDENTURE TRUSTEE" shall be as designated
at the Confirmation Hearing and have the meaning set forth in the Confirmation
Order.
1.78 "NEW SECURED PIK NOTES SECURITY AND PLEDGE AGREEMENT" means the
Security and Pledge Agreement pursuant to which certain collateral is pledged to
secure Reorganized PHI's obligations under the New Secured PIK Notes,
substantially in the form to be Filed as EXHIBIT 8 to the Plan at or prior to
the Confirmation Hearing.
1.79 "NEW SENIOR SECURED NOTES" means the senior secured notes to be
issued by Reorganized PHI pursuant to the Plan under the New Senior Secured
Notes Indenture. The principal economic terms of the New Senior Secured Notes
are set forth on ANNEX A hereto.
1.80 "NEW SENIOR SECURED NOTES INDENTURE" means the Indenture between
Reorganized PHI, as issuer, and the New Senior Secured Notes Indenture Trustee,
as trustee, which indenture relates to the New Senior Secured Notes,
substantially in the form to be Filed as EXHIBIT 3 to the Plan at or prior to
the Confirmation Hearing.
1.81 "NEW SENIOR SECURED NOTES INDENTURE TRUSTEE" shall be as
designated at the Confirmation Hearing and have the meaning set forth in the
Confirmation Order.
1.82 "NEW SENIOR SECURED NOTES SECURITY AND PLEDGE AGREEMENT" means
the Security and Pledge Agreement pursuant to which certain collateral is
pledged to secure Reorganized PHI's obligations under the New Senior Secured
Notes, substantially in the form Filed as EXHIBIT 4 to the Plan at or prior to
the Confirmation Hearing.
1.83 "NEW STOCK OPTION PLAN" means one or more stock option plans to
be implemented by Reorganized PHI providing for the issuance to management and
Celebrities of options to purchase up to 1.0 million shares of New Class A
Common Stock on a fully diluted basis.
1.84 "NEW WARRANT AGENT" shall be as designated at the Confirmation
Hearing and shall have the meaning set forth in the Confirmation Order.
1.85 "NEW WARRANT AGREEMENT" means the Warrant Agreement between
Reorganized PHI, as issuer, and the New Warrant Agent, as agent, which agreement
relates to the New Warrants, substantially in the form to be Filed as EXHIBIT 10
to the Plan at or prior to the Confirmation Hearing. The terms of the New
Warrants are set forth in the Summary of New Warrants attached hereto as ANNEX
C.
1.86 "NEW WARRANTS" means the freely transferable warrants issued
pursuant to the New Warrant Agreement evidencing the right to purchase up to
200,000 shares of New Class A Common Stock, which shall expire three (3) years
from the Effective Date, and which shall have an exercise price of $65.50 per
share, substantially in the form to be Filed as EXHIBIT 11 to the Plan at or
prior to the Confirmation Hearing.
1.87 "OLD CELEBRITY OPTIONS" means any outstanding options for the
purchase of Class A Old Common Stock issued to Celebrities prior to the Petition
Date.
1.88 "OLD COMMON STOCK" means, collectively, the Class A and Class B
common shares, par value $.01 per share, of PHI, issued and outstanding, or held
in treasury, immediately prior to the Effective Date.
1.89 "OLD EMPLOYEE OPTIONS" means any outstanding options for the
purchase of Class A Old Common Stock, issued to officers, employees and
independent contractors prior to the Petition Date.
1.90 "OLD INDENTURE" means the Old Senior Subordinated Notes
Indenture.
1.91 "OLD INDENTURE TRUSTEE" means United States Trust Company of New
York, or its successor, as trustee under the Old Senior Subordinated Notes
Indenture.
1.92 "OLD SECURITY" or "OLD SECURITIES" means the Old Senior
Subordinated Notes, the Old Common Stock, the Old Warrants, the Old Celebrity
Options and the Old Employee Options, individually or collectively, as the
context may require.
1.93 "OLD SENIOR SUBORDINATED NOTES" means the 12% Senior
Subordinated Notes due 2005, issued by PHI pursuant to the Old Senior
Subordinated Notes Indenture.
1.94 "OLD SENIOR SUBORDINATED NOTES CLAIM" means any Claim of a
Holder of Old Senior Subordinated Notes which, for purposes of the Plan, shall
be deemed to be an amount equal to the sum of (i) the outstanding principal
amount, as of the Petition Date, of Old Senior Subordinated Notes held by such
Holder, and (ii) an amount equal to 100% of the accrued and unpaid interest at
the rate of 12% per annum plus interest on defaulted interest at the rate of 13%
per annum and other amounts that specifically arise under the Old Senior
Subordinated Notes Indenture, exclusive of amounts covered by the Indenture
Trustee Claim, and the Old Senior Subordinated Notes Indenture through but not
including the Petition Date.
1.95 "OLD SENIOR SUBORDINATED NOTES INDENTURE" means the Indenture
between PHI, as issuer, and the Old Senior Subordinated Notes Indenture Trustee,
as trustee, dated as of March 25, 1998, as amended, which Indenture relates to
the Old Senior Subordinated Notes.
1.96 "OLD TRANSFER AGENT" means as registrar and transfer agent with
respect to the Old Common Stock.
1.97 "OLD WARRANTS" means any warrants outstanding as of the Petition
Date to purchase shares of Old Common Stock.
1.98 "ORDINARY COURSE PROFESSIONALS ORDER" means the Order
Authorizing Debtors to Employ and Compensate Professionals for Specific Services
Rendered in the Ordinary Course of Business, which was signed by the Bankruptcy
Court on October 13, 1999, as amended from time to time.
1.99 "PETITION DATE" means October 12, 1999, the date on which the
Debtors filed their voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code.
1.100 "PHI" means Planet Hollywood International, Inc., a Delaware
corporation.
1.101 "PLAN" means this Joint Plan of Reorganization proposed by the
Debtors, as it may hereafter be amended or modified from time to time.
1.102 "PLAN DOCUMENTS" means those documents identified in Exhibits 1
through 12 which will be Filed at or prior to the Confirmation Hearing.
1.103 "PLAN SECURITIES" means the New Common Stock issuable pursuant
to the Plan, the New Senior Secured Notes, the New Secured PIK Notes, the New
Warrants and the shares of New Class A Common Stock issuable upon exercise of
the New Warrants, the New Options and the shares of New Class A Common Stock
issuable upon exercise of the New Options.
1.104 "POST-PETITION TRADE CLAIM" means an expense or obligation
incurred by any of the Debtors arising from or with respect to the sale and
delivery of goods or the rendition of services (except for fees and
disbursements of Professionals) to any of the Debtors after the Petition Date.
1.105 "PRIORITY CLAIM" means any Allowed Claim, to the extent
entitled to priority under Section 507 (a) of the Bankruptcy Code, other than an
Administrative Claim or a Priority Tax Claim, against any Debtor.
1.106 "PRIORITY TAX CLAIM" means the tax Claims of governmental units
to the extent such Claims are entitled to priority under Section 507(a)(8) of
the Bankruptcy Code.
1.107 "PROFESSIONAL" means (i) any professional retained in the
Chapter 11 Cases pursuant to an order of the Bankruptcy Court in accordance with
Sections 327 or 1103 of the Bankruptcy Code (other than the Ordinary Course
Professionals Order), (ii) any attorney or accountant seeking compensation or
reimbursement of expenses pursuant to Section 503(b) of the Bankruptcy Code,
(iii) any Entity whose fees and expenses are subject to approval by the
Bankruptcy Court as reasonable pursuant to Section 1129(a)(4) of the Bankruptcy
Code, and (iv) any attorney, accountant or financial advisor for the Old
Indenture Trustee.
1.108 "PRO RATA" means, with respect to any amount of consideration
to be distributed to a Creditor holding an Allowed Claim or Holder of an Allowed
Interest of a particular Class on a particular date, a proportionate share, so
that the ratio of the consideration distributed on account of an Allowed Claim
or Allowed Interest in a Class to the amount of such Allowed Claim or Allowed
Interest is the same as the ratio of the aggregate amount of the consideration
distributed on account of all Allowed Claims or Allowed Interests in such Class
to the aggregate amount of all Allowed Claims or Allowed Interests in such
Class.
1.109 "REGISTRATION RIGHTS AGREEMENT" shall have the meaning set
forth in Section 6.6(b) of this Plan.
1.110 "REJECTION CLAIM" means the Claim, if any, of parties other
than any of the Debtors to executory contracts or unexpired leases with any of
the Debtors which are rejected or deemed rejected pursuant to a Final Order.
1.111 "RELEASES" shall have the meaning set forth in Section 12.1 of
this Plan.
1.112 "REORGANIZED PHI" means PHI from and after the Effective Date.
1.113 "REORGANIZED DEBTORS" means any or all of the Debtors from and
after the Effective Date.
1.114 "SECURED CLAIM" means any Claim which is wholly or partially
secured by a valid Lien, which has been properly perfected as required by
applicable law on property of the Debtors to the extent of the value of the
interest of the Holder of such Claim in such property of the Debtors, or that is
subject to set-off under Section 553 of the Bankruptcy Code as determined by the
Bankruptcy Court pursuant to Section 506(a) of the Bankruptcy Code.
1.115 "SECURITIES ACT" means the Securities Act of 1933, as amended.
1.116 "SHELF REGISTRATION STATEMENT" shall have the meaning set forth
in Section 6.6(b) of this Plan.
1.117 "SUBSIDIARIES" means the Domestic Subsidiaries and the Foreign
Subsidiaries, collectively.
1.118 "SUNTRUST" means SunTrust Bank, Central Florida, National
Association.
1.119 "SUNTRUST AGREEMENTS" means, collectively, (i) the Amended and
Restated Revolving Credit Agreement dated March 25, 1998, as amended, which was
executed by SunTrust, individually and as Administrative Agent and Agent, and
PHI, including the Synthetic Lease, Interest Rate Swap and Letter of Credit
agreements executed in connection therewith (respectively, the "Revolving Credit
Agreement," the "Synthetic Lease," the "Interest Rate Swap" and the "Letter of
Credit Facility"); (ii) the Security Agreement dated March 25, 1998, as amended,
which was executed by SunTrust as Agent, PHI and Planet Hollywood (Region IV),
Inc.; and (iii) the Guaranty Agreement dated March 25, 1998 as subsequently
ratified, which was executed by PHI and its material subsidiaries.
1.120 "SUNTRUST CLAIM" means the outstanding balance due on the
Letter of Credit Facility of the Sun Trust Agreements (in the amount of
approximately $2.5 million as of the Petition Date).
1.121 "SUPPLEMENTAL CLASS 5 DISTRIBUTION" shall have the meaning set
forth in Section 5.5 of the Plan.
1.122 "TRADE CLAIM" means any unsecured Claim arising from or with
respect to (i) the sale and delivery of goods, or the rendition of services, to
the Debtors prior to the Petition Date; and (ii) all other obligations incurred
in the ordinary course, conduct and operation of the Debtors' businesses prior
to the Petition Date.
1.123 "TREASURY RATE" means the "underpayment rate" (as defined in
Section 6612(a)(2) of the Internal Revenue Code of 1986, as amended) on the
Business Day immediately preceding the Confirmation Date which rate is the rate
of interest charged by the Internal Revenue Service on delinquent federal income
taxes.
1.124 "UNCONSOLIDATED AFFILIATES" means affiliated companies which
are not majority owned by PHI or its Subsidiaries, consisting of PH Asia, ECE,
and Planet Hollywood Hospitality, Inc.
1.125 "UNIMPAIRED CLAIM" means a Claim in a Class identified in
Section 3.2 of the Plan as unimpaired thereunder.
1.126 "UNOFFICIAL NOTEHOLDERS' COMMITTEE" means the committee of
holders of Old Senior Subordinated Notes formed prior to the Petition Date,
representing holders of in excess of $160 million principal amount of the Old
Senior Subordinated Notes.
1.127 "UNOFFICIAL NOTEHOLDERS' COMMITTEE SUBSTANTIAL CONTRIBUTION
CLAIM" means the Claim, if any, of the Unofficial Noteholders' Committee for
reimbursement of the reasonable unpaid post-Petition Date fees and expenses of
its legal and financial advisors, which amount PHI has agreed to pay pursuant to
the Plan.
1.128 "WORKING CAPITAL FACILITY" means a post-Effective Date working
capital facility in an amount not to exceed $15 million substantially in the
form Filed as Exhibit "5" to the Plan at or prior to the Confirmation Hearing.
1.129 "WORKING CAPITAL FACILITY SECURITY AND PLEDGE AGREEMENT" means
the Security and Pledge Agreement pursuant to which certain collateral may be
pledged to secure Reorganized PHI's obligations under the Working Capital
Facility, substantially in the form Filed as EXHIBIT 6 to the Plan at or prior
to the Confirmation Hearing.
1.130 "WORKING CAPITAL LENDER" means the provider(s) of the Working
Capital Facility.
RULES OF CONSTRUCTION
1.131 INTERPRETATION AND RULES OF CONSTRUCTION. Unless otherwise
specified, all section, article, schedule, annex and exhibit references in the
Plan are to the respective section in, article of, annex to or schedule or
exhibit to, the Plan, as the same may be amended, waived, or modified from time
to time in accordance with the provisions hereof. The rules of construction
contained in Section 102 of the Bankruptcy Code shall apply to the construction
of the Plan (excluding the Plan Documents, unless made applicable thereto
pursuant to an express provision thereof).
1.132 OTHER TERMS. The words "herein" "hereof," "hereto,"
"hereunder," and others of similar import refer to the Plan as a whole and not
to any particular section, subsection, or clause contained in the Plan. Each
capitalized term used herein that is not defined herein shall have the meaning
ascribed to that term, if any, in the Bankruptcy Code or the Bankruptcy Rules.
1.133 HEADINGS. Headings are used in the Plan for convenience of
reference only and shall not constitute a part of the Plan for any other
purpose. Headings shall not limit or otherwise affect the provisions of the
Plan.
1.134 INCORPORATION OF EXHIBITS. All exhibits referred to in this
Plan are deemed incorporated into, and made a part of this Plan, whether Filed
contemporaneously herewith or hereafter.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
2.1 PRE-PETITION CLAIMS AND EQUITY INTERESTS CLASSIFIED. All Claims
and all Interests are classified as set forth in Section 2.3 hereof. A Claim or
Interest is classified in a particular Class only to the extent that the Claim
or Interest qualifies within the description of that Class, and is classified in
another Class or Classes to the extent that any remainder of the Claim or
Interest qualifies within the description of such other Class or Classes. A
Claim or Interest is classified in a particular Class only to the extent that
the Claim or Interest is an Allowed Claim or Allowed Interest in that Class and
has not been paid, released or otherwise satisfied before the Effective Date. A
Claim or Interest which is not an Allowed Claim or Allowed Interest is not in
any Class and, notwithstanding anything to the contrary contained in the Plan,
no distribution shall be made on account of any Claim or Interest which is not
an Allowed Claim or Allowed Interest. Holders of Claims or Interests shall be
entitled to vote in, and receive distributions from, a particular Class only to
the extent the Allowed Claim or Allowed Interest is within such Class.
2.2 ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS. As provided in
Section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority
Tax Claims against the Debtors shall not be classified for purposes of voting on
or receiving distributions under the Plan. All such Claims shall be treated
separately as unclassified Claims on the terms set forth in Article IV of the
Plan.
2.3 CLAIMS AGAINST AND INTERESTS IN THE DEBTORS. All Claims against,
and Interests in, any of the Debtors are classified as follows:
(a) CLASS 1 CLAIMS Class 1 consists of all Priority Claims.
(b) CLASS 2 CLAIMS Class 2 consists of the SunTrust Claims.
(c) CLASS 3 CLAIMS Class 3 consists of all Miscellaneous
Secured Claims.
(d) CLASS 4 CLAIMS Class 4 consists of all Convenience Claims.
(e) CLASS 5 CLAIMS Class 5 consists of all Old Senior
Subordinated Notes Claims.
(f) CLASS 6 CLAIMS Class 6 consists of all General Unsecured
Claims.
(g) CLASS 7 CLAIMS Class 7 consists of Claims arising from
Landlord Settlement Agreements.
(h) CLASS 8 INTERESTS Class 8 consists of all Interests of
Holders of Old Common Stock.
(i) CLASS 9 CLAIMS FOR ISSUANCE OF OLD COMMON STOCK
Class 9 consists of all Old Warrants, Old
Celebrity Options and Old Employee Options
and all other options or rights to acquire
Old Common Stock, including, without
limitation, all Claims arising out of the
rejection of Old Warrants, Old Celebrity
Options and Old Employee Options and other
options to acquire Old Common Stock, to
the extent they constitute executory
contracts, and any Claim that has the same
priority as the Old Common Stock pursuant
to Section 510(b) of the Bankruptcy Code.
(j) CLASS 10 CLAIMS Class 10 consists of all Intercompany
Claims.
(k) CLASS 11 INTERESTS Class 11 consists of all Interests of PHI
and any Filed Subsidiary in any other
Filed Subsidiary.
ARTICLE III
IDENTIFICATION OF IMPAIRED CLASSES
OF CLAIMS AND EQUITY INTERESTS
3.1 IMPAIRED CLASSES OF CLAIMS AND INTERESTS. Class 5 Claims, Class 6
Claims, Class 8 Interests and Class 9 Claims are impaired under the Plan.
3.2 UNIMPAIRED CLASSES OF CLAIMS AND INTERESTS. Class 1 Claims, Class
2 Claims, Class 3 Claims, Class 4 Claims, Class 7 Claims and Class 10 Claims are
not impaired under the Plan. Class 11 Interests are not impaired.
3.3 IMPAIRMENT CONTROVERSIES. If a controversy arises as to whether
any Claims or Interests, or any Class of Claims or Class of Interests, is
impaired under the Plan, the Bankruptcy Court shall, after notice and a hearing,
resolve such controversy.
ARTICLE IV
TREATMENT OF ADMINISTRATIVE AND PRIORITY TAX CLAIMS
4.1 FEES OF PROFESSIONALS AND CLAIMS FOR SUBSTANTIAL CONTRIBUTION. All
Professionals retained by any Debtor and any other Entities (other than any
Professionals retained by the Old Indenture Trustee, which Professionals shall
be paid in accordance with Section 6.4 of the Plan) requesting compensation or
reimbursement of expenses pursuant to Sections 327, 328, 330, 331, or 503(b) of
the Bankruptcy Code for services rendered before the Confirmation Date
(including, without limitation, any compensation requested by any Professional
or any other Entity for making a substantial contribution in the Chapter 11
Cases shall File and serve on Reorganized PHI, the Creditors' Committee and the
United States Trustee an application for final allowance of compensation and
reimbursement of expenses no later than thirty (30) days after the Effective
Date. Objections to applications of Professionals for compensation or
reimbursement of expenses must be Filed and served on Reorganized PHI, the
United States Trustee, the Creditors' Committee and the Professionals to whose
application the objections are addressed, no later than fifteen (15) days after
service of the related application. Reorganized PHI shall pay the amounts
Allowed by Final Order of the Bankruptcy Court within ten (10) days after the
date of such Order.
4.2 ORDINARY COURSE LIABILITIES. Holders of Administrative Claims
based on liabilities incurred in the ordinary course of the Debtors' business
shall not be required to File any request for payment of such Claims. Such
Administrative Claims shall be assumed and paid by Reorganized PHI pursuant to
the terms and conditions of the particular transactions giving rise to such
Administrative Claims without any further action by the Holders of such Claims
or the need for Bankruptcy Court approval.
4.3 ADMINISTRATIVE RECLAMATION CLAIMS. Allowed Administrative
Reclamation Claims shall be paid in full in Cash on the later of the Effective
Date, the date of allowance of the Reclamation Claim, or such other date as
shall be approved by an order of the Bankruptcy Court.
4.4 CURE COST CLAIMS. Allowed Cure Cost Claims shall be paid in full
in Cash on the later of the Effective Date, the date of allowance of the Cure
Cost Claim, or at such other date as shall be approved by an order of the
Bankruptcy Court.
4.5 PRIORITY TAX CLAIMS. Unless otherwise agreed between the Holder of
a Priority Tax Claim and any Debtor or Reorganized PHI, in accordance with
Section 1129(a)(9)(C) of the Bankruptcy Code, each Holder of an Allowed Priority
Tax Claim shall receive, at such Debtor's or Reorganized PHI's option, as the
case may be, either (i) Cash, in the full amount of such Allowed Priority Tax
Claim on the Effective Date or (ii) deferred payments of Cash in the full amount
of such Allowed Priority Tax Claim, payable in equal annual principal
installments beginning the first anniversary of the Effective Date and ending on
the earlier of the sixth anniversary of the Effective Date or the sixth
anniversary of the date of the assessment of such Claim, together with interest
(payable quarterly in arrears) on the unpaid balance of such Allowed Priority
Tax Claim at an annual rate equal to the Treasury Rate or such other rate as may
be set by the Bankruptcy Court at the Confirmation Hearing. The amount of any
Allowed Priority Tax Claim for which the time for filing a return, if required,
under applicable law or under any authorized extension thereof, has not expired
on or prior to the Effective Date, and the rights of the Holder of such Claim,
if any, to payment in respect thereof shall (i) be determined in the manner in
which the amount of such Claim and the rights of the Holder of such Claim would
have been resolved or adjudicated if the Chapter 11 Cases had not been
commenced, PROVIDED, HOWEVER, that the Debtors reserve the right to seek a
determination by the Bankruptcy Court of the validity, amount and priority of
any Priority Tax Claim under 11 U.S.C. ss.505, (ii) survive the Effective Date
and consummation of the Plan as if the Chapter 11 Cases had not been commenced,
and (iii) not be discharged pursuant to Section 1141 of the Bankruptcy Code.
ARTICLE V
TREATMENT OF CLAIMS AND INTERESTS
5.1 CLASS 1. PRIORITY CLAIMS. Class 1 Claims are unimpaired. At
Reorganized PHI's option, each Holder of an Allowed Priority Claim shall be
entitled to receive, in full satisfaction of such Claim, the Allowed amount of
such Claim in full in Cash on the later of (i) the Effective Date, (ii) the date
that such Claim becomes an Allowed Priority Claim and (iii) the date that such
Claim would be paid in accordance with any terms and conditions of any
agreements or understandings relating thereto between any Debtor and the Holder
of such Claim.
5.2 CLASS 2. THE SUNTRUST CLAIMS. Allowed Class 2 Claims are
unimpaired. On the Effective Date, each Holder of an Allowed Class 2 Claim shall
receive in full satisfaction of its Allowed Class 2 Claim in Cash, the
outstanding unpaid amount due, if any, under the SunTrust Agreements plus
accrued and unpaid interest, if any, at the non-default contractual rate set
forth in the SunTrust Agreements through the Effective Date, plus Allowed fees,
costs and expenses, if any.
5.3 CLASS 3. MISCELLANEOUS SECURED CLAIMS. Claims 3 Claims are
unimpaired. At Reorganized PHI's option, on the Effective Date each Holder of an
Allowed Miscellaneous Secured Claim shall either be treated in accordance with
Section 1124(2) of the Bankruptcy Code, or in accordance with the terms of any
agreements between the Secured Creditor and any Debtor, as approved by the
Bankruptcy Court.
5.4 CLASS 4. CONVENIENCE CLAIMS. Class 4 Claims are unimpaired. On the
later of the Effective Date, the date of allowance of its Convenience Claim or
such other date as shall be approved by an order of the Bankruptcy Court, each
Holder of an Allowed Claim that is $2,000 or less or reduced to $2,000 or less
shall receive a Cash payment equal to the lesser of $2,000 or the Allowed amount
of the Claim.
5.5 CLASS 5. OLD SENIOR SUBORDINATED NOTES CLAIMS. Class 5 Claims are
impaired. On the Effective Date, each Holder of a Class 5 Claim as of the
Distribution Record Date shall have an Allowed Claim equal to the face amount of
its Old Senior Subordinated Notes plus unpaid accrued interest and interest on
defaulted payments of interest at the default rate provided in the Old Senior
Subordinated Notes Indenture and related documents through the Petition Date,
and shall receive on the Effective Date, in full satisfaction of its Allowed
Class 5 Claim, its Pro Rata share of $47.5 million in Cash, $60 million
principal amount of New Secured PIK Notes, and 2.65 million shares of New Class
A Common Stock. If, prior to the Confirmation Date, PHI has entered into the Bay
Harbour Agreement, then PHI shall deliver to Electing Holders of Class 5 Claims
in lieu of payment of up to $25 million Cash and, if applicable, to Bay Harbour
under the Bay Harbour Agreement, their respective Pro Rata shares of (i) up to
$25 million of New Senior Secured Notes having the principal economic terms set
forth in ANNEX A hereto, and (ii) a fee consisting of $625,000 Cash and 350,000
shares of New Class A Common Stock. The principal economic terms of the New
Secured PIK Notes are set forth on ANNEX B hereto. If the amount of any New
Class A Common Stock paid to a third-party lender as partial consideration for
the purchase of the New Senior Secured Notes is less than 350,000 shares of New
Class A Common Stock, then the Holders of Class 5 Claims shall receive, on the
Effective Date, their Pro Rata share of that undistributed New Class A Common
Stock up to a total of 350,000 shares (the "Supplemental Class 5 Distribution"),
and the amount of New Secured PIK Notes distributed to Class 5 shall be reduced
by the Class 6 Adjustment Amount.
5.6 CLASS 6. GENERAL UNSECURED CLAIMS.
Each Holder of an Allowed Class 6 Claim will receive in full
satisfaction of its Allowed Claim, Cash and New Secured PIK Notes having an
aggregate value as a percentage of its Allowed Claim equal to the aggregate
value of the consideration to be received by each Holder of an Allowed Class 5
Claim as a percentage of its Allowed Claim. The Cash component of the
distribution to Class 6 shall be the same percentage of a Class 6 Holder's
Allowed Claim as the Cash component of the distribution to Class 5 is as a
percentage of the Allowed Claims of Holders in Class 5, counting a distribution
of New Senior Secured Notes to Holders of Class 5 Claims, if any, as a Cash
payment. For the purpose of calculating the Class 6 distribution, New Secured
PIK Notes and New Senior Secured Notes, if any, distributed to Holders of Class
5 Claims, shall be valued at their face amounts and New Class A Common Stock
shall be valued at $4.2857 per share. In the event Class 5 receives the
Supplemental Class 5 Distribution, then the Holders of Class 6 Claims shall
receive, on the Effective Date, their Pro Rata share of the Class 6 Adjustment
Amount determined as provided in this Section 5.6.
5.7 CLASS 7. LANDLORD SETTLEMENT AGREEMENT CLAIM. Class 7 Claims are
unimpaired. Holders of Claims arising under Landlord Settlement Agreements,
whether executed prior to or subsequent to the Petition Date, shall receive the
treatment provided in the Landlord Settlement Agreement, whether payment of
Cash, performance by a Debtor, surrender of leasehold or other property rights,
or as otherwise required, in the manner and at the time provided in a Landlord
Settlement Agreement. All such Claims for payment, performance or otherwise
shall be deemed Allowed unless a Final Order of the Bankruptcy Court is entered
prior to the Effective Date disallowing, disapproving or unwinding a Landlord
Settlement Agreement.
5.8 CLASS 8. OLD COMMON STOCK. Class 8 Interests are impaired.
(a) If both Class 5 and Class 6 accept the Plan, each Holder of an
Allowed Class 8 Interest as of the Distribution Record Date shall receive on the
Effective Date, in full satisfaction of its Allowed Interest, its Pro Rata share
of New Warrants, PROVIDED, HOWEVER, that Holders of less than 5,450 shares of
Old Common Stock will receive no distribution.
(b) If either Class 5 or Class 6 rejects the Plan, Holders of Class 8
Interests shall not receive or retain any property on account of their Class 8
Interests, and no New Warrants shall be issued.
5.9 CLASS 9. CLAIMS FOR ISSUANCE OF OLD COMMON STOCK. Class 9 Claims
are impaired. The Holders of Class 9 Claims shall not receive or retain any
property under the Plan. All Old Employee Options and all other options or
rights to acquire the Old Common Stock shall be canceled, annulled and
extinguished on the Effective Date.
5.10 CLASS 10. INTERCOMPANY CLAIMS. Class 10 Claims are unimpaired.
Except as provided in Section 6.1.5 hereof, at Reorganized PHI's option, each
Holder of an Allowed Class 10 Claim shall be treated in accordance with Section
1124(2) of the Bankruptcy Code.
5.11 CLASS 11. INTERCOMPANY INTERESTS. Class 11 Interests are
unimpaired. Holders of Class 11 Interests shall be treated in accordance with
Section 1124(2) of the Bankruptcy Code.
5.12 POST-PETITION INTEREST. To the extent required by a Final Order
of the Bankruptcy Court or applicable law, the aggregate distribution paid to
Holders of Allowed Claims deemed to be unimpaired under the Plan shall include
interest accrued thereon from the Petition Date through the Effective Date at
the lower of (i) the Treasury Rate; (ii) the rate earned on the Debtors' cash
investments; or (iii) the rate determined by the Bankruptcy Court.
5.13 ALLOCATION BETWEEN PRINCIPAL AND ACCRUED INTEREST. The aggregate
consideration paid to Holders in respect of their Allowed Claims shall be
treated under this Plan as allocated first to the principal amount of such
Allowed Claim to the extent thereof and, thereafter, to the interest, if any,
accrued thereon through the Effective Date.
ARTICLE VI
MEANS FOR EXECUTION OF THE PLAN
6.1 IMPLEMENTATION OF PLAN. On the Effective Date, PHI shall (i)
receive $30 million in cash from the New Money Investors, the purchase price for
7.0 million shares of New Class B Common Stock; (ii) issue up to $25 million
face amount of the New Senior Secured Notes to one or more third-party lenders
and/or to Bay Harbour and the Electing Holders of Class 5 Claims, and (iii)
obtain such other financing on terms reasonably acceptable to the Debtors and
the Creditors' Committee as necessary to effectuate the Plan, including, on or
after the Effective Date, the proceeds from the Working Capital Facility to the
extent necessary to fund the Debtors' obligations under this Plan and to operate
the Reorganized Debtors. Reorganized PHI shall issue the New Senior Secured
Notes, the New Secured PIK Notes, the New Warrants, New Options and New Common
Stock, and shall deliver Cash to the entities entitled to receive distributions
under this Plan.
6.2 GENERAL CORPORATE MATTERS. Reorganized PHI and the other
Reorganized Debtors shall take such action as is necessary under the laws of the
State of Delaware, federal law and other applicable law to implement the terms
and provisions of the Plan.
6.2.1 CANCELLATION OF OLD SECURITIES, INSTRUMENTS AND AGREEMENTS
RELATING TO IMPAIRED CLAIMS AND INTERESTS. On the Effective Date, except as
otherwise provided in the Plan, all securities, instruments and agreements
governing any Claims and Interests impaired hereby shall be deemed canceled and
terminated, and the obligations of the Debtors relating to, arising under, in
respect of or in connection with such securities, instruments and agreements
shall be discharged; PROVIDED, HOWEVER, that except as otherwise provided
herein, notes, securities and other evidences of Claims and Interests shall,
effective upon the Effective Date, represent the right to participate, to the
extent such Claims and Interests are Allowed, in the distributions contemplated
by the Plan.
6.2.2 EFFECTIVENESS OF SECURITIES, INSTRUMENTS AND AGREEMENTS. On the
Effective Date, all securities, instruments and agreements entered into or
issued pursuant to the Plan, including, without limitation, the Plan Documents
and any security, instruments or agreements entered into in connection with any
of the foregoing, shall become effective and binding in accordance with their
respective terms and conditions upon the parties thereto and shall be deemed to
become effective simultaneously.
6.2.3 CORPORATE ACTION. As of the Effective Date, Reorganized PHI
shall be deemed to have adopted the Amended PHI Articles and the Amended PHI
By-Laws which shall thereupon become effective. Reorganized PHI shall file the
Amended PHI Articles which shall, among other things, contain appropriate
provisions consistent with the Plan and other Plan Documents (i) governing the
authorization of the New Common Stock, (ii) prohibiting the issuance of
nonvoting equity securities as required by Section 1123(a)(6) of the Bankruptcy
Code, and (iii) implementing such other matters as Reorganized PHI believes are
necessary and appropriate to effectuate the terms and conditions of the Plan,
including, without limitation, provisions implementing the Board member election
rights of the Holders of New Class A Common Stock and New Class B Common Stock.
Except as otherwise specifically provided in the Plan, the adoption of the
Amended PHI Articles and the Amended PHI By-Laws, the selection of directors and
officers of Reorganized PHI, the distribution of Cash, the issuance and
distribution of the New Senior Secured Notes, the New Secured PIK Notes, the New
Common Stock, the New Warrants, and the New Stock Options, and the adoption,
execution and delivery of all contracts, instruments, indentures, modifications
and other agreements related to any of the foregoing, and other matters provided
for under the Plan involving corporate action to be taken by or required of
Reorganized PHI shall be deemed to have occurred and be effective on the
Effective Date as provided herein, and shall be authorized and approved in all
respects without any requirements of further action by stockholders, officers or
directors of Reorganized PHI. To the extent required by law, the Board of
Directors of Reorganized PHI shall take such action as may be necessary from
time to time to approve the issuance of the Plan Securities and such other
action, if any, as may be required to meet the requirements of the Plan, the
Plan Securities or the Plan Documents.
6.2.4 MANAGEMENT AND BOARD OF DIRECTORS. On the Effective Date, the
Board of Directors of Reorganized PHI shall consist of five (5) members
appointed by the New Money Investors (the "Class B Directors") and two (2)
members appointed by the Creditors' Committee (the "Class A Directors"). After
the Effective Date, Holders of New Class B Common Stock shall have the right to
elect the five Class B Directors, and the Holders of New Class A Common Stock
shall have the right to elect the two Class A Directors until repayment in full
of the New Secured PIK Notes, at which time the number of Class A Directors
shall be reduced to one, and thereafter the Class A Director shall be elected by
the Holders of New Class A Common Stock in accordance with the terms of the
Amended PHI Articles and the Amended PHI By-Laws. Robert Earl shall be the Chief
Executive Officer of PHI on and after the Effective Date. Selection of a Chief
Financial Officer and a Chief Operating Officer for PHI prior to or as of the
Effective Date shall be subject to the consent, not to be unreasonably withheld,
of the Creditors' Committee, and after the Effective Date shall be subject to
the super-majority approval of a majority of the members (including at least one
Class A Director) of Reorganized PHI's Board of Directors. Officers and
directors for all of the Reorganized Debtors other than PHI shall be designated
by the Board of Directors of Reorganized PHI. Except as otherwise provided
herein or in any Plan Document, the members of the existing Board of Directors
of PHI shall have no continuing obligations to any of the Debtors or Reorganized
PHI on and after the Effective Date. At such time as there shall be no issued
and outstanding shares of Class B Common Stock, all members of the Board of
Directors of Reorganized PHI shall be elected by the holders of Class A Common
Stock.
6.2.5 NEW STOCK OPTIONS. On the Effective Date, PHI shall implement
the New Stock Option Plans for the benefit of Post-Effective Date management and
Celebrities who continue to sponsor PHI. The Stock Options issued under the New
Stock Option Plans shall be exercisable into shares of New Class A Common Stock.
A Committee appointed by PHI's Board of Directors shall determine the exercise
price and exercise term of the Stock Options.
6.2.6 SUBSTANTIVE CONSOLIDATION. The Plan contemplates the substantive
consolidation of the Chapter 11 Cases of the Debtors into a single Case solely
for purposes of confirmation, consummation and implementation of the Plan.
Pursuant to the Confirmation Order, on the Confirmation Date: (i) all assets,
and all proceeds thereof, and all liabilities of the Consolidated Debtors will
be merged or treated as though they were merged with and into the assets and
liabilities of Reorganized PHI; (ii) all Consolidated Claims and Claims among
the Consolidated Debtors will receive no distribution under the Plan; (iii) any
obligation of any Consolidated Debtor, and all guarantees thereof executed by
one or more of the Consolidated Debtors, and any Claims filed or to be filed in
connection with any such obligation and guarantee will be deemed one Claim
against Reorganized PHI; (iv) each and every Claim filed in the individual
Chapter 11 Case of any of the Consolidated Debtors will be deemed filed against
Reorganized PHI; and (v) for purposes of determining the availability of the
right of set-off under Section 553 of the Bankruptcy Code, the Consolidated
Debtors shall be treated for purposes of the Plan as one entity so that, subject
to the other provisions of Section 553 of the Bankruptcy Code, debts due to any
of the Consolidated Debtors may be setoff against the debts of any of the
Consolidated Debtors.
6.2.7 EXTINGUISHMENT OF GUARANTEE. Except as otherwise provided in the
Plan or in any Plan Documents, or in executory contracts or leases assumed by
the Debtors, on the Effective Date, all Claims based upon guarantees of
collection, payment or performance made by any of the Debtors as to the
obligations of each other, including, without limitation, the Leasehold
Guarantees, shall be discharged, released and of no further force and effect.
Guarantees by the Debtors, any non-Debtor affiliates, officers, directors, other
third parties or their affiliates of leases or contracts that are assumed by the
Debtors on or prior to the Effective Date shall remain in existence and shall
not be discharged or extinguished.
6.2.8 CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS IN
REORGANIZED PHI AND THE OTHER REORGANIZED DEBTORS. PHI shall continue to exist
on and after the Effective Date as Reorganized PHI, a corporation duly organized
under the laws of Delaware, with all the rights and powers of a corporation
under applicable law and without prejudice to any right to alter or terminate
such existence (whether by merger or otherwise) under Delaware law, subject to
the terms and provisions of this Plan and the Confirmation Order. The other
Reorganized Debtors shall continue to exist on and after the Effective Date as
entities duly organized under the laws of their respective states of
incorporation or organization, unless otherwise determined by PHI or Reorganized
PHI. Except as otherwise provided in the Plan, on or after the Effective Date,
all property of the Consolidated Estates, and any property and assets acquired
by the Debtor or the Reorganized Debtors under any provisions of the Plan, shall
vest in the Reorganized Debtors, free and clear of any and all Claims, Liens,
charges and other Encumbrances. On and after the Effective Date, the Reorganized
Debtors may operate their businesses and may use, acquire and dispose of
property or assets and compromise or settle any Claims against them without
supervision or approval by the Bankruptcy Court and free of any restrictions of
the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly
imposed by the Plan or the Confirmation Order. Without limiting the foregoing,
the Reorganized Debtors may pay the charges that they incur on or after the
Effective Date for Professional fees, disbursements, expenses or related support
services without application to the Bankruptcy Court, except as otherwise
provided in Section 14.3 of the Plan.
6.3 DISTRIBUTION.
6.3.1 GENERALLY. Except as otherwise provided in the Plan, any
distribution required by the Plan to be made on the Effective Date in respect of
a Claim or Interest that is Allowed as of the Effective Date will be deemed made
on the Effective Date if made on the Effective Date or as promptly thereafter as
practicable, but in any event no later than the later to occur of: (i) 45 days
after the Effective Date or (ii) the date on which such Claim or Interest
becomes Allowed and any other conditions to distribution with respect to such
Claim or Interest shall have been satisfied.
6.3.2 DISTRIBUTIONS TO THE HOLDER OF SUNTRUST CLAIMS. Any cash payment
required to be made on the Sun Trust Claims shall be delivered by PHI to Sun
Trust on the Effective Date conditioned on the delivery by Sun Trust of executed
releases of Liens, guarantees and cash collateral including any necessary
mortgage satisfactions, UCC Terminations Statements or other documents
reasonably requested by PHI.
6.3.3 DISTRIBUTIONS TO HOLDERS OF OLD SENIOR SUBORDINATED NOTES
CLAIMS. All distributions provided for in the Plan on account of Old Senior
Subordinated Notes Claims will be made to the Old Indenture Trustee for further
distribution to individual Holders of Old Senior Subordinated Notes Claims. Any
such distribution made by the Old Indenture Trustee will be made pursuant to the
Old Senior Subordinated Notes Indenture; provided, however, that any
distributions of New Senior Secured Notes to Holders of Class 5 Claims shall be
made only to Bay Harbour and the Electing Holders of Class 5 Claims.
Notwithstanding any provision in the Plan to the contrary, the Old Senior
Subordinated Notes Indenture will continue in effect to the extent necessary to
allow the Old Indenture Trustee to receive and make distributions pursuant to
the Plan on account of Old Senior Subordinated Notes Claims. Any actions taken
by the Old Indenture Trustee on or after the Effective Date that are not for
this purpose will be null and void as against the Debtors and Reorganized PHI,
and Reorganized PHI will have no obligations to the Old Indenture Trustee for
any fees, costs or expenses incurred in connection with any such actions.
6.3.4 DISTRIBUTIONS TO HOLDERS OF OTHER CLAIMS AND INTERESTS.
Reorganized PHI will make all distributions required under the Plan, except for
distributions made by the Old Indenture Trustee. Reorganized PHI may employ or
contract with other Entities including but not limited to the Old Stock Transfer
Agent to assist it in making the distributions required by the Plan.
6.3.5 COMPENSATION FOR SERVICES RELATED TO DISTRIBUTION. In
consideration for providing services related to distributions pursuant to the
Plan, the Old Indenture Trustee and any other Entity employed by Reorganized
PHI, as the case may be, will receive from Reorganized PHI without further
Bankruptcy Court approval, reasonable compensation for such services and
reimbursement of reasonable out-of-pocket expenses incurred in connection with
such services. These payments will be made on terms agreed to with Reorganized
PHI and will not be deducted from distributions to be made pursuant to the Plan
to Holders of Allowed Claims and Allowed Interests.
6.3.6 DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED
DISTRIBUTIONS.
(a) Distributions to Holders of Allowed Claims and Holders of Allowed
Interests will be made as follows: (a) with respect to Old Senior Subordinated
Notes Claims by the Old Indenture Trustee, in accordance with the applicable Old
Senior Subordinated Notes Indenture, (b) with respect to all other Allowed
Claims, by Reorganized PHI (i) at the addresses set forth on the respective
proofs of Claim Filed by Holders of such Claims; (ii) at the addresses set forth
in any written notices of address change delivered to Reorganized PHI after the
Bar Date; (iii) at the addresses reflected in the applicable Debtor's records if
no proof of Claim has been Filed and Reorganized PHI has not received a written
notice of a change of address, and (c) with respect to Allowed Class 8 Interests
by Reorganized PHI at the addresses for record holders supplied by the Old Stock
Transfer Agent or by PHI as of the Distribution Record Date.
(b) If any distribution to a Holder of a Class 5 Claim is returned to
the Old Indenture Trustee as undeliverable (an "Undeliverable Class 5
Distribution"), no further distributions will be made to that Holder until the
Old Indenture Trustee is notified in writing of such Holder's then current
address. If a Holder of Old Senior Subordinated Notes is not entitled to a
distribution under the Old Senior Subordinated Notes Indenture, the Plan, or any
order of the Bankruptcy Court, such distribution shall be treated as an
Undeliverable Class 5 Distribution. Any such Undeliverable Class 5 Distributions
will be held by the Old Indenture Trustee until they become deliverable, or one
year from the Effective Date, whichever is earlier. After one year from the
Effective Date, the Old Indenture Trustee may redistribute the Undeliverable
Class 5 Distributions to other claimants receiving Class 5 distributions, on a
pro rata basis. Any such distribution shall not alter the calculation of the
aggregate value distributable to Class 5 for purposes of calculating the
distribution to Class 6. If the Undeliverable Class 5 Distributions are so small
as to make it unduly burdensome to distribute them to other claimants, the Old
Indenture Trustee will return the Undeliverable Class 5 Distributions to
Reorganized PHI.
(c) If any distribution to any other Holders of Allowed Claims or
Allowed Interests is returned as undeliverable, no further distributions will be
made to such Holders until Reorganized PHI or its distribution agents are
notified in writing of such Holder's then current address.
(d) Undeliverable Cash (including dividends or other distributions on
account of undeliverable New Common Stock) will be held in segregated bank
accounts in the name of Reorganized PHI for the benefit of the potential
claimants of such funds. Undeliverable Cash will be invested by Reorganized PHI
in a manner consistent with Reorganized PHI's investment and deposit guidelines.
Subject to paragraph 6.3.6(b) above, undeliverable Plan Securities will be held
by Reorganized PHI for the benefit of the potential claimants of such
securities. Any Holder of an Allowed Claim or an Allowed Interest that does not
assert a claim pursuant to the Plan for an undeliverable distribution to be made
by Reorganized PHI or the Old Indenture Trustee, as the case may be, within one
year after the Effective Date will have its claim for such undeliverable
distribution discharged and will be forever barred from asserting any such claim
against the Debtors, Reorganized PHI, the other Reorganized Debtors or their
respective property. In such case, subject to paragraph 6.3.6(b) above, (i) any
Cash held for distribution on account of such claims for undeliverable
distributions (including Cash interest, maturities, dividends and other
distributions on undelivered Plan Securities, as the case may be) shall be
property of Reorganized PHI, free of any restrictions thereon (except as
otherwise provided in any Plan Document); (ii) any New Secured PIK Notes held
for distribution on account of such claims for distribution shall be canceled
and of no further force or effect; and (iii) any New Common Stock held for
distribution on account of such claims for distribution shall either be canceled
or held as treasury shares as Reorganized PHI may determine is appropriate.
(e) Pending the distribution of the New Common Stock, Reorganized PHI
will cause all of the New Common Stock held by it for distribution under the
Plan to be: (i) represented in person or by proxy at each meeting of the
stockholders of Reorganized PHI; and (ii) voted proportionately with the votes
cast with respect to New Class A Common Stock, by the other holders of New Class
A Common Stock taken as a whole, and with respect to New Class B Common Stock,
by the other holders of New Class B Common Stock taken as a whole.
6.3.7 DISTRIBUTION RECORD DATE.
As of the close of business on the Distribution Record Date, the
respective transfer registers for the Old Securities (as applicable) will be
closed, and Reorganized PHI, the Old Indenture Trustee, the Old Stock Transfer
Agent and their respective agents will have no obligation to recognize the
transfer of any Old Securities occurring after the close of business on the
Distribution Record Date and will be entitled for all purposes herein to
recognize and deal only with those Holders of record as of the close of business
on the Distribution Record Date.
6.3.8 MEANS OF CASH PAYMENTS. Except as otherwise specified herein,
Cash payments made pursuant to the Plan will be in U.S. dollars by checks drawn
on a domestic bank selected by Reorganized PHI, or by wire transfer from a
domestic bank, at the option of Reorganized PHI.
6.3.9 FRACTIONAL PLAN SECURITIES
(a) Notwithstanding any other provisions of the Plan, principal
amounts of the New Secured PIK Notes or the New Senior Secured Notes will be
issued only in denominations of $1,000 and integral multiples thereof. When any
distribution on account of an Allowed Claim would otherwise result in the
issuance of New Secured PIK Notes or the New Senior Secured Notes with an
aggregate principal amount that is not an integral multiple of $1,000, the
actual distribution of such notes will be rounded to the next higher or lower
integral multiple of $1,000, as follows: (a) aggregate principal amounts that
exceed an integral multiple of $1,000 by $500 or more will be rounded to the
next higher integral multiple of $1,000 and (b) aggregate principal amounts that
exceed an integral multiple of $1,000 by less than $500 will be rounded to the
next lower integral multiple of $1,000. If, as a result of such rounding, the
sum of such principal amounts differs from the aggregate principal amount of
such New Secured PIK Notes or the New Senior Secured Notes specified to be
distributed pursuant to the Plan, as applicable, the aggregate principal amount
of the New Secured PIK Notes or the New Senior Secured Notes so specified to be
distributed pursuant to the Plan will be adjusted upward or downward to provide
for the distribution of the applicable New Secured PIK Notes or the New Senior
Secured Notes in an aggregate principal amount equal to such sum. No
consideration will be provided in lieu of principal amounts that are rounded
down.
(b) Notwithstanding any other provision of the Plan, only whole
numbers of shares of New Common Stock, and whole numbers of New Warrants and New
Options will be issued. When any distribution on account of an Allowed Claim or
an Allowed Interest would otherwise result in the issuance of a number of shares
of New Common Stock or a number of New Warrants or New Options that is not a
whole number, the actual distribution of shares of such stock, warrants or
options will be rounded to the next higher or lower whole number as follows: (i)
fractions equal to or greater than 1/2 will be rounded to the next higher whole
number and (ii) fractions less than 1/2 will be rounded to the next lower
number. The total number of shares of New Common Stock, New Warrants or New
Options specified to be distributed to a Class of Claims or Interests will be
adjusted as necessary to account for the rounding provided for herein. If, as a
result of such rounding, the amount of shares of New Common Stock or the amount
of New Warrants to be distributed to a particular Class differs from the
aggregate number of shares of New Common Stock, New Warrants or New Options
specified to be distributed pursuant to the Plan to that Class, the aggregate
number of shares of New Common Stock or the amount of New Warrants or New
Options specified with respect to such Class will be adjusted upward or downward
to provide for the appropriate distribution of New Common Stock, New Warrants or
New Options, as the case may be. No consideration will be provided in lieu of
fractional shares, warrants or options that are rounded down. In addition,
notwithstanding the foregoing, no de minimis distribution shall be made as
provided in Section 14.17 of this Plan.
6.3.10 SURRENDER OF CANCELED INSTRUMENTS OR SECURITIES.
(a) As a condition precedent to receiving any distribution pursuant to
the Plan on account of an Allowed Claim or an Allowed Interest evidenced by the
notes, instruments, securities or other documentation canceled pursuant to the
Plan, the Holder of such Claim or Interest must tender the applicable notes,
instruments, securities or other documentation evidencing such Claim or Interest
to Reorganized PHI or its designated agent, or the Old Indenture Trustee, as
applicable. Any Cash or Plan Securities to be distributed pursuant to the Plan
on account of any such Claim or Interest will, pending such surrender, be
treated as an undeliverable distribution pursuant to Section 6.3.6 hereof.
(b) Except as provided in Section 6.3.10(c) hereof, each Holder of an
Allowed Claim or an Allowed Interest will tender its Old Security to Reorganized
PHI or its designated agent or the Old Indenture Trustee, as applicable,
together with a letter of transmittal to be provided to such Holder by
Reorganized PHI or its designated agent, or the Old Indenture Trustee as
promptly as practicable following the Effective Date. The letter of transmittal
will include, among other provisions, customary provisions with respect to the
authority of the Holder of the applicable Old Security to act and the
authenticity of any signatures required thereon. All surrendered Old Securities
will be marked as canceled by Reorganized PHI or its designated agent, or the
Old Indenture Trustee, as applicable, and delivered to Reorganized PHI.
(c) In addition to any requirements under the applicable Old
Indenture, any Holder of a Claim or Interest evidenced by an Old Security that
has been lost, stolen, mutilated or destroyed will, in lieu of surrendering such
Old Security, deliver to Reorganized PHI or its designated agent or the Old
Indenture Trustee, as applicable: (i) evidence satisfactory to such Entity of
such loss, theft, mutilation or destruction and (ii) such security or indemnity
as may be required by such Entity to hold such Entity harmless from any damages,
liabilities or costs incurred in treating such individual as a Holder of an Old
Security. Upon compliance with this Section 6.3.10(c) by a Holder of a Claim or
an Interest evidenced by an Old Security, such Holder will, for all purposes
under the Plan, be deemed to have surrendered an Old Security.
(d) Any Holder of an Old Security that fails to surrender or be deemed
to have surrendered such Old Security within one year after the Effective Date
will have its claim for a distribution pursuant to the Plan on account of such
Old Security discharged and will be forever barred from asserting any such claim
against the Debtors, Reorganized PHI, the other Reorganized Debtors or their
respective property.
6.3.11 SETOFF. Reorganized PHI may, but shall not be required to, set
off against any Allowed Claim and the distributions to be made pursuant to the
Plan on account of such Claim, claims of any nature that the Debtors or
Reorganized PHI may have against the Holder of such Allowed Claim; PROVIDED,
HOWEVER, that neither the failure to effect such a setoff nor the allowance of
any Claim against the Debtors or Reorganized PHI shall constitute a waiver or
release by the Debtors or Reorganized PHI of any claim that the Debtors or
Reorganized PHI may possess against such Holder.
6.4 INDENTURE TRUSTEE CHARGING LIENS. In full satisfaction of Allowed
Claims secured by Indenture Trustee Charging Liens, the Old Indenture Trustee
will receive from Reorganized PHI Cash equal to the amount of such Claims, and
any Indenture Trustee Charging Liens will be released. Distributions received by
Holders of Allowed Claims pursuant to the Plan will not be reduced on account of
payment of Allowed Claims secured by Indenture Trustee Charging Liens.
Notwithstanding any other provisions of the Plan, upon: (a) submission of
appropriate documentation to Reorganized PHI regarding fees and expenses
incurred by the Old Indenture Trustee in connection with the Chapter 11 Cases
through the Effective Date that are secured by an Old Indenture Trustee Charging
Lien and (b) the failure of Reorganized PHI to object on the grounds of
reasonableness, as determined under the terms of the applicable Old Senior
Subordinated Notes Indenture, to the payment of such fees and expenses within 20
Business days after receipt of such documentation, the Old Indenture Trustee
will be deemed to hold an Allowed Claim for such fees and expenses, which
Reorganized PHI will pay in Cash within 30 Business Days after the receipt of
the documentation regarding the fees and expenses of such Old Indenture Trustee,
without further Bankruptcy Court approval.
6.5 RETIREE BENEFITS. On and after the Effective Date, to the extent
required by Section 1129(a)(13) of the Bankruptcy Code, Reorganized PHI shall
continue to pay all retiree benefits (if any), as the term "retiree benefits" is
defined in Section 1114(a) of the Bankruptcy Code, maintained or established by
the Debtors prior to the Confirmation Date.
6.6 EXEMPTIONS FROM SECURITIES LAWS AND REGISTRATION RIGHTS.
(a) The Confirmation Order will provide that the offer and sale of
those Plan Securities that are issued in exchange for a Claim against, an
interest in, or an Administrative Claim against the Debtors, or principally in
such exchange and partly for cash or property, are exempt from registration
pursuant to Section 1145(a) of the Bankruptcy Code and that those Plan
Securities may be resold by the holders thereof without restriction, except to
the extent that any such holder is deemed to be an "underwriter," as defined in
Section 1145(b)(1) of the Bankruptcy Code with respect to those Plan
Securities.
(b) Plan Securities issued to the New Money Investors, or to a
purchaser of the New Senior Secured Notes, or to any other Entity that is not
exchanging Claims or Interests for such securities, shall be issued pursuant to
the exemption provided by Section 4(2) of the Securities Act.
(c) Reorganized PHI, the New Money Investors and certain other holders
of Plan Securities, if any, who may be deemed to be "underwriters" as defined in
Section 1145(b)(1) of the Bankruptcy Code or under the Securities Act with
respect to the Plan Securities shall enter into a Registration Rights Agreement,
substantially in the form filed as Exhibit "12" to this Plan at or prior to the
Confirmation Hearing. The Registration Rights Agreement requires Reorganized PHI
to use its reasonable best efforts to file within 90 days after the Effective
Date, or such longer time as may be required to prepare the necessary financial
statements, at its expense, a "shelf" registration statement (the "Shelf
Registration Statement"), and to have the Shelf Registration Statement declared
effective as soon as practicable after such filing and to keep the Shelf
Registration Statement continuously effective until the second anniversary date
of the effective date thereof. No securities other than the New Common Stock,
the New Senior Secured Notes, the New Secured PIK Notes and the New Warrants, in
each instance held by the New Money Investors or an Entity deemed to be an
"underwriter", shall be included in the Shelf Registration Statement.
Reorganized PHI shall also, if necessary, supplement or make amendments to the
Shelf Registration Statement to the extent necessary to keep the Shelf
Registration Statement effective as aforesaid.
ARTICLE VII
ACCEPTANCE OR REJECTION OF THE PLAN
7.1 CLASSES ENTITLED TO VOTE. Only Holders of an Allowed Claim in
Class 5 or Class 6 under the Plan shall be entitled to vote separately to accept
or reject the Plan. Each Holder of a Claim or Interest in a Class of Claims or
Interests which is unimpaired under the Plan, including Class 1, Class 2, Class
3, Class 4, Class 7, Class 10 and Class 11 shall be presumed to have accepted
the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Classes 8 and 9
shall be presumed to have rejected the Plan pursuant to Section 1126(g) of the
Bankruptcy Code.
7.2 CLASS ACCEPTANCE REQUIREMENT. An impaired Class of Claims shall
have accepted the Plan if (i) the Holders (other than any Holder designated
under Section 1126(e) of the Bankruptcy Code) of at least two-thirds in dollar
amount of the Allowed Claims actually voting in such Class have voted to accept
the Plan and (ii) the Holders (other than any Holder designated under Section
1126(e) of the Bankruptcy Code) of more than one-half in number of the Allowed
Claims actually voting in such Class have voted to accept the Plan.
7.3 CONFIRMATION NOTWITHSTANDING REJECTION OF PLAN BY AN IMPAIRED
CLASS. If any impaired Class or Classes of Claims or Interests shall not accept
the Plan, the Debtors request that the Bankruptcy Court confirm the Plan in
accordance with Section 1129(b) of the Bankruptcy Code. In addition, the Debtors
reserve the right to modify the Plan pursuant to the provisions of Section 14.13
of the Plan to provide treatment sufficient to assure that the Plan does not
discriminate unfairly, and is fair and equitable, with respect to the Class or
Classes not accepting the Plan and, in particular, the treatment necessary to
meet the minimum requirements of Sections 1129(a) and (b) of the Bankruptcy Code
with respect to the rejecting Classes and any other Classes affected by such
modifications; PROVIDED, HOWEVER, that the Debtors shall not modify the Plan to
(i) reduce the distributions to be made to any of Classes 1, 2, 3, 4, 5, 6, 7,
10 or 11; or (ii) increase the distributions to be made to any Class, without
first having obtained the consent of the Creditors' Committee.
ARTICLE VIII
PROCEDURE FOR RESOLVING DISPUTED CLAIMS
8.1 UNIMPAIRED CLAIMS GENERALLY. The amount of any Allowed Unimpaired
Claim including the rights, if any, of the Holder of any such Claim that has
properly Filed a proof of Claim on or prior to the Bar Date, or any other date
determined by the Bankruptcy Court with respect to such Claim, to payment in
respect thereof shall (a) be determined, (i) in the event that no objection to,
or request for estimation with respect to, such Claim is Filed in accordance
with Section 8.3 hereof, by any court of competent jurisdiction other than the
Bankruptcy Court in the manner in which the amount of such Claim and the rights
of the Holder of such Claim would have been resolved and adjudicated if these
Chapter 11 Cases had not been commenced or (ii) in the event that an objection
to, or request for estimation with respect to, such Claim is Filed in accordance
with Section 8.3 hereof, by the Bankruptcy Court, (b) except as otherwise
provided in Section 8.1(a)(ii) hereof, survive the Effective Date and
consummation of the Plan as if the Chapter 11 Cases had not been commenced, and
(c) not be discharged pursuant to Section 1141 of the Bankruptcy Code. In order
to carry out the foregoing provisions of the Plan, the Debtors, Reorganized PHI
and the Holders of Unimpaired Claims that have properly Filed a proof of Claim
on or prior to the Bar Date, shall have, among other rights and obligations, the
following rights and obligations:
8.1.1 DEBTOR ACTIONS; RESERVATION OF RIGHTS. Except to the extent that
an objection to, or a request for estimation with respect to an Unimpaired Claim
has been filed in accordance with Section 8.3 hereof, the Holder of such Claim
shall be entitled, after the Effective Date, to commence any action or
proceeding against Reorganized PHI, or to continue any action or proceeding
against any of the Debtors, to determine the amount of its Claim in any court of
competent jurisdiction.
8.1.2 CREDITOR ACTIONS. The Debtors or Reorganized PHI, as the case
may be, may at any time before or after the Confirmation Date and before or
after the Effective Date, dispute, defend against or otherwise oppose, in
accordance with bankruptcy or nonbankruptcy law, any such Unimpaired Claim
(other than any such Claim to the extent allowed by Final Order of the
Bankruptcy Court or the Confirmation Order) without taking any formal action
either in or out of court (except as otherwise required by bankruptcy or
nonbankruptcy law). Reorganized PHI shall retain, in addition to all claims,
rights and causes of action retained by Reorganized PHI pursuant to Section 14.5
of the Plan, all defenses, at law or in equity, to any and all Unimpaired Claims
(other than any such Claim to the extent allowed by Final Order of the
Bankruptcy Court or the Confirmation Order).
8.2 REJECTION CLAIMS. Any Rejection Claim not barred pursuant to the
provisions of Section 9.2 of the Plan shall be an Allowed Claim in the amount
set forth in the Filed proof of Claim evidencing such Claim unless an objection
is Filed to such Claim not later than sixty (60) days after the Effective Date
or such later time ordered by the Bankruptcy Court without need for notice and
hearing. Upon the Filing of any such objection, the amount of the Allowed
Rejection Claim, if any, shall be determined by the Bankruptcy Court unless it
shall have sooner become an Allowed Claim.
8.3 DISPUTED CLAIMS. The amount of any Claim which is a Disputed Claim
and the rights of the Holder of such Claim, if any, to payment in respect
thereof shall be determined by the Bankruptcy Court, unless it shall have sooner
become an Allowed Claim. Unless otherwise ordered by the Bankruptcy Court, all
objections to Claims (other than as provided in Section 4.1 hereof) and
Interests shall be Filed and served upon the Holder of such Claim or Interest no
later than sixty (60) days after the Effective Date; PROVIDED, HOWEVER, that,
unless otherwise ordered by the Bankruptcy Court, any of the Debtors, or
Reorganized PHI shall be entitled to File an objection to any Claim Filed after
the Bar Date, including, without limitation, any Claim Filed by a governmental
unit pursuant to Section 502(b)(9) of the Bankruptcy Code, on or prior to the
later of (i) sixty (60) days after the Effective Date and (ii) sixty (60) days
after the service of such Claim on any of the Debtors or Reorganized PHI.
8.4 AUTHORITY TO OPPOSE CLAIMS. On and after the Effective Date,
except as the Bankruptcy Court may otherwise order, Reorganized PHI shall have
the exclusive right to make, prosecute and settle any objections to Claims or
Interests.
8.5 TREATMENT OF DISPUTED CLAIMS AND DISPUTED INTERESTS.
Notwithstanding any other provisions of the Plan, no payments or distributions
shall be made on account of a Disputed Claim until such Claim or Interest
becomes an Allowed Claim or an Allowed Interest, as the case may be.
ARTICLE IX
EXECUTORY CONTRACTS
9.1 GENERAL TREATMENT. If the Effective Date occurs, all executory
contracts and unexpired leases of the Debtors designated for assumption under
the Plan, or at or prior to the Confirmation Hearing, shall be assumed by
Reorganized PHI or the applicable other Reorganized Debtor as of the
Confirmation Date. All other executory contracts or unexpired leases shall be
deemed rejected as of the Confirmation Date.
9.2 BAR TO REJECTION DAMAGES. If the rejection of an executory
contract or unexpired lease by the Debtors results in damages to the other party
or parties to such contract or lease, a Claim for such damages, if not
previously evidenced by a Filed proof of Claim or barred by a Final Order, shall
be forever barred and shall not be enforceable against the Debtors, Reorganized
PHI, the other Reorganized Debtors or their properties or agents, successors, or
assigns, unless a proof of Claim relating thereto is Filed with the Bankruptcy
Court within thirty (30) days after the later of (i) the entry of a Final Order
authorizing such rejection and (ii) the Effective Date, or within such shorter
period as may be ordered by the Bankruptcy Court.
9.3 CURE OF DEFAULTS FOR EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
Each executory contract and unexpired lease to be assumed pursuant to the Plan
shall be reinstated and rendered unimpaired in accordance with Sections 1124(2)
and 365(b)(1) of the Bankruptcy Code, or in accordance with the applicable
Landlord Settlement Agreement or any other agreement that is approved by the
Bankruptcy Court. In connection therewith, the Debtors shall cure or provide
adequate assurance that they will cure any monetary default (other than of the
kind specified in Section 365(b)(2) of the Bankruptcy Code), by payment of the
default amount in Cash on the Effective Date (or on such other terms as the
parties to such executory contract or unexpired lease may otherwise agree),
compensate, or provide adequate assurance that the Debtors will promptly
compensate parties other than the Debtors to such contract or lease for any
actual pecuniary loss to such parties resulting from such default, and provide
adequate assurance of future performance under such contract or lease. In the
event of a dispute regarding: (i) the amount of any cure payments, (ii) the
ability of Reorganized PHI, the other Reorganized Debtors or any of their
assignees to provide "adequate assurance of future performance" (within the
meaning of Section 365 of the Bankruptcy Code) under the contract or lease to be
assumed, or (iii) any other matter pertaining to assumption, the cure payments
or performance required by Section 365(b)(1) of the Bankruptcy Code shall be
made following the entry of a Final Order resolving the dispute and approving
the assumption.
ARTICLE X
CONDITIONS TO CONFIRMATION AND THE
OCCURRENCE OF THE EFFECTIVE DATE
10.1 CONDITIONS TO CONFIRMATION. Confirmation of this Plan is
conditioned upon the occurrence of the following, or waiver of the following,
conditions jointly by the Debtors and the Creditors' Committee:
(a) PHI shall have Filed with the Bankruptcy Court a fully-executed
agreement with the New Money Investors for the acquisition of New Class B Common
Stock on terms consistent with this Plan;
(b) PHI shall have Filed with the Bankruptcy Court a fully-executed
agreement for the acquisition by Bay Harbour Management L.C. or one or more
other parties of the New Senior Secured Notes for up to $25 million on terms
consistent with this Plan or evidence of other financing as necessary to
implement the Plan on terms acceptable to the Debtors and the Creditors'
Committee;
(c) The Plan shall have been accepted by not less than two-thirds in
amount and a majority in number of the Holders of the Claims in Class 5 (Old
Senior Subordinated Notes) entitled to vote and that do vote on the Plan;
(d) A Confirmation Order in form and substance acceptable to the
Debtors and the Creditors' Committee shall have been Filed with and signed by
the Bankruptcy Court; and
(e) No material alterations to the Plan as Filed shall be required by
the Bankruptcy Court, unless consented to by the Debtors.
10.2 CONDITIONS TO THE OCCURRENCE OF THE EFFECTIVE DATE. This Plan
shall not be consummated and the Effective Date shall not occur unless and until
each of the following conditions have been satisfied or, if waivable, waived
jointly by the Debtors and the Creditors' Committee:
(a) All fees payable pursuant to Section 1930 of Title 28 of the
United States Code, as determined by the Bankruptcy Court at the Confirmation
Hearing, shall have been paid;
(b) The provisions of the Plan and all exhibits thereto shall be
reasonably satisfactory to the Debtors and the Creditors' Committee;
(c) The Confirmation Order shall have become a Final Order;
(d) The Effective Date shall have occurred no later than February 29,
2000; and
(e) All actions and documents necessary to implement the provisions of
this Plan shall have been effected, executed or duly provided for in a manner
reasonably satisfactory to the Debtors and the Creditors' Committee.
ARTICLE XI
EFFECTS OF CONFIRMATION AND EFFECTIVENESS OF PLAN
11.1 DISCHARGE OF CLAIMS. Except as otherwise provided herein or in
the Confirmation Order, on the Effective Date: (i) the rights afforded in the
Plan and the payments and distributions to be made hereunder shall discharge all
existing debts and Claims of any kind, nature, or description whatsoever against
the Debtors, any of their assets or properties or any property dealt with under
the Plan to the extent permitted by Section 1141 of the Bankruptcy Code; (ii)
all existing Claims against the Debtors shall be and shall be deemed to be
discharged; (iii) all obligations of the Debtors, directly or as guarantors,
under the SunTrust Agreements and the Old Senior Subordinated Notes Indenture,
shall be deemed released, discharged and satisfied; and (iv) all Holders of
Claims and Interests shall be precluded from asserting against the Debtors, any
of their assets or properties, or any property dealt with under the Plan, any
other or further Claim based upon any act or omission, transaction, or other
activity of any kind or nature that occurred prior to the Confirmation Date,
whether or not such Holder Filed a proof of Claim.
11.2 DISCHARGE OF DEBTORS. Except as otherwise provided herein, any
consideration distributed to Creditors under the Plan shall be in exchange for
and in complete satisfaction, discharge, and release of all Claims of any nature
whatsoever against the Debtors or any of their assets or properties; and, except
as otherwise provided herein, upon the Effective Date, the Debtors shall be
deemed discharged and released to the extent permitted by Section 1141 of the
Bankruptcy Code from any and all Claims, including but not limited to demands
and liabilities that arose before the Confirmation Date, and all debts of the
kinds specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code,
whether or not (i) a proof of Claim based upon such debt is Filed or deemed
Filed under Section 501 of the Bankruptcy Code; or (ii) the Holder of a Claim
based upon such debt has accepted the Plan. Except as provided herein and
therein, the Confirmation Order shall be a judicial determination of discharge
of all liabilities of the Debtors. As provided in Section 524 of the Bankruptcy
Code, such discharge shall void any judgment against the Debtors at any time
obtained to the extent it relates to a Claim discharged, and operates as an
injunction against the commencement or continued prosecution of any action
against the Debtors, Reorganized PHI, the other Reorganized Debtors, or any of
their respective properties, to the extent it relates to a Claim discharged.
11.3 SURVIVAL OF INDEMNIFICATION CLAIMS AND OBLIGATIONS.
Notwithstanding any other provision of this Plan, all existing provisions of the
By-Laws, the Old Senior Subordinated Notes Indenture or other applicable laws,
corporate documents or agreements of the Debtors or any Foreign Subsidiary or
Domestic Subsidiary providing for the indemnification of current or former
officers or directors of any of the Debtors, or the Old Indenture Trustee, and
all Claims of such officers, directors or the Old Indenture Trustee, under the
by-laws of such Debtor, the Old Senior Subordinated Notes Indenture or other
applicable law, corporate documents or agreements shall expressly survive
Confirmation of the Plan and be binding on and enforceable against Reorganized
PHI irrespective of whether indemnification is owed in connection with an event
occurring before, on or after the Petition Date.
11.4 TERMINATION OF CLAIMS OF CONTRACTUAL SUBORDINATION AGAINST
HOLDERS OF OLD SENIOR SUBORDINATED NOTES CLAIMS. Provided that (i) the
Bankruptcy Court shall have entered the Confirmation Order and (ii) the
Effective Date shall have occurred, all rights, actions or causes of action
between or among Holders of "senior indebtedness" (as defined in the Old Senior
Subordinated Notes Indenture) and Holders of Old Senior Subordinated Notes
Claims based upon any claimed right to contractual subordination shall be
satisfied, terminated, void and of no further force or effect as of the
Effective Date so that, notwithstanding any such rights, actions or causes of
action, each Holder of Old Senior Subordinated Notes Claims shall have the
rights and benefits of the distributions provided in this Plan.
ARTICLE XII
RELEASES AND INJUNCTIONS
12.1 RELEASES. On the Effective Date, Reorganized PHI and the other
Reorganized Debtors shall be deemed to release unconditionally, and hereby are
deemed to release unconditionally on such date (i) each present or former
officer, director, shareholder, employee, consultant, attorney, accountant and
other representatives of the Debtors, the Domestic Subsidiaries and the Foreign
Subsidiaries, PROVIDED, HOWEVER, that in no event shall the Reorganized Debtors
be deemed to have released any Releasee that asserts a Disputed Claim against
the Debtors or the Reorganized Debtors from any claim, counter claim, defense or
offset that may be asserted in connection with such claim; (ii) the Creditors'
Committee and, solely in their capacity as members or representatives of the
Creditors' Committee each consultant, attorney, accountant or other
representative or member (and each of such member's respective officers,
directors, shareholders, employees, consultants, attorneys, accountants and
other representatives) of the Creditors' Committee, and (iii) the Holders of Old
Senior Subordinated Notes Claims that are or were at any time members of the
Unofficial Noteholders' Committee and, solely in their capacity as
representatives of such Holders, each of such Holder's respective officers,
directors, shareholders, employees, consultants, attorneys, accountants and
other representatives as well as attorneys and financial advisors to the
Unofficial Noteholders' Committee, and their officers, directors, shareholders
and employees (the Entities specified in clauses (i), (ii) and (iii) are
referred to collectively as the "Releasees"), from any and all claims,
obligations, suits, judgments, damages, rights, causes of action and liabilities
whatsoever, whether known or unknown, foreseen or unforeseen, existing or
hereafter arising, in law, equity or otherwise, based in whole or in part upon
any act or omission, transaction, event or other occurrence taking place on or
prior to the Effective Date in any way relating to the Chapter 11 Cases or the
Plan, except that no Releasees shall be released from acts or omissions which
are the result of gross negligence or willful misconduct.
On the Effective Date, each Holder of a Claim or Interest shall be
deemed to have released unconditionally, and hereby is deemed to release
unconditionally on such date, the Releasees, from any and all rights, claims,
causes of action, obligations, suits, judgments, damages and liabilities
whatsoever which any such Holder may be entitled to assert, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity
or otherwise, based in whole or in part upon any act or omission, transaction,
event or other occurrence taking place on or before the Effective Date in any
way relating to Reorganized PHI, the other Reorganized Debtors, the Chapter 11
Cases or the Plan, except that no Releasees shall be released from acts or
omissions which are the result of gross negligence or willful misconduct.
If and to the extent that the Bankruptcy Court concludes that the Plan
cannot be confirmed with any portion of the foregoing releases, then the Debtors
reserve the right to amend the Plan so as to give effect as much as possible to
the foregoing releases, or to delete them.
12.2 NO LIABILITY FOR SOLICITATION OR PARTICIPATION. As specified in
Section 1125(e) of the Bankruptcy Code, Entities that solicit acceptances or
rejections of the Plan and/or that participate in the offer, issuance, sale or
purchase of securities offered or sold under the Plan, in good faith and in
compliance with the applicable provisions of the Bankruptcy Code, are not
liable, on account of such solicitation or participation, for violation of any
applicable law, rule or regulation governing the solicitation of acceptances or
rejections of the Plan or the offer, issuance, sale or purchase of securities in
connection therewith.
12.3 LIMITATION OF LIABILITY. Neither the Debtors, Reorganized PHI, the
other Reorganized Debtors, nor any of their respective employees, officers,
directors, agents, or representatives, nor any Professionals employed by any of
them, nor the Creditors' Committee or any of its members, agents,
representatives, or professional advisors, shall have or incur any liability to
any Entity for any act taken or omission made in good faith in connection with
or related to formulating, implementing, confirming or consummating the Plan, or
any contract, instrument, release, or other agreement or document created in
connection with the Plan.
12.4 GENERAL INJUNCTION. Except as provided herein or in the
Confirmation Order, from and after the Effective Date, all Entities who received
or are Holders of Plan Securities and all Holders of Claims against or Interests
in the Estates are permanently restrained and enjoined after the Confirmation
Date (i) from commencing, continuing, or taking any act, to enforce against any
of the Debtors or any Foreign Subsidiary or Domestic Subsidiary or any officer,
director or employee of any of the Debtors any right, claim or cause of action
arising under or related to any Old Security or any claim from enforcing,
attaching, collecting or recovering by any manner or means, any judgment, award,
decree or order against any Debtor or any Foreign Subsidiary or Domestic
Subsidiary or any right, claim or cause of action arising under or related to
any Old Security or any claim, (ii) from creating, perfecting or enforcing any
encumbrance of any kind against any Debtor or any Foreign Subsidiary or Domestic
Subsidiary or any right, claim or cause of action arising under or related to
any Old Security or any claim, (iii) from asserting any setoff, right of
subrogation, indemnification, contribution or recoupment of any kind against any
obligation due any Debtor or any Foreign Subsidiary or Domestic Subsidiary, or
any right, claim or cause of action arising under or related to any Old Security
or any claim, and (iv) from performing any act, in any manner, in any place
whatsoever, that does not conform to or comply with the provisions of the Plan
and orders of the Bankruptcy Court; PROVIDED, HOWEVER, that each Holder of a
Claim or Interest may, to the extent permitted by and in accordance with the
provisions of the Plan, commence or continue any action or proceeding to
determine the amount of its Claim or Interest in the Bankruptcy Court or any
other court of competent jurisdiction, and all Holders of Claims or Interests
shall be entitled to enforce their rights under the Plan and the Plan Documents,
provided further, however, that nothing in the Plan shall restrain and enjoin
all Entities who received or are Holders of Plan Securities and all Holders of
Claims against and Interests in the Estates from taking any action to enforce
liability arising from acts or omissions which are the result of gross
negligence or willful misconduct.
12.5 SECTION 346 INJUNCTION. In accordance with Section 346 of the
Bankruptcy Code, for purposes of any state or local law imposing a tax, income
will not be realized by the Estates, the Debtors or Reorganized PHI by reason of
the forgiveness or discharge of indebtedness resulting from the Chapter 11
Cases. As a result each state or local taxing authority is permanently enjoined
and restrained, after the Confirmation Date, from commencing, continuing or
taking any act to impose, collect or recover in any manner any tax against any
Debtor, Reorganized PHI or the other Reorganized Debtor, arising by reason of
the forgiveness or discharge of indebtedness of any such Entity under the Plan.
ARTICLE XIII
RETENTION OF JURISDICTION
13.1 SCOPE OF JURISDICTION. Pursuant to Sections 1334 and 157 of Title
28 of the United States Code, notwithstanding occurrence of the Effective Date
or substantial consummation of the Plan, the Bankruptcy Court shall retain and
have jurisdiction from and after the Confirmation Date of all matters arising
in, arising under, and related to the Chapter 11 Cases and the Plan pursuant to,
and for the purposes of, Sections 105(a) and 1142 of the Bankruptcy Code and
for, among other things, the following purposes:
13.1.1 To hear and determine any and all adversary proceedings,
applications or contested matters pending on the Effective Date or brought after
the Effective Date including, but not limited to, Avoidance Actions, if any;
13.1.2 To hear and determine any and all applications for
substantial contribution and for compensation and reimbursement of expenses
Filed in accordance with the Plan;
13.1.3 To hear and determine Rejection Claims, disputes arising
from the assumption and assignment of executory contracts and unexpired leases,
and Disputed Claims which are Impaired Claims or which are held by Holders of
Unimpaired Claims;
13.1.4 To hear and determine, pursuant to the provisions of
Section 505 of the Bankruptcy Code, all issues related to the liability of a
Debtor for any tax incurred prior to the Effective Date;
13.1.5 To enforce the provisions of the Plan and to determine any
and all disputes under the Plan;
13.1.6 To enter and implement such orders as may be appropriate
in the event Confirmation is for any reason stayed, reversed, revoked, modified
or vacated;
13.1.7 To modify any provision of the Plan to the extent
permitted by the Bankruptcy Code and to correct any defect, cure any omission or
reconcile any inconsistency in the Plan or the Confirmation Order as may be
necessary to carry out the purposes and intent of the Plan;
13.1.8 To enter such orders as may be necessary or appropriate in
furtherance of consummation and implementation of the Plan;
13.1.9 To determine the allowance of Claims and Interests as
provided in the Plan; and
13.1.10 To enter an order closing the Chapter 11 Cases.
13.2 FAILURE OF THE BANKRUPTCY COURT TO EXERCISE JURISDICTION. If the
Bankruptcy Court abstains from exercising, or declines to exercise, jurisdiction
or is otherwise without jurisdiction over any matter arising in, arising under,
or related to the Chapter 11 Cases, this Article XIII shall have no effect upon
and shall not control, prohibit, or limit the exercise of jurisdiction by any
other court having jurisdiction with respect to such matter.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 COMPLIANCE WITH TAX REQUIREMENTS. In connection with the Plan,
the Debtors, Reorganized PHI, the other Reorganized Debtor, the Collateral
Agent, and the Old Indenture Trustee shall comply with all applicable
withholding and reporting requirements imposed by federal, state, local and
foreign taxing authorities, and all distributions hereunder shall be subject to
such withholding and reporting requirements. Creditors may be required to
provide certain tax information as a condition to receipt of distributions
pursuant to the Plan. Notwithstanding any other provision of the Plan, each
Entity receiving a distribution pursuant to the Plan will have sole and
exclusive responsibility for the satisfaction and payment of any tax obligations
imposed by any governmental unit, including income, withholding and other tax
obligations, on account of such distribution.
14.2 DISCHARGE OF OLD INDENTURE TRUSTEE. Subsequent to the performance
of the Old Indenture Trustee, or its agents, of their duties and obligations
under the provisions of the Plan and the Confirmation Order, if any, and under
the terms of the Old Senior Subordinated Notes Indenture, such Old Indenture
Trustee and its agents shall be relieved, discharged and released from all
obligations, claims, rights, demands and causes of action associated with or
arising from such Old Senior Subordinated Notes Indenture. The Confirmation
Order shall enjoin from and after the Effective Date the prosecution, whether
directly, derivatively or otherwise, of any claim, debt, right, cause of action
or liability released or to be released pursuant to this Section 14.2.
14.3 POST-EFFECTIVE DATE FEES AND EXPENSES OF PROFESSIONALS.
Reorganized PHI shall, in the ordinary course of business and without the
necessity for any approval by the Bankruptcy Court (except as may be required by
Section 1129(a)(4) of the Bankruptcy Code), pay the reasonable fees and
reasonable expenses of the Professionals related to implementation and
consummation of the Plan that are incurred after the Effective Date; PROVIDED,
HOWEVER, that no such fees and expenses shall be paid except upon receipt by
Reorganized PHI of a detailed written invoice from the Professional seeking
compensation and expense reimbursement and PROVIDED, FURTHER, HOWEVER, that
Reorganized PHI may, within ten (10) business days after receipt of an invoice
for fees and expenses, object to some or all of any such invoice, and if the
dispute cannot be resolved with the Professional seeking compensation, then
either party may request that the Bankruptcy Court determine the reasonableness
of such fees and expenses.
14.4 VESTING OF PROPERTY OF THE DEBTORS. Except as otherwise provided
in the Plan (including any Plan Document) or any other indentures, instruments
or agreements to be executed and delivered pursuant to the Plan or the
Confirmation Order, upon the Effective Date, all property of the Consolidated
Estates, wherever situated, shall vest in Reorganized PHI or the other
Reorganized Debtors, as applicable, and shall be retained by Reorganized PHI or
the other Reorganized Debtors, as applicable, or distributed to Creditors or
Interest Holders as provided in the Plan. On the Effective Date, all property of
the Consolidated Estates, whether retained by Reorganized PHI or the other
Reorganized Debtors, as applicable, or distributed to Creditors or Interest
Holders, shall be free and clear of all Claims, Liens, Encumbrances and
Interests, except the Claims, Liens, Encumbrances and Interests of Creditors and
Holders of Interests expressly provided for in the Plan (including in any Plan
Document).
14.5 CAUSES OF ACTION. Except as otherwise provided in the Plan, or in
any contract, instrument, release, or other agreement entered into in connection
with the Plan, in accordance with Section 1123(b) of the Bankruptcy Code,
Reorganized PHI shall retain and may enforce any claims, rights and causes of
action that any of the Consolidated Debtors or the Consolidated Estates may hold
against any entity including, without limitation, any Avoidance Actions or any
claims, rights or causes of action arising under any similar provisions of state
law, or any other statute or legal theory. Reorganized PHI or any successor may
pursue those rights of action, as appropriate, in accordance with what is in the
best interests of Reorganized PHI or any successor holding such rights of
action.
14.6 ASSUMPTION OF LIABILITIES. The liability for and obligation to
make the distributions required under the Plan shall be assumed by Reorganized
PHI, which shall have the liability for, and obligation to make, all
distributions of Cash, Plan Securities or other instruments to be issued by the
Debtors or Reorganized PHI.
14.7 OTHER DOCUMENTS AND ACTIONS. Without a further order of the
Bankruptcy Court, the Debtors and Reorganized PHI may execute such documents and
take such other action as is necessary to effectuate the transactions provided
for in the Plan. Each of the President, any Vice President, the Chief Financial
Officer, the Secretary, the Treasurer or other duly authorized representative of
each of the Debtors and of Reorganized PHI, is authorized to execute, deliver,
file, or record such contracts, instruments, releases, indentures and other
agreements or documents and take such actions as may be necessary or appropriate
to effectuate and further evidence the terms and conditions of the Plan and any
notes or securities issued pursuant to the Plan.
14.8 SECTION 1146 EXEMPTION. Pursuant to Section 1146(c) of the
Bankruptcy Code, (i) the issuance, transfer or exchange of any security under
the Plan or the making or delivery of any instrument of transfer pursuant to, in
implementation of, or as contemplated by the Plan, including any merger
agreements or agreements of consolidation, deeds, bills of sale or assignments
executed in connection with any of the transactions contemplated under the Plan
or the revesting, transfer or sale of any real or personal property of the
Debtors pursuant to, in implementation of, or as contemplated by the Plan, (ii)
the making, delivery, creation, assignment, amendment or recording of any note
or other obligation for the payment of money or any mortgage, deed of trust or
other security interest under, in furtherance of, or in connection with the
Plan, the issuance, renewal, modification or securing of indebtedness by such
means, and (iii) the making, delivery or recording of any deed or other
instrument of transfer under, in furtherance of, or in connection with, the
Plan, including, without limitation, the Confirmation Order, shall not be
subject to any document recording tax, stamp tax, conveyance fee or other
similar tax, mortgage tax, real estate transfer tax, mortgage recording tax or
other similar tax or governmental assessment. Consistent with the foregoing,
each recorder of deeds or similar official for any county, city or governmental
unit in which any instrument hereunder is to be recorded shall, pursuant to the
Confirmation Order, be ordered and directed to accept such instrument, without
requiring the payment of any documentary stamp tax, deed stamps, stamp tax,
transfer tax, intangible tax or similar tax.
14.9 BINDING EFFECT.
(a) From and after the Confirmation Date, the Plan shall be
binding upon and inure to the benefit of the Reorganized Debtors, Holders of
Claims, Holders of Interests, and their respective successors and assigns.
(b) If the Plan is not confirmed, the Plan shall be deemed
null and void and notwithstanding anything herein or in the Disclosure Statement
to the contrary nothing contained herein or in the Disclosure Statement shall be
deemed (i) to constitute a waiver or release of any Claims by the Debtors or any
other Entity, (ii) to prejudice in any manner the rights of the Debtors or any
other Entity, (iii) to constitute any admission by any of the Debtors, or any
other Entity, or (iv) to constitute any admission or concession regarding any
Claim or Interest.
14.10 GOVERNING LAW. Unless an applicable rule of law or procedure is
supplied by federal law (including the Bankruptcy Code and the Bankruptcy Rules)
or the Delaware Corporation Law, the internal laws of the State of Delaware
(without reference to conflict of laws principles) shall govern the construction
and implementation of the Plan and any agreements, documents, and instruments
executed in connection with the Plan or the Chapter 11 Cases, except as may
otherwise be provided in such agreements, documents, and instruments.
14.11 FILING OF ADDITIONAL DOCUMENTS. On or before the conclusion of
the Confirmation Hearing, the Debtors shall File such agreements and other
documents as may be necessary or appropriate to effectuate and further evidence
the terms and conditions of the Plan.
14.12 DISSOLUTION OF CREDITORS' COMMITTEE. On the Effective Date, the
Creditors' Committee shall dissolve and the members of the Creditors' Committee
shall be released and discharged from all further rights and duties arising from
or related to the Chapter 11 Cases. The Professionals retained by the Creditors'
Committee and the members thereof shall not be entitled to compensation or
reimbursement of expenses for any services rendered after the Effective Date,
except as specifically provided in the Plan, and for services rendered and
expenses incurred in connection with any applications for allowance of
compensation and reimbursement of expenses pending on the Effective Date or
Filed after the Effective Date pursuant to the Plan.
14.13 AMENDMENTS AND MODIFICATIONS.
(a) The Debtors may, with the consent of the Creditors'
Committee and in accordance with Section 1127(a) of the Bankruptcy Code and
Bankruptcy Rule 3019, after hearing on notice to such Entities as are entitled
to such notice pursuant to Bankruptcy Rule 3019, amend or modify the Plan prior
to the entry of the Confirmation Order. No amendment or modification of Section
12.1 of the Plan shall require any resolicitation of acceptances.
(b) After the entry of the Confirmation Order, PHI may, with
the consent of the Creditors' Committee and in accordance with Section 1127(b)
of the Bankruptcy Code, amend or modify this Plan, or remedy any defect or
omission or reconcile any inconsistency in the Plan in such manner as may be
necessary to carry out the purpose and intent of the Plan, and after the
Effective Date the parties to any Plan Document may amend or modify any such
Plan Document pursuant to the terms thereof without notice to any Entity not
entitled to receive notice under such Plan Document and without an order from
the Bankruptcy Court.
14.14 REVOCATION. The Debtors reserve the right to revoke and withdraw
the Plan prior to Confirmation. If the Debtors revoke or withdraw the Plan
pursuant to this Section 14.14, then the Plan shall be deemed null and void and,
in such event, the provisions of Section 14.9(b) shall apply.
14.15 SEVERABILITY. Should any provision in the Plan be determined to
be unenforceable, with the consent of the Debtors or Reorganized PHI, as
applicable, such provisions shall be deemed to be severed, and such
determination shall in no way limit or affect the enforceability and operative
effect of any other provisions of the Plan.
14.16 NOTICES. Any pleading, notice or other document required by the
Plan or the Confirmation Order to be served or delivered to the Debtors,
Reorganized PHI or the Creditors' Committee will be sent by overnight delivery
service, courier service or facsimile transmission to:
(a) Planet Hollywood International, Inc.
8669 Commodity Circle
Orlando, FL 32819
Attn: General Counsel
with copies to:
Lewis Kruger
Robin Keller
Stroock & Stroock & Lavan LLP
180 Maiden Lane New
York, NY 10038 (212) 806-5400 (phone) (212) 806-6006
(fax)
(COUNSEL TO THE DEBTORS)
(b) Myron Trepper
Steven Wilamowsky
Willkie Farr & Gallagher
153 East 53rd Street
New York, NY 10022
(212) 728-8000
(212) 728-8111
(COUNSEL TO THE OFFICIAL UNSECURED CREDITORS' COMMITTEE)
14.17 DE MINIMIS DISTRIBUTIONS. Notwithstanding any provision to the
contrary contained herein, no distribution of less than twenty-five dollars
($25) in Cash or less than 100 shares of New Common Stock or 10 New Warrants or
New Options shall be made to any Holder of an Allowed Claim or an Allowed
Interest. Such undistributed amount will be retained by Reorganized PHI, and in
the case of undistributed New Common Stock, held as treasury shares.
14.18 PLAN AND PLAN DOCUMENTS CONTROL. In the event and to the extent
that any provision of the Disclosure Statement is inconsistent with any
provision of the Plan or any Plan Document, the applicable provision of the Plan
or the applicable Plan Document shall control and take precedence. In the event
and to the extent that any provision of the Plan is inconsistent with any
provision of any Plan Document, the applicable provision of the applicable Plan
Document shall control and take precedence.
<PAGE>
CONFIRMATION REQUEST
Debtors hereby request Confirmation of the Plan pursuant to Section
1129(a) or, in the event the Plan is not accepted by each of those Classes of
Claims and Interests entitled to vote, Section 1129(b) of the Bankruptcy Code.
Dated: December 13, 1999
Orlando, Florida
Respectfully submitted,
PLANET HOLLYWOOD INTERNATIONAL, COOL PLANET, INC.
INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
------------------------------ -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
COOL PLANET II, INC. PLANET HOLLYWOOD (ASPEN), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
------------------------------ -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (ATLANTIC PLANET HOLLYWOOD (CHICAGO), INC.
CITY), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (HONOLULU), PLANET HOLLYWOOD (LP), INC.
INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (NEW YORK PLANET HOLLYWOOD (NEW YORK),
CITY), INC. LTD.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
-------------------------------- -----------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (ORLANDO), INC. PLANET HOLLYWOOD (PHOENIX), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
-------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (REGION I), INC. PLANET HOLLYWOOD (REGION II), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
-------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (REGION III), INC. PLANET HOLLYWOOD (REGION IV), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
-------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (REGION V), INC. PLANET HOLLYWOOD (REGION VI), INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
-------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (REGION VII), PLANET HOLLYWOOD (TEXAS), LTD.
INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
------------------------------ -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
PLANET HOLLYWOOD (WAREHOUSE), SOUND REPUBLIC, INC.
INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
--------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
SOUND REPUBLIC I, INC. ALL STAR CAFE INTERNATIONAL, INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
-------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
ALL STAR CAFE (NEW YORK), INC. EBCO MANAGEMENT, INC.
By: \S\ THOMAS AVALLONE By: \S\ THOMAS AVALLONE
--------------------------------- -------------------
Name: Thomas Avallone Name: Thomas Avallone
Title: Executive Vice President Title: Executive Vice President
Chief Financial Officer Chief Financial Officer
<PAGE>
ANNEX A
SUMMARY TERMS OF NEW SENIOR SECURED NOTES
Issuer: Reorganized Planet Hollywood International, Inc.
("PHI")
Guarantors: All Operating Subsidiaries of PHI (together with
PHI, the "Company")
Principal Amount: Up to $25 million
Maturity: First or Second Anniversary of the Effective Date
[subject to the approval of the Senior Secured
Notes purchaser].
Interest: Payable quarterly or semi-annually in arrears in
cash at a rate of 8% per annum, plus an applicable
default interest rate as may be negotiated.
Security: The New Senior Secured Notes shall be secured by
liens on substantially all of the Reorganized
Company's assets except that their liens on
inventory, receivables, Memorabilia and other
collateral reasonably determined by PHI to be
necessary in accordance with prudent business
practices to secure the Working Capital Facility,
shall be junior to the liens of the Working
Capital Facility. The Company will negotiate in
good faith with the Committee regarding terms for
the release by the Working Capital Facility lender
of Memorabilia and other collateral securing the
Working Capital Facility based on liquidity levels
of the Company to be determined, provided that
after giving effect to such releases, the Company
maintains adequate liquidity and working capital.
Covenants: Normal and customary for secured indebtedness of
this nature to be determined to the reasonable
satisfaction of the Creditors' Committee.
Asset Sales: Any net proceeds from the sale of any collateral
must be used to repay the Senior Secured Notes,
subject to the terms of the Working Capital
Facility.
Commitment Fee: To Be Determined
Equity: To Be Determined
<PAGE>
ANNEX B
SUMMARY TERMS OF NEW SECURED PIK NOTES
Issuer: Reorganized Planet Hollywood International, Inc.
("PHI")
Guarantors: All Operating Subsidiaries of PHI (together with
PHI, the "Company")
Principal Amount: $65.7 million (estimated)
Maturity: Fifth Anniversary of the Effective Date
Interest: Payable semi-annually in cash, at 10% per annum,
or at the sole election of the issuer, payable in
kind in additional New Secured PIK Notes at 12.75%
per annum; PROVIDED, HOWEVER, that commencing two
and one-half years after the Effective Date,
interest on the New Secured PIK Notes shall be
payable only in cash at 10% per annum; AND FURTHER
PROVIDED, HOWEVER, that after one year from the
date of issuance, interest on the New Secured PIK
Notes shall be paid in cash at 10% per annum if
the ratio of the Reorganized Company's
consolidated EBITDA to Interest Expense is greater
than 1.75 for the last twelve month period.
Security: The New Secured PIK Notes shall be secured by
liens on substantially all of the Reorganized
Company's assets junior solely to the New Senior
Secured Notes and the Working Capital Facility.
Optional
Redemption: New Secured PIK Notes may be redeemed, in whole or
in part, at any time, at the option of the Issuer,
at par plus accrued and unpaid interest to the
date of redemption.
Mandatory
Redemption: At an annual measuring point to be agreed upon by
PHI and the Creditors' Committee: (a) if the ratio
of the Company's consolidated EBITDA to Interest
Expense is greater than 2.0 for the last twelve
month period; and (b) the sum of the Company's
cash plus availability under its post-Effective
Date Working Capital Facility exceeds $25 million,
then 50% of such excess shall be used to redeem
the New Secured PIK Notes.
Covenants: Normal and customary for secured indebtedness of
this nature, to be determined to the reasonable
satisfaction of the Creditors' Committee.
<PAGE>
ANNEX C
SUMMARY TERMS OF NEW WARRANTS
Issuer: Reorganized Planet Hollywood International, Inc.
("PHI")
Strike Price: $65.50 per share
Term: Expire three years after the Effective Date
<PAGE>
EXHIBIT 1
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF AMENDED AND RESTATED PHI CERTIFICATE OF INCORPORATION
[TO BE INCLUDED]
<PAGE>
EXHIBIT 2
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF AMENDED AND RESTATED PHI BY-LAWS
[TO BE INCLUDED]
<PAGE>
EXHIBIT 3
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF NEW SENIOR SECURED NOTES INDENTURE
[TO BE INCLUDED]
<PAGE>
EXHIBIT 4
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF NEW SENIOR SECURED NOTES SECURITY
AND PLEDGE AGREEMENT
[TO BE INCLUDED]
<PAGE>
EXHIBIT 5
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF NEW WORKING CAPITAL FACILITY
[TO BE INCLUDED]
<PAGE>
EXHIBIT 6
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF WORKING CAPITAL FACILITY SECURITY AND PLEDGE AGREEMENT
[TO BE INCLUDED]
<PAGE>
EXHIBIT 7
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF NEW SECURED PIK NOTES INDENTURE
[TO BE INCLUDED]
<PAGE>
EXHIBIT 8
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF NEW SECURED PIK NOTES SECURITY AND PLEDGE AGREEMENT
[TO BE INCLUDED]
<PAGE>
EXHIBIT 9
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
[TO BE INCLUDED]
<PAGE>
EXHIBIT 10
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF NEW WARRANT AGREEMENT
[TO BE INCLUDED]
<PAGE>
EXHIBIT 11
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF NEW WARRANTS
[TO BE INCLUDED]
<PAGE>
EXHIBIT 12
TO
FIRST AMENDED JOINT PLAN OF REORGANIZATION
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
FORM OF REGISTRATION RIGHTS AGREEMENT
[TO BE INCLUDED]
<PAGE>
EXHIBIT 2
TO
FIRST AMENDED DISCLOSURE STATEMENT FOR THE
FIRST AMENDED JOINT REORGANIZATION PLAN OF
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
LIST OF LICENSED OR FRANCHISED UNITS
<PAGE>
PLANET HOLLYWOOD UNITS
Cancun, Mexico Puerto Vallarta, Mexico
Jakarta, Indonesia Moscow, Russia
Sydney, Australia Cape Town, South Africa
Acapulco, Mexico Dubai, United Arab Emirates
Bangkok, Thailand Tel Aviv, Israel
Beirut, Lebanon Guam
Singapore Melbourne, Australia
Kuala Lumpur, Malaysia Rome, Italy
Madrid, Spain Gold Coast, Australia
Taipei, Taiwan Sao Paulo, Brazil
Montreal, Canada Niagara Falls, Canada
Vancouver, Canada Toronto, Canada
Hong Kong New Orleans, Louisiana
Barcelona, Spain
OFFICIAL ALL STAR CAFE UNITS
Mexico City, Mexico Melbourne, Australia
Atlantic City, New Jersey Honolulu, Hawaii
<PAGE>
EXHIBIT 3
TO
FIRST AMENDED DISCLOSURE STATEMENT FOR THE
FIRST AMENDED JOINT REORGANIZATION PLAN OF
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
LIST OF LOCATIONS CLOSED SINCE JANUARY 1, 1999
PLANET HOLLYWOOD UNITS
Houston, Texas Edmonton, Canada
Miami, Florida Chicago, Illinois
Ft. Lauderdale, Florida Gurnee Mills, Illinois
Prague, Czech Republic Maui, Hawaii
Helsinki, Finland Phoenix Arizona
Aspen, Colorado Costa Mesa, California
Zurich, Switzerland
Indianapolis, Indiana
OFFICIAL ALL STAR CAFE UNITS
Atlanta, Georgia
SOUND REPUBLIC UNITS
London, England
COOL PLANET UNITS
Irvine, California
<PAGE>
EXHIBIT 4
TO
FIRST AMENDED DISCLOSURE STATEMENT FOR THE
FIRST AMENDED JOINT REORGANIZATION PLAN OF
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
LIST OF LOCATIONS SUBJECT TO LANDLORD SETTLEMENT AGREEMENTS
<PAGE>
MODIFIED LEASES AGREED TO
PLANET HOLLYWOOD UNITS
Atlantic City, New Jersey
Myrtle Beach, South Carolina
Washington, D.C.
Mall of America, Minnesota
Gatwick, England
Lake Tahoe, Nevada
Baltimore, Maryland
Atlanta, Georgia
Honolulu, Hawaii
Nashville, Tennessee
San Diego, California
Seattle, Washington
UNITS FRANCHISED/LICENSED TO THIRD PARTIES
PLANET HOLLYWOOD UNITS
New Orleans, Louisiana
Montreal, Canada
Toronto, Canada
Vancouver, Canada
OFFICIAL ALL STAR CAFE UNITS
Atlantic City, New Jersey
Honolulu, Hawaii
<PAGE>
EXHIBIT 5
TO
FIRST AMENDED DISCLOSURE STATEMENT FOR THE
FIRST AMENDED JOINT REORGANIZATION PLAN OF
PLANET HOLLYWOOD INTERNATIONAL INC.
AND CERTAIN OF ITS SUBSIDIARIES
HISTORICAL FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PLANET HOLLYWOOD INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS STATED IN THOUSANDS OF JUNE 27, DECEMBER 27,
U.S. DOLLARS 1999 1998
------------ ------------
(UNAUDITED)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalent....................... $ 21,702 $ 45,426
Accounts receivable, net....................... 12,835 16,740
Taxes receivable............................... -- 12,308
Inventories.................................... 15,329 19,186
Prepaid expenses and other assets.............. 8,047 6,271
----------- ----------
Total current assets.................. 57,913 99,931
Restricted cash and cash equivalents........... 9,155 16,265
Property and equipment, net.................... 264,362 281,115
Goodwill, net.................................. 26,212 27,057
Other assets, net.............................. 16,934 16,417
Investments in affiliated entities............. 30,080 31,842
---------- ----------
Total assets.......................... $ 404,656 $ 472,627
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities....... $ 70,191 $ 64,783
Notes payable - current........................ 257,722 25,326
-------------- --------------
Total current liabilities............. 327,913 90,109
Deferred rentals............................... 11,442 11,618
Notes payable.................................. 4,324 254,420
Capital lease obligation....................... 3,876 3,815
Deferred credits............................... 7,464 6,350
Total liabilities..................... 355,019 366,312
Minority interest.............................. 5,504 --
Stockholders' equity:
Common stock - Class A.................... 1,003 974
Common stock - Class B.................... 89 118
Capital in excess of par value............ 286,367 285,667
Deferred compensation..................... (125) (225)
Accumulated deficit....................... (240,176) (177,288)
Accumulated other compensation income..... (3,025) (2,931)
----------- -----------
Total stockholders' equity..................... 44,133 106,315
====== =======
Total liabilities and stockholders' equity $ 404,656 $ 472,627
============== ==============
Note: Unaudited financial statements for twenty-six weeks ended June 27, 1999 should be
read in conjunction with the financial reports filed with the Securities and
Exchange Commission.
</TABLE>
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEK ENDED
PLANET HOLLYWOOD INTERNATIONAL INC. AND SUBSIDIARIES ----------------------- -------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS JUNE 27, JUNE 28, JUNE 27, JUNE 28,
(UNAUDITED)STATED IN THOUSANDS OF U.S. DOLLARS, EXCEPT PER 1999 1998 1999 1998
SHARE AMOUNTS ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues................................................ $ 76,647 $ 105,112 $ 151,675 $ 201,644
Cost and expenses:
Cost of sales...................................... 20,728 25,328 40,961 48,957
Operating expenses................................. 57,259 57,973 113,068 112,646
General and administrative expenses................ 12,380 9,932 24,175 18,300
Preopening costs................................... 303 2,559 303 4,675
Depreciation and amortization...................... 4,891 5,842 9,983 11,197
Restructuring charges.............................. -- -- 3,500 --
Impairment of long lived assets......................... -- -- 4,598 --
---------- --------- --------- --------
95,561 101,634 196,588 195,775
Income (loss) from operations........................... (18,914) 3,478 (44,913) 5,869
Non-operating expenses (income):
Interest expense................................... 9,136 6,888 17,254 7,304
Interest income.................................... (282) (1,332) (774) (1,561)
Equity in (common) loss of
unconsolidated affiliates........................ 58 (100) 1,155 (505)
Other.............................................. 340 -- 340 --
----------- ---------- ---------- ---------
Income (loss) before income taxes and
cumulative effect.................................. (28,166) (1,978) (62,888) 631
Provision for (benefit from) income taxes............... -- (742) -- 238
Income (loss) before cumulative effect of
change in accounting principle..................... (28,166) (1,236) (62,888) 393
Cumulative effect of change in accounting
principal.......................................... -- -- -- (5,984)
------------- ------------- -------------- --------------
Net loss................................................ $ (28,166) $ (1,236) $ (62,888) $ (5,591)
============== ============== ============== ==============
Loss per share:
BASIC
Income (loss) before cumulative effect
of change in accounting principal.................. $ (0.26) $ (0.01) $ (0.58) $ 0.00
============== ============== ============== ==============
Cumulative effect of change in accounting
principle.......................................... -- -- -- (0.05)
Net loss................................................ $ (0.26) $ (0.01) $ (0.58) $ (0.05)
=============== ============== ============== ==============
DILUTED
Income (loss) before cumulative effect
of change in accounting principal.................. $ (0.26) $ (0.01) $ (0.58) $ 0.00
============== ============== ============== ==============
Cumulative effect of change in accounting
principle.......................................... -- -- -- (0.05)
============== ============== ============== ==============
Net loss................................................ $ (0.26) $ (0.01) $ (0.58) $ (0.05)
============== ============== ============== ==============
BASIC Weighted Average Shares........................... 109,091 109,089 109,091 109,056
============== ============== ============== ==============
DILUTED Weighted Average Shares......................... 109,091 109,692 109,091 109,787
============== ============== ============== ==============
Note: Unaudited financial statements for twenty-six weeks ended June 27, 1999
should be read in conjunction with the financial reports filed with the Securities and
Exchange Commission.
</TABLE>
<TABLE>
<CAPTION>
PLANET HOLLYWOOD INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
STATED IN THOUSANDS OF U.S. DOLLARS
TWENTY-SIX WEEKS ENDED
JUNE 27, JUNE 28,
1999 1998
---- ----
<S> <C> <C>
NET CASH USED IN OPERATING ACTIVITIES $(27,724) $(20,926)
Cash flows from investing activities:
Additions to property and equipment...................... (4,281) (39,384)
Proceeds from sales of property and equipment............ 20,540 --
Purchase of restaurant from franchisee................... -- (2,635)
Sale of joint venture interests.......................... -- 2,250
Investment in affiliate.................................. 107 (461)
Other.................................................... -- (767)
---------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 16,366 (40,997)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of notes payable.................. 2,370 250,000
Change in restricted cash................................ 3,104 --
Exercise of stock options................................ -- 61
Deferred financing costs................................. -- (10,455)
Repayment of notes payable............................... (17,851) (63,106)
----------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES............... (12,377) 176,500
----------- ----------
EFFECT OF EXCHANGE RATES ON CASH.................................. 11 (160)
----------- ----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS.............. (23,724) 114,417
----------- ----------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.................. 45,426 9,089
----------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........................ $21,702 $123,506
=========== ==========
Note:
Unaudited financial statements for twenty-six weeks ended June 27, 1999 should
be read in conjunction with the financial reports filed with the Securities and
Exchange Commission.
</TABLE>
PLANET HOLLYWOOD INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
DECEMBER 27, 1998
<TABLE>
<CAPTION>
DECEMBER 28, DECEMBER 27,
1997 1998
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,089 $ 45,426
Accounts receivable, less allowance of $1,500 and $2,122 25,084 16,740
Inventories 42,612 19,186
Deferred taxes 10,427 --
Income taxes receivable -- 12,308
Pre-opening cost, net 7,803 --
Prepaid expenses and other assets 7,082 6,271
----------- -----------
Total current assets 102,097 99,931
Restricted cash and cash equivalents -- 16,265
Property and equipment, net 318,456 281,115
Goodwill 29,922 27,057
Deferred taxes 6,015 --
Other assets, net 8,665 16,417
Investment in affiliated entities 40,404 31,842
----------- -----------
Total assets $ 505,559 $ 427,627
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 54,100 $ 35,111
Accrued expenses 15,215 29,672
Notes payable - current 1,264 25,326
----------- -----------
Total current liabilities 70,579 90,109
Deferred rentals 10,798 11,618
Notes payable 66,628 254,420
Capital lease obligation 3,863 3,815
Deferred credits 15,150 6,350
----------- -----------
Total liabilities 167,018 366,312
----------- -----------
----------- -----------
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock, $.01 par value; 25,000,000 shares authorized; none issued;
preferences, limitations and rights to be established by the Board of Directors -- --
Common stock - Class A voting, $.01 par value; 250,000,000 shares authorized;
97,127,526 and 97,325,796 issued and outstanding, respectively 972 974
Common stock - Class B non-voting, $.01 par value, 25,000,000 shares authorized;
11,545,706 issued and outstanding 118 118
Capital in excess of par value 279,372 285,667
Deferred compensation (4,125) (225)
Retained earnings (accumulated deficit) 66,644 (177,288)
Cumulative currency translation adjustments (4,440) (2,931)
----------- -----------
Total sctockholders' equity 338,541 106,315
----------- -----------
Total liabilities and stockholders' equity $ 505,559 $ 472,627
----------- -----------
----------- -----------
Note:
Unaudited financial statements for twenty-six weeks ended June 27, 1999 should be read in
conjunction with the financial reports filed with the Securities and Exchange Commission
</TABLE>
PLANET HOLLYWOOD INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(OOOs OMITTED)
DECEMBER 27, 1998
<TABLE>
<CAPTION>
FISCAL FISCAL FISCAL
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Direct $ 347,436 $ 447,310 $ 367,296
Royalty 4,528 11,715 8,078
Franchise 21,400 16,100 11,600
------------ ------------ ------------
373,364 475,125 386,974
------------ ------------ ------------
COSTS AND EXPENSES:
Cost of sales 90,816 119,449 110,874
Operating 156,893 208,484 237,930
General and administrative 23,041 54,683 64,548
Preopening expenses 14,257 18,868 10,384
Depreciation and amortization 13,038 19,957 25,024
Restructuring charges -- -- 6,925
Accelerated compensation expense -- -- 6,191
Impairment of long lived assets -- 48,699 125,843
------------ ------------ ------------
298,045 470,140 587,719
------------ ------------ ------------
Income (loss) from operations 75,319 4,985 (200,745)
------------ ------------ ------------
NON-OPERATING (INCOME) EXPENSE
Interest income (2,121) (1,327) (4,847)
Interest expense 4,995 -- 25,822
Equity in (income) loss of unconsolidated affiliates (4,308) (6,900) 11,022
------------ ------------ ------------
(1,434) (8,227) 31,997
Income before minority interests 76,753 13,212 (232,742)
Minority interests 1,037 -- --
------------ ------------ ------------
Income before provision for income taxes 75,716 13,212 (232,742)
Provision for income taxes 27,636 4,954 5,206
------------ ------------ ------------
Income (loss) before extraordinary item 48,080 8,258 (237,948)
Extraordinary loss on early extinguishment of debt
(net of income tax benefit of $5,991) 10,421 -- --
Cumulative effect of change in accounting for preopening costs
(net of income taxes of $3,590) -- -- 5,984
------------ ------------ ------------
Net income (loss) $ 37,659 $ 8,258 $ (243,932)
------------ ------------ ------------
------------ ------------ ------------
EARNINGS PER SHARE:
BASIC:
Income (loss) before extraordinary item $ .47 $ .08 $ (2.18)
Extraordinary items (.10) -- --
Cumulative effect of accounting change -- -- (.06)
------------ ------------ ------------
Net income (loss) $ .37 $ .08 $ (2.24)
------------ ------------ ------------
------------ ------------ ------------
DILUTED:
Income (loss) before extraordinary item $ .47 $ .08 $ (2.17)
Extraordinary item (.10) -- --
Cumulative effect of accounting change -- -- (.06)
------------ ------------ ------------
Net income (loss) $ .37 $ .08 $ (2.23)
------------ ------------ ------------
------------ ------------ ------------
Note:
Unaudited financial statements for twenty-six weeks ended June 27, 1999 should
be read in conjunction with the financial reports filed with the
Securities and Exchange Commission
</TABLE>
PLANET HOLLYWOOD INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL FISCAL FISCAL
1996 1997 1998
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $ 37,659 $ 8,258 $ (243,932)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 11,620 18,173 22,129
Amortization 15,676 20,652 2,895
Extraordinary item 10,421 -- --
Impairment of long lived assets -- 48,699 125,843
Cumulative effect of change in accounting principle -- -- 5,984
Amortization of discount on senior subordinated notes, debt issue
costs and line of credit costs 1,167 -- 3,954
Amortization of celebrity restricted stock options and awards 1,268 2,864 8,736
Minority interests 1,037 -- --
Equity in income of unconsolidated affiliates (4,308) (6,900) 11,022
Changes in assets and liabilities:
Accounts receivable (15,604) (4,959) 9,015
Income taxes receivable -- -- (12,308)
Inventories (7,747) (22,008) 23,426
Prepaid expenses and other assets (1,778) (3,604) 811
Preopening costs (13,916) (19,869) --
Deferred income taxes 5,711 (10,125) 20,032
Accounts payable and accrued expenses 3,230 4,780 (3,558)
Deferred rentals 3,827 469 820
Deferred credits 100 (1,950) (8,800)
Other, net 467 (3,207) (4,079)
------------ ------------ ------------
Net cash provided by (used in) operating activities 48,830 31,273 (38,010)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (81,675) (120,033) (105,819)
Proceeds from sale of subsidiary interests -- -- 2,250
Proceeds from sale of transportation equipment 7,936 -- --
Purchase of restaurant from franchisee -- (8,083) (2,521)
Investment in affiliated entities (131) (22,721) (2,749)
Other -- (1,115) (1,240)
------------ ------------ ------------
Net cash used in investing activities (73,870) (151,952) (110,079)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in restricted cash and investments 610 -- (16,265)
Proceeds from issuance of senior subordinated notes -- -- 250,000
Distributions to minority interests (271) -- --
Proceeds from issuance of common stock 196,581 19,137 --
Proceeds from exercise of options -- 891 61
Proceeds from issuance of notes payable 3,360 63,028 34,809
IPO costs and financing costs capitalized (3,445) -- --
Deferred financing costs (698) (1,020) (11,163)
Repayment of stockholder notes payable (70,750) -- --
Repayment of notes payable (65,439) (883) (73,003)
------------ ------------ ------------
Net cash provided by financing activities 59,948 81,153 184,439
------------ ------------ ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH -- (1,216) (13)
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 34,908 (40,742) 36,337
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,923 49,831 9,089
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 49,831 $ 9,089 $ 45,426
------------ ------------ ------------
Note:
Unaudited financial statements for twenty-six weeks ended June 27, 1999 should
be read in conjunction with the financial reports filed with the
Securities and Exchange Commission
</TABLE>
Exhibit T3E-2
DONLIN RECANO
& Company, Inc.
TO BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES
AND OTHER NOMINEES:
We are enclosing herewith the materials listed below relating to the
solicitation of votes to accept or reject the First Amended Joint Plan of
Reorganization of Planet Hollywood International, Inc., ET AL. dated December
13, 1999 (the "Plan"). The solicitation is being conducted according to the
terms and conditions set forth in the First Amended Disclosure Statement
Pursuant to Section 1125 Of the Bankruptcy Code for the Plan for Planet
Hollywood International, Inc., ET AL. dated December 13, 1999 (the "Disclosure
Statement") and the related Ballots and Master Ballots. Capitalized terms used
herein and not otherwise defined have the meanings ascribed to such terms in the
Plan.
The Record Date for purposes of determining which Holders of Claims are
eligible to vote on the Plan is December 6, 1999. It is extremely important that
any record holder of Old Senior Subordinated Notes Claims, that is NOT the
beneficial owner of such Claims, deliver a Voting Solicitation Package to each
such beneficial owner so as to afford such beneficial owner an opportunity to
cast its vote to accept or reject the Plan and to elect to participate in the
pro rata distribution of New Senior Secured Notes, if any.
For your information and for forwarding to your clients (the "Beneficial
Owners") for whom you hold the instruments evidencing Old Senior Subordinated
Notes Claims registered in your name or in the name of your nominees, we have
enclosed the following documents in the Voting Solicitation Package transmitted
to you:
1. The Disclosure Statement, to which the Plan is annexed as Exhibit 1;
2. An individual Ballot for use by Beneficial Owners of one or more Claims
in Class 5; and
3. A copy of the Confirmation Procedures Notice.
We have also forwarded to you a printed form of letter which you may send
to your clients that are Beneficial Owners of Claims held in your name or in the
name of your nominee. This letter, or other similar correspondence prepared by
you, should be forwarded to your clients along with a pre-addressed return
envelope in which your clients can return their respective individual Ballots TO
YOU (collectively, with the Voting Solicitation Package, the "Solicitation
Materials").
PURSUANT TO THE CONFIRMATION PROCEDURES ORDER, YOU MUST TRANSMIT THE
SOLICITATION MATERIALS TO EACH BENEFICIAL OWNER NOT LATER THAN THREE (3)
BUSINESS DAYS AFTER YOUR RECEIPT OF THE SOLICITATION MATERIALS.
YOU MUST COMPLETE, EXECUTE AND RETURN THE MASTER BALLOT TO THE BALLOTING
AGENT ON OR BEFORE 5:00 P.M., EASTERN TIME, ON JANUARY 14, 2000. ACCORDINGLY,
THE BENEFICIAL OWNERS MUST COMPLETE, EXECUTE AND RETURN TO YOU THEIR BALLOTS IN
SUFFICIENT TIME PRIOR TO THE VOTING DEADLINE TO ENABLE YOU TO PROPERLY PREPARE
THE MASTER BALLOT AND FORWARD IT TO THE BALLOTING AGENT FOR ACTUAL RECEIPT
THEREBY ON OR BEFORE 5:00 P.M., EASTERN TIME, ON JANUARY 14, 2000.
After receipt of all timely and properly executed individual Ballots, you
must (a) transfer the requested information from each such individual Ballot
onto the Master Ballot enclosed herewith, (b) execute such Master Ballot, (c)
deliver such Master Ballot to the Balloting Agent prior to the Voting Deadline,
and (d) maintain the original of the individual Ballots received through to the
closure of the Debtors' Chapter 11 Cases.
We urge you to read the detailed instructions contained on the Master
Ballot and then complete, execute and return it to the Balloting Agent in one of
the following ways:
IF BY MAIL IF BY COURIER OR BY HAND
Planet Hollywood International, Planet Hollywood International,
Balloting Balloting
c/o Donlin, Recano & Company, Inc. c/o Donlin, Recano & Company, Inc.
P.O. Box 2034 Murray Hill 419 Park Avenue South Suite 1206
Station New York, New York 10156-0701 New York, NY 10016
A pre-addressed return envelope has been enclosed for your use if you are
returning your Master Ballot by mail.
Any Master Ballot transmitted by you, but not actually received by the
Balloting Agent until after the Voting Deadline will NOT be counted. Master
Ballots transmitted by facsimile will NOT be Counted.
If you are both a record holder and Beneficial Owner of specific Class 5
Claims, and you wish to vote on the Plan, you must complete, execute and return
an individual Beneficial Owner's Ballot to the Balloting Agent separately from
any Master Ballots you submit.
No fees or commissions will be payable to brokers, banks, or any other
person in connection with the solicitation of votes on the Plan. Upon written,
itemized request, however, the Debtors will reimburse you for customary mailing
and handling expenses incurred by you in forwarding Solicitation Materials to
the Beneficial Owners of Class 5 Claims held by you as a nominee or in a
fiduciary capacity.
Any inquiries you may have should be addressed to, and additional copies of
the Solicitation Materials may be obtained from, the Balloting Agent at (212)
481-1411.
Very truly yours,
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
AS THE AGENT OF THE DEBTORS OR THE BALLOTING AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENTS OR MAKE ANY STATEMENT ON BEHALF OF THE DEBTORS
OR THE BALLOTING AGENT IN CONNECTION WITH THE PLAN, OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
Exhibit T3E-3
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- -------------------------------------------x
In re: ) CHAPTER 11
PLANET HOLLYWOOD ) CASE NO. 99-3612(JJF)
INTERNATIONAL, INC., ET AL. )
) Jointly Administered
Debtors. )
- -------------------------------------------x
MASTER BALLOT FOR ACCEPTING OR REJECTING THE
FIRST AMENDED JOINT PLAN OF REORGANIZATION OF
PLANET HOLLYWOOD INTERNATIONAL, INC. AND
CERTAIN OF ITS SUBSIDIARIES AND
ELECTION TO PARTICIPATE IN
NEW SENIOR SECURED NOTE DISTRIBUTION
FOR USE BY RECORD HOLDER NOMINEES OF OWNERS
OF CLASS 5 (OLD SENIOR SUBORDINATED NOTES) CLAIMS
PLEASE READ AND FOLLOW THE INSTRUCTIONS ON THIS BALLOT CAREFULLY. PLEASE
COMPLETE, SIGN, AND DATE THIS MASTER BALLOT AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE PROMPTLY. IF YOUR VOTE AND ELECTION HAVE NOT BEEN RECEIVED
BY DONLIN, RECANO & COMPANY, INC. (THE "BALLOTING AGENT") BY 5:00 P.M., EASTERN
TIME, ON OR BEFORE JANUARY 14, 2000, IT WILL NOT BE COUNTED AND YOU WILL HAVE NO
RIGHT TO PARTICIPATE IN THE NEW SENIOR SECURED NOTE DISTRIBUTION.
ITEM 1. The undersigned, a record holder as of December 6, 1999 (the
"Record Date"), of the aggregate principal amount of $_____________ of Old
Senior Subordinated Notes, plus pre-petition accrued unpaid interest on the
Notes, certifies the following (please complete):
(i) __________ beneficial owners of an aggregate principal amount of
$__________ Old Senior Subordinated Notes, plus pre-petition accrued
unpaid interest on the Notes, from whom voting instructions were
received voted to accept the Plan.
(ii) __________ beneficial owners of an aggregate principal amount of
$__________ Old Senior Subordinated Notes, plus pre-petition accrued
unpaid interest on the Notes, from whom voting instructions were
received voted to reject the Plan.
(iii) __________ beneficial owners of an aggregate principal amount of
$__________ Old Senior Subordinated Notes, plus pre-petition accrued
unpaid interest on the Notes, checked the box electing to participate
pro rata in the distribution of New Senior Secured Notes, if any.
ITEM 2. The undersigned certifies that each beneficial owner of Old Senior
Subordinated Notes for which it is the registered record holder nominee,
including those whose votes are being transmitted by this Master Ballot has been
provided with a copy of the First Amended Disclosure Statement pursuant to
Section 1125 of the Bankruptcy Code for the First Amended Joint Plan of
Reorganization for Planet Hollywood International, Inc., and Certain of its
Subsidiaries dated December 13, 1999 (the "Disclosure Statement"), including the
exhibits thereto.
ITEM 3. The undersigned certifies that it is the registered record holder
nominee in its own name or through a position held at a securities depository of
the Old Senior Subordinated Notes set forth in the Addressee Information area
above and referred to in Item 1.
ITEM 4. Beneficial Owner Information.
Please complete the following Beneficial Owner Summary Schedule with
respect to the tabulation of Old Senior Subordinated Notes set forth in Item 1.
You may at your option provide the information requested on a separate
computer-generated schedule, or other schedule, which is marked with your name
and signed and attached to this Master Ballot.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT (PLUS PRE-PETITION ELECTS TO RECEIVE
ACCRUED UNPAID INTEREST) VOTED TO NEW SENIOR SECURED
NAME (OPTIONAL) ACCOUNT NO. ACCEPT THE PLAN REJECT THE PLAN NOTES
<S> <C> <C> <C> <C> <C>
1
- ----------------------------------------------------------------------------------------------------------------
2
- ----------------------------------------------------------------------------------------------------------------
3
- ----------------------------------------------------------------------------------------------------------------
$ $ $
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(ATTACH ADDITIONAL PAGES IF NECESSARY)
ADDITIONAL PAGES ARE / / ARE NOT / / ATTACHED TO THIS MASTER BALLOT.
Name:
------------------------------------
(Print or Type)
Federal Tax I.D. No. or
Social Security No.:
---------------------
(Optional)
Signature:
------------------------------
(If Appropriate)
By:
---------------------------
(If Appropriate)
Title:
------------------
Address:
-----------------------------------
Street
City, State and Zip Code:
------------------
Telephone Number: ( )
-------------------------
Name of Contact Person:
-------------------
Date Completed:
---------------------------
<PAGE>
INSTRUCTIONS FOR COMPLETING THE
MASTER BALLOT FOR OLD SENIOR SUBORDINATED NOTES CLAIMS
The Master Ballot to which these Instructions relate is not a letter of
transmittal and may not be used for any purpose other than for record holder
nominees of beneficial owners of Old Senior Subordinated Notes Claims to record,
summarize and transmit votes cast to accept or reject the Plan, and elections to
participate pro rata in the distribution of New Senior Secured Notes, if any, by
their respective beneficial owners. Accordingly, record holder nominees should
not surrender any certificates representing their securities in connection with
voting on the Plan, and the Balloting Agent will not accept delivery of any such
certificates tendered together with this Master Ballot.
The record date (the "Record Date") for purposes of determining which
holders of Old Senior Subordinated Notes Claims are eligible to vote on the Plan
is December 6, 1999.
WITH RESPECT TO ANY BALLOTS RETURNED TO YOU BY A BENEFICIAL OWNER, YOU MUST
COMPLETE AND SIGN A MASTER BALLOT AND RETURN THE MASTER BALLOT TO THE BALLOTING
AGENT NOT LATER THAN 5:00 P.M. EASTERN TIME, ON JANUARY 14, 2000 (THE "VOTING
DEADLINE"). MASTER BALLOTS NOT RECEIVED BY THE VOTING DEADLINE WILL NOT BE
COUNTED.
Please forward this Master Ballot in the enclosed return envelope to:
IF BY MAIL IF BY COURIER OR BY HAND
Planet Hollywood International, Planet Hollywood International,
Balloting Balloting
c/o Donlin, Recano & Company, Inc. c/o Donlin, Recano & Company, Inc.
P.O. Box 2034 Murray Hill Station 419 Park Avenue South Suite 1206
New York, NY 10156-0701 New York, NY 10016
Please retain all executed Beneficial Owner Ballots for one year.
BALLOTS RECEIVED BY FACSIMILE TRANSMISSION ARE NOT TO BE COUNTED.
Multiple Master Ballots may be completed and delivered to the Balloting
Agent. Votes reflected on multiple Master Ballots will be counted to the extent
that they are not duplicative of other Master Ballots. If two or more Master
Ballots are inconsistent, the latest dated Master Ballot received prior to the
Voting Deadline will, to the extent of such inconsistency, supersede and revoke
any prior Master Ballot. If more than one Master Ballot is submitted and the
later Master Ballot(s) supplements rather than supersedes earlier Master
Ballots, please mark the subsequent Master Ballot(s) with such language as you
customarily use to indicate that an additional vote is being cast that is not
meant to revoke an earlier vote.
Your response to Item 1 should aggregate as one vote all of the votes cast
by a single beneficial owner of Old Senior Subordinated Notes Claims.
Please note that Item 4 of the Master Ballot requests that you transcribe
information on the Master Ballot in the indicated format providing information
for each individual beneficial owner of Old Senior Subordinated Notes Claims on
whose behalf you are executing a Master Ballot. To identify each such beneficial
owner without disclosing their names, please use the customer account number
assigned by you to each such beneficial owner. In the event that a single
customer has more than one account with you, you must list each account in
respect of which votes have been cast on the Plan.
Please indicate whether you are attaching additional pages in response to
Item 4. All additional pages should be marked with your name and signed and
identify the Item of the Master Ballot to which it relates.
If you are the beneficial owner of any of the Old Senior Subordinated Notes
Claims which you hold of record, you MUST use a beneficial owner's Ballot to
vote your Claims and make the New Senior Secured Note election.
Each beneficial owner must vote the aggregate of the principal amount (plus
pre-petition accrued unpaid interest) of all of its Old Senior Subordinated
Notes either to accept or reject the Plan. Furthermore, for purposes of
computing the Master Ballot vote, each voting beneficial owner should be deemed
to have voted, as one vote, the aggregate of the principal amount (plus pre-paid
accrued unpaid interest) of all Old Senior Subordinated Notes for all accounts
identified by the beneficial owner on the Ballot. ANY BENEFICIAL OWNER BALLOT
THAT DOES NOT INDICATE EITHER AN ACCEPTANCE OF THE PLAN OR REJECTION OF THE PLAN
OR INDICATES BOTH AN ACCEPTANCE AND A REJECTION OF THE PLAN OR PARTIALLY ACCEPTS
AND PARTIALLY REJECTS THE PLAN MUST NOT BE COUNTED.
IF YOU DID NOT RECEIVE A RETURN ENVELOPE WITH YOUR MASTER BALLOT,
CONTACT DONLIN, RECANO & COMPANY, INC., THE BALLOTING AGENT, AT (212) 481-1411.
IF YOU HAVE ANY QUESTIONS REGARDING THIS MASTER BALLOT OR THE VOTING
PROCEDURES, PLEASE CALL DONLIN, RECANO & COMPANY, INC. AT (212) 481-1411.
Exhibit T3E-4
DECEMBER 17,1999
TO OUR CLIENTS:
Enclosed for your consideration are (a) the First Amended Disclosure
Statement Pursuant to Section 1125 of the Bankruptcy Code for the First Amended
Joint Plan of Reorganization dated December 13, 1999 for Planet Hollywood
International, Inc., and Certain of Its Subsidiaries (the "Disclosure
Statement"), to which the First Amended Joint Plan of Reorganization of Planet
Hollywood International, Inc., and Certain of Its Subsidiaries (the "Plan") is
annexed as Exhibit 1, (b) a Ballot for accepting or rejecting the Plan and
electing to participate pro rata in the distribution under the Plan of the New
Senior Secured Notes, (c) a copy of the Confirmation Procedures Notice, and (d)
a pre-addressed return envelope for you to use to return your Ballot to us.
Capitalized terms used and not otherwise defined herein have the meanings
ascribed to such terms in the Plan.
We are acting on behalf of the Holders of record of the Old Senior
Subordinated Notes Claims, as of the December 6, 1999 record date established by
the United States District Court for the District of Delaware, which is
presiding over the Chapter 11 Cases of Planet Hollywood International, Inc., and
its debtor subsidiaries, held for your account. We request that you complete and
execute the enclosed Ballot in accordance with the detailed instructions
contained on the Ballot. WE URGE YOU TO READ THE DISCLOSURE STATEMENT, THE
BALLOT AND THE OTHER SOLICITATION MATERIALS FORWARDED WITH THIS LETTER CAREFULLY
BEFORE TRANSMITTING YOUR BALLOT BACK TO US.
To have your vote count on the Plan, you must complete and execute the
Ballot and return it to us in the enclosed pre-addressed envelope. YOU SHOULD
RETURN YOUR BALLOT TO US SO THAT WE ACTUALLY RECEIVE IT IN SUFFICIENT TIME TO
transcribe your votes and other information on your Ballot onto a Master Ballot
which we MUST forward to the Balloting Agent so as to be received by such Agent
on or before 5:00 p.m., Eastern Time, January 14, 2000 (the "Voting Deadline").
ANY VOTES RECEIVED BY US TOO LATE TO INCLUDE THE INFORMATION ON A MASTER BALLOT
AND RETURN TO THE BALLOTING AGENT PRIOR TO THE VOTING DEADLINE WILL NOT BE
INCLUDED ON THE MASTER BALLOT AND WILL NOT BE COUNTED, AND YOU WILL NOT BE
ENTITLED TO PARTICIPATE PRO RATA IN THE DISTRIBUTION UNDER THE PLAN OF THE NEW
SENIOR SECURED NOTES.
Questions or requests for assistance in respect of your beneficial
ownership of Class 5 (Old Senior Subordinated Notes) Claims may be directed to
us, or, you may contact the Balloting Agent at (212) 481-1411.
Exhibit T3E-5
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- --------------------------------------x
In re: ) CHAPTER 11
)
PLANET HOLLYWOOD ) CASE NO. 99-3612(JfF)
INTERNATIONAL, INC., et al. )
) Jointly Administered
Debtors. )
)
- --------------------------------------x
BALLOT FOR ACCEPTING OR REJECTING THE
FIRST AMENDED JOINT PLAN OF REORGANIZATION OF
PLANET HOLLYWOOD INTERNATIONAL, INC. AND
CERTAIN OF ITS SUBSIDIARIES AND
ELECTION TO PARTICIPATE IN
NEW SENIOR SECURED NOTE DISTRIBUTION
BALLOT FOR CLASS 5 CLAIMS
(OLD SENIOR SUBORDINATED NOTES CLAIMS)
BENEFICIAL OWNERS
PLEASE READ AND FOLLOW THE INSTRUCTIONS ON THIS BALLOT CAREFULLY. PLEASE
COMPLETE, SIGN, AND DATE THIS BALLOT AND RETURN IT IN THE ENCLOSED POSTAGE-PAID
ENVELOPE PROMPTLY.
IF YOU ARE ALSO THE RECORD HOLDER OF THE OLD SENIOR SUBORDINATED NOTES CLAIMS,
YOU MUST RETURN YOUR BALLOT AND ELECTION DIRECTLY TO THE BALLOTING AGENT BY 5:00
P.M., EASTERN TIME, ON OR BEFORE JANUARY 14,2000 OR, IT WILL NOT BE COUNTED AND
YOU WILL HAVE NO RIGHT TO PARTICIPATE IN THE NEW SENIOR SECURED NOTE
DISTRIBUTION.
IF YOU ARE NOT ALSO THE RECORD HOLDER OF THE OLD SENIOR SUBORDINATED NOTES
CLAIMS, YOU MUST RETURN YOUR BALLOT SO THAT IT IS RECEIVED BY YOUR BROKER, BANK
OR NOMINEE ("NOMINEE") IN SUFFICIENT TIME TO PERMIT YOUR NOMINEE TO INCLUDE YOUR
VOTE AND ELECTION ON ITS MASTER BALLOT. EACH NOMINEE MASTER BALLOT MUST BE
ACTUALLY RECEIVED BY DONLIN, RECANO & COMPANY, INC. (THE "BALLOTING AGENT") BY
5:00 P.M., EASTERN TIME, ON OR BEFORE JANUARY 14,2000, IN ORDER TO BE COUNTED.
Planet Hollywood International, Inc. and twenty-five of its subsidiaries
that are debtors herein (the "Debtors") are soliciting your votes with respect
to the Debtors' First Amended Joint Plan of Reorganization dated December 13,
1999 of Planet Hollywood International, Inc. and Certain of Its Subsidiaries
(the "Plan"). The Plan is further described in the First Amended Disclosure
Statement Pursuant to Section 1125 of the Bankruptcy Code dated December 13,
1999 (the "Disclosure Statement"). On December 14, 1999, the United States
District Court for the District of Delaware (the "Court") entered an order
approving the Disclosure Statement as containing adequate information.
PLEASE CHECK THE APPROPRIATE BOX BELOW TO INDICATE YOUR ACCEPTANCE OR
REJECTION OF THE PLAN:
ITEM 1. AMOUNT OF OLD SENIOR SUBORDINATED NOTES CLAIMS AS TO WHICH VOTES
ARE CAST. This Ballot is cast by or on behalf of the beneficial owner of the
aggregate principal amount of the Old Senior Subordinated Notes as indicated
immediately below plus pre-petition accrued unpaid interest on the Notes. Please
fill out the following as may be appropriate.
ACCOUNT
NUMBER PRINCIPAL NAME OF RECORD HOLDER OR
(IF ANY) AMOUNT NOMINEE (IF APPROPRIATE)
- -------------------------------------------------------------------------------
$
TOTAL: $
Or, if you do not hold your Old Senior Subordinated Notes through a brokerage
firm, bank or similar institution, $_______ in aggregate principal amount of Old
Senior Subordinated Notes, plus pre-petition accrued unpaid interest on the
Notes.
ITEM 2. VOTE ON THE PLAN. The undersigned Holder of the amount of Old
Senior Subordinated Notes Claims set forth in Item 1 votes to (please check one
box below):
ACCEPT THE PLAN REJECT THE PLAN
--------------- ----------------
/ / / /
RELEASES PROVIDED IN THE PLAN
Section 12.1 of the Plan, which is set forth in its entirety below,
provides for a general release to be granted by each Holder of Claim against or
Interest in, the Debtors. PLEASE READ THE TEXT OF SECTION 12.1 IN ITS ENTIRETY
AND SECTION VIII OF THE DISCLOSURE STATEMENT WHICH DESCRIBES THE RELEASE
PROVISIONS.
12.1 [RELEASE BY CREDITORS]. On the Effective Date, each Holder of a Claim
or Interest shall be deemed to have released unconditionally, and hereby is
deemed to release unconditionally on such date, the Releasees, from any and all
rights, claims, causes of action, obligations, suits, judgments, damages and
liabilities whatsoever which any such Holder may be entitled to assert, whether
known or unknown, foreseen or unforeseen, existing or hereafter arising, in law,
equity or otherwise, based in whole or in part upon any act or omission,
transaction, event or other occurrence taking place on or before the Effective
Date in any way relating to Reorganized PHI, the other Reorganized Debtors, the
Chapter 11 Cases or the Plan, except that no Releasees shall be released from
acts or omissions which are the result of gross negligence or willful
misconduct.
For purposes of this section, the term "Releasees" shall have the
following, meaning, as set forth in section 12.1 of the Plan: (i) each present
or former officer, director, shareholder, employee, consultant, attorney,
accountant and other representatives of the Debtors, the Domestic Subsidiaries
and the Foreign Subsidiaries, PROVIDED, HOWEVER, that in no event shall the
Reorganized Debtors be deemed to have released any Releasee that asserts a
Disputed Claim against the Debtors or the Reorganized Debtors from any claim,
counter claim, defense or offset that may be asserted in connection with such
claim; (ii) the Creditors' Committee and, solely in their capacity as members or
representatives of the Creditors' Committee each consultant, attorney,
accountant or other representative or member (and each of such member's
respective officers, directors, shareholders, employees, consultants, attorneys,
accountants and other representatives) of the Creditors' Committee; and (iii)
the Holders of Old Senior Subordinated Notes Claims that are or were at any time
members of the Unofficial Noteholders' Committee and, solely in their capacity
as representatives of such Holders, each of such Holder's respective officers,
directors, shareholders, employees, consultants, attorneys, accountants and
other representatives as well as attorneys and financial advisors to the
Unofficial Noteholders' Committee, and their officers, directors, shareholders
and employees.
ITEM 3. By signing this Ballot, the undersigned certifies that the Holder
has been provided with a copy of the Disclosure Statement, including all
Exhibits thereto.
ITEM 4. ELECTION TO PARTICIPATE IN NEW SENIOR SECURED NOTES
The Plan provides that if, prior to the Confirmation Date, PHI has entered
into the Bay Harbour Agreement (as defined in the Plan), then PHI shall deliver
to Holders of Class 5 Claims that elect to participate by checking the box
below, such Holder's Pro Rata share of (a) up to $25 million of New Senior
Secured Notes; and (b) a fee of up to $625,000 Cash and up to 350,000 shares of
New Class A Common Stock, in lieu of a portion of the Cash payable to Class 5
Holders. IF YOU WISH TO ELECT TO PARTICIPATE IN THE DISTRIBUTION OF NEW SENIOR
SECURED NOTES DESCRIBED, YOU MUST CHECK THE BOX BELOW. IF YOU DO NOT CHECK THE
BOX, YOU WILL NOT BE TREATED AS AN ELECTING HOLDER OF CLASS 5 CLAIMS, AND SHALL
HAVE NO RIGHT UNDER THE PLAN TO PARTICIPATE IN THE PRO RATA DISTRIBUTION OF THE
NEW SENIOR SECURED NOTES:
THE UNDERSIGNED HEREBY
ELECTS TO PARTICIPATE IN / /
THE DISTRIBUTION OF NEW
SENIOR SECURED NOTES
ITEM 5. By signing this Ballot, the undersigned certifies that (i) the
Holder of the Old Senior Subordinated Notes Claims set forth in Item I has full
power and authority to vote to accept or reject the Plan; (ii) the information
set forth above is complete and correct in all respects; and (iii) this Ballot
has been executed on behalf of a single beneficial owner. The undersigned also
acknowledges that this solicitation of acceptance or rejection of the Plan and
of the New Senior Secured Note distribution election is governed by all terms
and conditions of the Plan and the description thereof in the Disclosure
Statement.
Name:
-------------------------------------------
(Print or Type)
-------------------------------------------------
-------------------------------------------------
Federal Tax I.D. No. or Social Security No.
Signature:
----------------------------------------
By:
-----------------------------------------------
(If Applicable)
Address:
-------------------------------------------
Street:
--------------------------------------------
--------------------------------------------
City, State and Zip Code
Telephone Number: ( )
----------------------------------
Date Completed:
-------------------------------------
INSTRUCTIONS FOR COMPLETING THE
OLD SENIOR SUBORDINATED NOTES CLAIM BALLOT
THE BALLOT IS NOT A LETTER OF TRANSMITTAL AND MAY NOT BE USED FOR ANY
PURPOSE OTHER THAN TO ACCEPT OR REJECT THE PLAN AND ELECT TO PARTICIPATE PRO
RATA IN THE DISTRIBUTION OF NEW SENIOR SECURED NOTES. ACCORDINGLY, HOLDERS
SHOULD NOT SURRENDER CERTIFICATES REPRESENTING THEIR SECURITIES IN CONNECTION
WITH VOTING ON THE PLAN, AND THE BALLOTING AGENT WILL NOT ACCEPT DELIVERY OF ANY
SUCH CERTIFICATES TENDERED TOGETHER WITH THIS BALLOT.
The record date (the "Record Date") for purposes of determining which
Holders of Old Senior Subordinated Notes Claims are eligible to vote on the Plan
is December 6, 1999. Only Holders of Old Senior Subordinated Notes on the Record
Date in whose name such Notes are either registered on the books of United
States Trust Company of New York, the indenture trustee for the indenture
governing the Notes, are held in street name through a bank, broker or other
institution or nominee, or any person who has obtained a properly completed
proxy or power of attorney from such person are eligible to vote on the Plan.
The Plan may be confirmed by the Court and thereby made binding on you if
it is accepted by the Holders of two-thirds in amount and more than one-half in
number of Claims in each Class voting on the Plan. If the requisite acceptances
are not obtained, the Court may nevertheless confirm the Plan if the Court finds
that the Plan accords fair and equal treatment to the Class or Classes rejecting
it and otherwise satisfies the requirements of ss. 1129(b) of the Bankruptcy
Code. If the Plan is confirmed by the Court, all Holders of Old Senior
Subordinated Notes Claims and any and all other Holders of other Claims against
and Interests in the Debtors (including those who abstain or reject the Plan)
will be bound by the confirmed Plan and the transactions contemplated thereby.
TO HAVE YOUR VOTE AND ELECTION COUNT, YOU MUST COMPLETE, SIGN AND RETURN THIS
BALLOT IN THE ENCLOSED RETURN ENVELOPE PROVIDED AS FOLLOWS:
IF YOU ARE ALSO THE RECORD HOLDER OF THE OLD SENIOR SUBORDINATED NOTES CLAIMS
BEING VOTED HEREIN, RETURN THE BALLOT SO THAT IT IS RECEIVED BY THE BALLOTING
AGENT NO LATER THAN 5:00 P.M., EASTERN TIME, ON JANUARY 14, 2000. ENVELOPES
SHOULD BE RETURNED TO:
IF BY MAIL IF BY COURIER OR HAND
Planet Hollywood International, Planet Hollywood International,
Balloting Balloting
c/o Donlin, Recano & Company, Inc. c/o Donlin, Recano & Company, Inc.
P.O. Box 2034 Murray Hill Station 419 Park Avenue South Suite 1206
New York, New York 10156-0701 New York, New York 10016
IF YOU ARE NOT ALSO THE RECORD HOLDER OF THE OLD SENIOR SUBORDINATED NOTES
CLAIMS BEING VOTED HEREIN, RETURN THE BALLOT TO YOUR NOMINEE SUFFICIENTLY IN
ADVANCE OF THE VOTING DEADLINE TO PERMIT THE NOMINEE TO INCLUDE YOUR VOTE ON THE
NOMINEE MASTER BALLOT.
ANY BALLOT WHICH IS EXECUTED BUT WHICH DOES NOT INDICATE EITHER AN
ACCEPTANCE OR REJECTION OF THE PLAN OR WHICH INDICATES BOTH AN ACCEPTANCE AND A
REJECTION OF THE PLAN WILL NOT BE COUNTED. YOUR ORIGINAL SIGNATURE IS REQUIRED
ON THE BALLOT IN ORDER FOR YOUR VOTE TO COUNT.
YOU MUST VOTE ALL OF YOUR CLAIMS WITHIN CLASS 5 UNDER THE PLAN EITHER TO
ACCEPT OR REJECT THE PLAN. ACCORDINGLY, A BALLOT THAT PARTIALLY ACCEPTS AND
PARTIALLY REJECTS THE PLAN WILL NOT BE COUNTED.
All capitalized terms used herein shall have the meanings ascribed to them
in the Plan. To properly complete the Ballot, you must follow the procedures
described below.
(a) Make sure that the information required in Item 1 has been inserted;
if you do not know the principal amount of the Old Senior Subordinated
Notes that you own, please contact either the Balloting Agent or, if
you are not the record Holder of the Notes, your nominee;
(b) Cast one vote to accept or reject the Plan by checking the proper box
in Item 2. Your vote to accept the Plan is also your agreement to
grant the release contained in Section 12.1 of the Plan;
(c) Indicate your election to participate in the pro rata distribution of
New Senior Secured Notes, as provided for in the Plan, by checking the
proper box in Item 4.
(d) Names of all joint Holders of Claims should be written even if signed
by only one Holder. If the Old Senior Subordinated Notes Claim is
held by a corporation, the Ballot should be executed in the name of
the corporation by an authorized agent. If the Old Senior Subordinated
Notes Claim is held by a partnership, the Ballot should be executed in
the name of the partnership by a general partner;
(e) Sign the Ballot. If you are completing this Ballot on behalf of
another entity, indicate your relationship with such entity and the
capacity in which you are signing;
(f) RETURN YOUR BALLOT USING THE ENCLOSED RETURN ENVELOPE. IF YOU RECEIVED
A RETURN ENVELOPE ADDRESSED DIRECTLY TO THE BALLOTING AGENT, PLEASE
MAIL YOUR BALLOT TO THE BALLOTING AGENT. IF YOU RECEIVED A RETURN
ENVELOPE ADDRESSED TO A NOMINEE, YOU MUST RETURN YOUR BALLOT TO SUCH
ENTITY.
(g) BALLOTS RECEIVED BY FACSIMILE TRANSMISSION WILL NOT BE COUNTED; and
(h) This Ballot has been prepared to reflect the type of Claim you hold
and the Class in which you are eligible to vote. If you hold Claims in
more than one Class, you may receive more than one Ballot, labeled for
different Classes of Claims. Each Ballot votes only your Claims in the
Class marked on the Ballot. You must vote a separate Ballot for each
Class of Claims that you hold a Claim in. Your vote will be counted in
determining acceptance or rejection of the Plan by a particular Class
only if you fill out and return the Ballot labeled for that Class in
accordance with the instructions on the Ballot.
IF YOU DID NOT RECEIVE A RETURN ENVELOPE WITH YOUR BALLOT, OR YOU BELIEVE THAT
YOU ARE MISSING ANY MATERIALS FROM THE SOLICITATION PACKAGE OR IF YOU BELIEVE
THAT YOU HAVE RECEIVED THE WRONG BALLOT, CONTACT DONLIN, RECANO & COMPANY, INC.,
THE BALLOTING AGENT, AT (212) 481-1411 OR YOUR NOMINEE.
IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT OR THE VOTING PROCEDURES, PLEASE
CALL THE BALLOTING AGENT AT (212) 481-1411.
Exhibit T3E-6
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: CHAPTER 11
- ----------------------------------------x
PLANET HOLLYWOOD ) CASE NO. 99-3612(JJF)
INTERNATIONAL, INC., ET AL. )
) Jointly Administered
Debtors. )
)
- ----------------------------------------x
BALLOT FOR ACCEPTING OR REJECTING THE
FIRST AMENDED JOINT PLAN OF REORGANIZATION OF
PLANET HOLLYWOOD INTERNATIONAL, INC. AND
CERTAIN OF ITS SUBSIDIARIES
BALLOT FOR CLASS 6 CLAIMS
(GENERAL UNSECURED CLAIMS)
PLEASE READ AND FOLLOW THE INSTRUCTIONS ON THIS BALLOT CAREFULLY. PLEASE
COMPLETE, SIGN, AND DATE THIS BALLOT AND RETURN IT IN THE ENCLOSED POSTAGE-PAID
ENVELOPE PROMPTLY. IF YOUR VOTE HAS NOT BEEN RECEIVED BY DONLIN, RECANO &
COMPANY, INC. (THE "BALLOTING AGENT") BY 5:00 P.M., EASTERN TIME, ON OR BEFORE
JANUARY 14, 2000, IT WILL NOT BE COUNTED.
Planet Hollywood International, Inc. and twenty-five of its subsidiaries
that are debtors herein (the "Debtors") are soliciting your votes with respect
to the Debtors' First Amended Joint Plan of Reorganization dated December 13,
1999 of Planet Hollywood International, Inc., and certain of its subsidiaries
(the "Plan"). The Plan is further described in the Amended Disclosure Statement
Pursuant to Section 1125 of the Bankruptcy Code for the Plan (the "Disclosure
Statement"). On December 14, 1999, the United States District Court for the
District of Delaware (the "Court") entered an order approving the Disclosure
Statement as containing adequate information.
PLEASE CHECK THE APPROPRIATE BOX BELOW TO INDICATE YOUR ACCEPTANCE OR REJECTION
OF THE PLAN, AND YOUR ELECTION REGARDING WHETHER TO BECOME PART OF THE
CONVENIENCE CLASS:
ITEM 1. PRINCIPAL AMOUNT OF GENERAL UNSECURED CLAIMS AS TO WHICH VOTES ARE
CAST. This Ballot is cast by or on behalf of the Holder of $__________ in amount
of General Unsecured Claims.
ITEM 2. VOTE ON THE PLAN. The undersigned Holder of the amount of General
Unsecured Claims set forth in Item 1 votes to (please check one box below):
ACCEPT THE PLAN REJECT THE PLAN
--------------- ---------------
/ / / /
Section 12.1 of the Plan, which is set forth in its entirety below,
provides for a general release to be granted by each Holder of a Claim against,
or Interest in, the Debtors. PLEASE READ THE TEXT OF SECTION 12.1 IN ITS
ENTIRETY AND SECTION VIII OF THE DISCLOSURE STATEMENT WHICH DESCRIBES THE
RELEASE PROVISIONS.
12.1 [RELEASE BY CREDITORS]. On the Effective Date, each Holder of a Claim
or Interest shall be deemed to have released unconditionally, and hereby is
deemed to release unconditionally on such date, the Releasees, from any and all
rights, claims, causes of action, obligations, suits, judgments, damages and
liabilities whatsoever which any such Holder may be entitled to assert, whether
known or unknown, foreseen or unforeseen, existing or hereafter arising, in law,
equity or otherwise, based in whole or in part upon any act or omission,
transaction, event or other occurrence taking place on or before the Effective
Date in any way relating to Reorganized PHI, the other Reorganized Debtors, the
Chapter 11 Cases or the Plan, except that no Releasees shall be released from
acts or omissions which are the result of gross negligence or willful
misconduct.
For purposes of this section, the term "Releasees" shall have the
following meaning as set forth in Section 12.1 of the Plan: (i) each present or
former officer, director, shareholder, employee, consultant, attorney,
accountant and other representatives of the Debtors, the Domestic Subsidiaries
and the Foreign Subsidiaries, PROVIDED, HOWEVER, that in no event shall the
Reorganized Debtors be deemed to have released any Releasee that asserts a
Disputed Claim against the Debtors or the Reorganized Debtors from any claim,
counter claim, defense or offset that may be asserted in connection with such
claim; (ii) the Creditors' Committee and, solely in their capacity as members or
representatives of the Creditors' Committee each consultant, attorney,
accountant or other representative or member (and each of such member's
respective officers, directors, shareholders, employees, consultants, attorneys,
accountants and other representatives) of the Creditors' Committee, and (iii)
the Holders of Old Senior Subordinated Notes Claims that are or were at any time
members of the Unofficial Noteholders' Committee and, solely in their capacity
as representatives of such Holders, each of such Holder's respective officers,
directors, shareholders, employees, consultants, attorneys, accountants and
other representatives as well as attorneys and financial advisors to the
Unofficial Noteholders' Committee, and their officers, directors, shareholders
and employees.
ITEM 3. CONVENIENCE CLASS ELECTION. The Plan provides that any Holder of a
General Unsecured Claim in an amount greater that $2000 may voluntarily agree to
reduce its Allowed Unsecured Claim amount to $2000 in exchange for being paid
$2000 in Cash on the later of (i) the Effective Date, (ii) the date such Claim
becomes an Allowed Claim, or (iii) as otherwise provided by Order of the Court.
If you wish to make this election, please check the following box:
THE UNDERSIGNED HEREBY AGREES TO
VOLUNTARILY REDUCE THE ALLOWED AMOUNT OF
ITS CLASS 6 GENERAL UNSECURED CLAIM TO / /
$2000 AND TO HAVE ITS CLAIM TREATED AS A
CLASS 4 CONVENIENCE CLAIM UNDER THE
PLAN.
This will be your only opportunity to make this election.
ITEM 4. By signing this Ballot, the undersigned certifies that the Holder
has been provided with a copy of the Disclosure Statement, including all
Exhibits thereto.
ITEM 5. By signing this Ballot, the undersigned certifies that (i) the
Holder of the General Unsecured Claims set forth in Item 1 has full power and
authority to vote to accept or reject the Plan and, if applicable, to exercise
the Convenience Class election set forth in Item 3, and (ii) the information set
forth above is complete and correct in all respects. The undersigned also
acknowledges that this solicitation of acceptance or rejection of the Plan is
governed by all terms and conditions of the Plan and the description thereof in
the Disclosure Statement.
Name:
-------------------------------------------
(Print or Type)
-------------------------------------------------
Federal Tax I.D. No. or Social Security No.
Signature:
----------------------------------------
By:
-----------------------------------------------
(If Appropriate)
Address:
-------------------------------------------
Street:
--------------------------------------------
--------------------------------------------
City, State and Zip Code
Telephone Number: ( )
----------------------------------
Date Completed:
-------------------------------------
INSTRUCTIONS FOR COMPLETING
THE GENERAL UNSECURED CLAIM BALLOT
THE BALLOT IS NOT A LETTER OF TRANSMITTAL AND MAY NOT BE USED FOR ANY
PURPOSE OTHER THAN TO ACCEPT OR REJECT THE PLAN, AND TO ELECT TO BECOME PART OF
THE CONVENIENCE CLASS.
The record date (the "Record Date") for purposes of determining which
Holders of General Unsecured Claims are eligible to vote on the Plan is December
6, 1999. Only Holders of General Unsecured Claims in whose name such Claims are
held on the Debtors' books on the Record Date, or who have timely filed a proof
of claim against one or more of the Debtors, or any person who has obtained a
properly completed proxy or power of attorney from such person are eligible to
vote on the Plan.
The Plan may be confirmed by the Court and thereby made binding on you if
it is accepted by the Holders of two-thirds in amount and more than one-half in
number of Claims in each Class voting on the Plan. In the event the requisite
acceptances are not obtained, the Court may nevertheless confirm the Plan if the
Court finds that the Plan accords fair and equal treatment to the Class or
Classes rejecting it and otherwise satisfies the requirements of ss. 1129(b) of
the Bankruptcy Code. If the Plan is confirmed by the Court, all Holders of
General Unsecured Claims and any and all other Holders of other Claims against
and Interests in the Debtors (including those who abstain or reject the Plan)
will be bound by the confirmed Plan and the transactions contemplated thereby.
TO HAVE YOUR VOTE COUNT, YOU MUST COMPLETE, SIGN AND RETURN THIS BALLOT IN THE
ENCLOSED RETURN ENVELOPE TO:
IF BY MAIL IF BY COURIER OR HAND
Planet Hollywood International, Planet Hollywood International,
Balloting Balloting
c/o Donlin, Recano & Company, Inc. c/o Donlin, Recano & Company, Inc.
P.O. Box 2034 Murray Hill Station 419 Park Avenue South Suite 1206
New York, New York 10156-0701 New York, New York 10016
TO HAVE YOUR VOTE COUNT, YOU MUST COMPLETE, SIGN AND RETURN THIS BALLOT SO
THAT IT IS RECEIVED BY THE BALLOTING AGENT NO LATER THAN 5:00 P.M., EASTERN
TIME, ON JANUARY 14,2000. ANY BALLOT WHICH IS EXECUTED BUT WHICH DOES NOT
INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE PLAN OR WHICH INDICATES BOTH
AN ACCEPTANCE AND A REJECTION OF THE PLAN WILL NOT BE COUNTED. YOUR ORIGINAL
SIGNATURE IS REQUIRED ON THE BALLOT IN ORDER FOR YOUR VOTE TO COUNT.
YOU MUST VOTE ALL OF YOUR CLAIMS WITHIN CLASS 6 UNDER THE PLAN EITHER TO
ACCEPT OR REJECT THE PLAN. ACCORDINGLY, A BALLOT THAT PARTIALLY ACCEPTS AND
PARTIALLY REJECTS THE PLAN WILL NOT BE COUNTED.
All capitalized terms used herein shall have the meanings ascribed to them
in the Plan. To properly complete the Ballot, you must follow the procedures
described below.
(a) Make sure that the information required in Item 1 has been inserted;
if you do not know the amount of your General Unsecured Claim, please
contact the Balloting Agent;
(b) Cast one vote to accept or reject the Plan by checking the proper box
in Item 2. Your vote to accept the Plan is also your agreement to
grant the release contained in Section 12.1 of the Plan;
(c) If you elect to reduce the Allowed amount of your Claim to $2000 and
be treated as a Holder of a Class 4 Claim, you MUST check the box in
Item 3;
(d) Sign the Ballot. Names of all joint Holders of Claims should be
written even if signed by only one. If the General Unsecured Claim is
held by a corporation, the Ballot should be executed in the name of
the corporation by an authorized agent. If the General Unsecured Claim
is held by a partnership, the Ballot should be executed in the name of
the partnership by a general partner. If you are completing this
Ballot on behalf of another entity, indicate your relationship with
such entity and the capacity in which you are signing;
(e) RETURN YOUR BALLOT USING THE ENCLOSED RETURN ENVELOPE TO THE BALLOTING
AGENT ACCORDING TO THE INSTRUCTIONS ABOVE. PLEASE MAIL YOUR BALLOT SO
THAT IT WILL BE RECEIVED BY 5:00 P.M. EASTERN TIME ON JANUARY 14,
2000. BALLOTS RECEIVED BY FACSIMILE TRANSMISSION WILL NOT BE COUNTED;
and
(f) This Ballot has been prepared to reflect the type of Claim you hold
and the Class in which you are eligible to vote. Multiple Claims of
the same type filed by a single Creditor or scheduled by the Debtors
have NOT been aggregated and treated as one Claim for purposes of
voting on the Plan. Accordingly, if you hold multiple Claims in the
same Class, you may receive more than one Ballot for that Class. In
addition, if you hold Claims in more than one Class, you may receive
more than one Ballot, labeled for different Classes of Claims. Each
Ballot votes only your Claims in the Class marked on the Ballot. You
must vote a separate Ballot for each Class of Claims that you hold a
Claim in. Your vote will be counted in determining acceptance or
rejection of the Plan by a particular Class only if you fill out and
return the Ballot labeled for that Class in accordance with the
instructions on the Ballot.
IF YOU DID NOT RECEIVE A RETURN ENVELOPE WITH YOUR BALLOT, OR YOU BELIEVE THAT
YOU ARE MISSING ANY MATERIALS FROM THE SOLICITATION PACKAGE OR IF YOU BELIEVE
THAT YOU HAVE RECEIVED THE WRONG BALLOT, CONTACT DONLIN, RECANO & COMPANY, INC.,
THE BALLOTING AGENT, AT (212) 481-1411.
IF YOU HAVE ANY QUESTIONS REGARDING THIS BALLOT OR THE VOTING PROCEDURES, PLEASE
CALL THE BALLOTING AGENT AT (212) 481-1411.
Exhibit T3E-7
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE:
) CHAPTER 11
PLANET HOLLYWOOD )
INTERNATIONAL, INC., ET AL. ) CASE NO. 99-3612 (JJF)
)
DEBTORS. ) (JOINTLY ADMINISTERED)
NOTICE OF ORDER (A) APPROVING THE DEBTORS' DISCLOSURE STATEMENT, FORMS
OF BALLOTS AND RELATED SOLICITATION MATERIAL, (B) ESTABLISHING PROCEDURES FOR
SOLICITATION OF VOTES ON THE DEBTORS' FIRST AMENDED JOINT PLAN OF
REORGANIZATION, (C) ESTABLISHING THE RECORD DATE, VOTING DEADLINE AND
PROCEDURES FOR TABULATION OF VOTES ON DEBTORS' PLAN, (D) ESTABLISHING
ADMINISTRATIVE CLAIMS BAR DATE AND (E) FIXING DATE AND TIME FOR THE FILING OF
OBJECTIONS TO, AND SCHEDULING HEARING ON, CONFIRMATION OF THE DEBTORS' PLAN
TO: ALL CREDITORS, INTEREST HOLDERS AND OTHER PARTIES-IN-INTEREST:
PLEASE TAKE NOTICE that the United States District Court for the District
of Delaware (the "Court") has approved by Order dated December 14, 1999 (the
"Confirmation Procedures Order"), the First Amended Disclosure Statement
Pursuant to Section 1125 of the Bankruptcy Code for the First Amended Joint Plan
of Reorganization dated December 13, 1999 of Planet Hollywood International,
Inc., and Certain of Its Subsidiaries (the "Disclosure Statement") as containing
adequate information within the meaning of Section 1125 of title 11 of the
United States Code (the "Bankruptcy Code").
PLEASE TAKE FURTHER NOTICE that pursuant to the Confirmation Procedures
Order, the Court also approved, INTER ALIA, the procedures to be utilized in
connection with soliciting votes on the Debtors' First Amended Joint Plan of
Reorganization dated December 13, 1999 (the "Plan"), and approved the forms of
Ballots(1), Master Ballots, Transmittal Letters, a Plan Summary and related
solicitation materials to be distributed to Creditors, equity security holders
and parties-in-interest, as applicable.
PLEASE TAKE FURTHER NOTICE that pursuant to the Confirmation Procedures
Order, the Court established December 6, 1999 as the record date (the "Record
Date") for purposes of determining which Holders of Claims and Interests are
entitled to receive solicitation materials and, if applicable, vote to accept or
reject the Plan.
PLEASE TAKE FURTHER NOTICE that pursuant to the Confirmation Procedures
Order, each beneficial owner of a Class 5 (Old Senior Subordinated Notes) Claim
as of the Record Date shall have, for purposes of voting on the Plan and
electing to participate in the pro rata distribution of the New Senior Secured
Notes, a provisionally "Allowed" Claim equal to the aggregate principal amount
of its Notes, and that each Holder of a Class 6 (General Unsecured) Claim shall
be provisionally "Allowed" for purposes of voting on the Plan either in the
undisputed, non-contingent, liquidated amount listed for each such Creditor in
the Schedules of Liabilities filed by the Debtors With the Court (the "Chapter
11 Schedules"), or in the amounts asserted in a proof of claim actually
received by the Court-appointed Claims Agent by the Record Date established in
these Chapter 11 Cases, unless prior to January 14, 2000 (the "Voting Objection
Deadline"), the Debtors have filed an objection to, or request for estimation
of, such Claim that has not been resolved or withdrawn.
- -----------------------------
1 Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Plan or in the Confirmation Procedures Order.
PLEASE TAKE FURTHER NOTICE that except as otherwise provided herein,
pursuant to the Confirmation Procedures Order, any Claim which is either listed
in the Chapter 11 Schedules as disputed, contingent or unliquidated, or as to
which an objection or request for estimation has been filed which is not
resolved or withdrawn before the Voting Objection Deadline, shall not be
permitted to vote on the Plan unless on or before the Voting Deadline (as
defined below), the Court, pursuant to Bankruptcy Rule 3018(a), temporarily
allows such Claim in a specified amount solely for the purpose of accepting or
rejecting the Plan, or the Debtors and the Holder of such Claim agree on a
Claim amount solely for purposes of voting on the Plan.
PLEASE TAKE FURTHER NOTICE that each vote cast to accept or reject the Plan
by or on behalf of the Holder of a Class 6 (General Unsecured) Claim that has
elected to be treated as a Holder of a Class 4 Claim under the Plan shall be
counted for all purposes as a Class 6 Claim in determining confirmation of the
Plan as if the Convenience Class Election had not been made by such Creditor.
PLEASE TAKE FURTHER NOTICE that in order to be counted, each Ballot cast by
the Holder of a Class 6 (General Unsecured) Claim as of the Voting Record Date
must be properly completed, signed (containing the original signature) and
mailed or delivered by courier or by hand to Donlin, Recano & Company, Inc. the
Balloting Agent, at the address indicated in the voting instructions
accompanying such Ballot, so that the Ballot is actually received NO LATER THAN
5:00 P.M. EASTERN TIME, ON JANUARY 14, 2000 (THE "VOTING DEADLINE").
PLEASE TAKE FURTHER NOTICE that in order to be counted, each Ballot cast by
the Holder of a Class 5 (Old Senior Subordinated Notes) Claim as of the Voting
Record Date which is the record and beneficial owner of such Claim must be
properly completed, signed (containing the original signature) and mailed or
delivered to the Balloting Agent, at the address indicated in the voting
instructions accompanying the Ballot, so that the Ballot is actually received
on or before the Voting Deadline.
PLEASE TAKE FURTHER NOTICE that in order to be counted, each Master Ballot
must be properly completed by the applicable Nominee (as defined below) in
accordance with the instructions contained thereon, signed (containing the
original signature) and delivered by the Nominee to the Balloting Agent, at the
address indicated or the voting instructions included on the Master Ballot, so
that such Master Ballot is actually received on or before the Voting Deadline.
PLEASE TAKE FURTHER NOTICE that in order to be counted, each Ballot cast by
the Holder of a Class 5 Claim that is the beneficial owner but not the record
Holder of such Claim as of the Voting Record Date, must be properly completed,
signed (containing the original signature) and mailed or delivered to the
brokerage, banking or other financial institution or nominee which is, or is
acting on behalf of, the beneficial owner of such Claim (the "Nominee"), at the
address and in the manner indicated in the voting instructions included with the
voting solicitation materials forwarded to each beneficial owner of a Class 5
Claim. BALLOTS FROM BENEFICIAL OWNERS WHICH ARE NOT TIMELY RECEIVED BY THEIR
RESPECTIVE NOMINEES WILL NOT BE COUNTED BY SUCH NOMINEES IF INCLUSION OF THE
INFORMATION WILL DELAY THE NOMINEES' SUBMISSION OF THE MASTER BALLOT BEYOND THE
VOTING DEADLINE.
PLEASE TAKE FURTHER NOTICE THAT any Ballot or Master Ballot that either (i)
is not properly executed, (ii) is sent by facsimile transmission, or (iii) is
received after the Voting Deadline, as may be applicable, shall not be counted
for any Plan confirmation purposes.
PLEASE TAKE FURTHER NOTICE that any Ballot that (i) does not indicate
either an acceptance or rejection of the Plan, or (ii) indicates both an
acceptance and a rejection of the Plan, shall NOT be Counted as having cast a
vote on the Plan.
PLEASE TAKE FURTHER NOTICE that at the Confirmation Hearing, the Debtors
will seek an order confirming the Plan and approving, INTER ALIA, (i) the
settlements and compromises embodied in the Plan and (ii) the substantive
consolidation of the Debtors' Estates.
PLEASE TAKE FURTHER NOTICE that pursuant to Section 1128 of the Bankruptcy
Code and Bankruptcy Rules 3020, 9006 and 9019, the Court has fixed January 14,
2000 as the last day for any Holder of a Claim or Interest or any other
party-in-interest to file and serve written objections, if any, to confirmation
of the Plan (a "Confirmation Objection"). Any Confirmation Objection must be in
writing and (i) state the name and address of the objecting party and the amount
of its Claim or the nature of its interest held or asserted by the objecting
party against the Debtors' Estates or property, (ii) state with particularity
the basis and nature of each objection and (iii) be filed with the Clerk of the
United States Bankruptcy Court for the District of Delaware, Marine Midland
Plaza, 824 Market Street, Fifth Floor, Wilmington, DE 19801 together with proof
of service thereof, and with the Chambers of the Honorable Joseph J. Farnan,
Jr., District Court Judge, located at J. Caleb Boggs Federal Building, 844
King Street, Lock Box 27, Wilmington, DE 19801 and served upon (i) Planet
Hollywood International, Inc., 8669 Commodity Circle, Orlando, FL 32819, Attn:
General Counsel; (ii) Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York,
NY 10038, Attn: Robin E. Keller, Esq. and Young Conaway Stargatt & Taylor, LLP,
Rodney Square North, P.O. Box 391, Wilmington, DE 19801, Attn: James L. Patton,
Jr., Attorneys for the Debtors; (iii) Willkie Farr & Gallagher, 787 Seventh
Avenue, New York, NY 10019, Attn: Steven Wilamowsky, Esq., counsel for the
Creditors' Committee, and (iv) the Office of the United States Trustee, 601
Walnut Street, Curtis Center, Suite 950 West, Philadelphia, PA 19106, Attn:
Frank Perch, Esq. (collectively, the "Notice Parties"), SO AS TO BE, RECEIVED NO
LATER THAN 4:00 P.M. EASTERN TIME ON JANUARY 14,2000.
PLEASE TAKE FURTHER NOTICE that any Confirmation Objection not filed and
served as set forth in the preceding paragraph shall be deemed waived and shall
not be considered by the Court.
PLEASE TAKE FURTHER NOTICE THAT A HEARING TO CONSIDER CONFIRMATION OF THE
PLAN, AND ANY OBJECTIONS THERETO (THE "CONFIRMATION HEARING") WILL BE HELD
BEFORE THE HONORABLE JOSEPH J. FARNAN, JR., UNITED STATES DISTRICT COURT JUDGE,
at the United States District Court for the District of Delaware, J. Caleb
Boggs Federal Building, 844 King Street, Room 2313, Wilmington, DE 19801 on
JANUARY 20, 2000 AT 2:00 P.M. The Confirmation Hearing may be adjourned from
time to time without notice other than an announcement made in open court.
PLEASE TAKE FURTHER NOTICE THAT THE COURT HAS ESTABLISHED THAT DATE WHICH
IS FIFTEEN (15) DAYS AFTER THE CONFIRMATION HEARING (THE "ADMINISTRATIVE CLAIMS
BAR DATE") AS A BAR DATE BY WHICH ANY PERSON OR ENTITY, INCLUDING, WITHOUT
LIMITATION, ANY INDIVIDUAL, PARTNERSHIP, CORPORATION, ESTATE, TRUST OR
GOVERNMENTAL UNIT SEEKING ALLOWANCE OF AN ADMINISTRATIVE CLAIM AGAINST THE
DEBTORS MUST FILE A MOTION WITH THE CLERK OF THE COURT, 824 MARKET STREET, 5th
FLOOR, WILMINGTON, DELAWARE, 19801, TOGETHER WITH PROOF OF SERVICE, AND SERVE
SUCH MOTION ON THE NOTICE PARTIES, SO AS TO BE RECEIVED ON OR BEFORE 4:00 P.M.
EASTERN TIME ON THE ADMINISTRATIVE CLAIMS BAR DATE; PROVIDED, HOWEVER, THAT
PERSONS OR ENTITIES IN ONE OF THE FOLLOWING CATEGORIES NEED NOT FILE A MOTION:
(A) Administrative Claims of Professionals for fees and expenses and of
Professionals or any other entity for making a substantial
contribution in these Chapter 11 Cases pursuant to Sections 330(a)
and 503(b) of the Bankruptcy Code;
(B) U.S. Trustee's Fee Claims;
(C) Indemnification Claims of officers, directors, employees and agents of
the Debtors, or the Old Indenture Trustee;
(D) Administrative Reclamation Claims;
(E) Claims, liabilities or obligations incurred in the ordinary course of
each Debtor's business post-petition (including, but not limited to,
Post-Petition Trade Claims);
(F) any Holder of a Claim of a governmental unit (as defined in Section
101 (27) of the Bankruptcy Code; and
(F) any Claims held by any other party as to which an order of the
Court has been entered approving a later bar date for filing
Administrative Claims against the Debtors.
PLEASE TAKE FURTHER NOTICE that any person or entity that is required to,
but fails to file and serve an Administrative Claims motion in accordance with
the Confirmation Procedures Order on or before the Administrative Claims Bar
Date will be forever barred, estopped and enjoined from asserting an
Administrative Claim against the Debtors or their property.
PLEASE TAKE FURTHER NOTICE that copies of the Plan and Disclosure
Statement may be reviewed at the Office of the Clerk of the Bankruptcy Court,
5th Floor, Marine Midland Plaza, 824 Market Street, Wilmington, DE 19801 between
the hours of 8:00 a.m.-4:00 p.m., Monday through Friday of each week (except for
holidays). Holders of Claims against and Interests in the Debtors may obtain a
copy of the Plan and Disclosure Statement without cost to them by sending a
written request therefor to Debtors' counsel, Stroock & Stroock & Lavan LLP, 180
Maiden Lane, New York, NY 10038, Attn: Rose Serrette.
Dated: Wilmington, Delaware
December 14, 1999
BY ORDER OF THE DISTRICT COURT
\S\ JOSEPH J. FARNAN, JR.
--------------------------------------
THE HONORABLE JOSEPH J. FARNAN, JR.
Exhibit T3F
CROSS-REFERENCE TABLE
TIA Indenture
SECTION SECTION
310 (a)(1).......................................................... 7.10
(a)(2).......................................................... 7.10
(a)(3).......................................................... N.A.
(a)(4).......................................................... N.A.
(b)......................................................... 7.8;7.10
(c)............................................................. N.A.
311 (a)............................................................. 7.11
(b)............................................................. 7.11
(c)............................................................. N.A.
312 (a)............................................................. 2.5
(b)............................................................. 12.3
(c)............................................................. 12.3
313 (a)............................................................. 7.6
(b)(1).......................................................... N.A.
(b)(2).......................................................... 7.6
(c)............................................................. 7.6
(d)............................................................. 7.6
314 (a)............................................................. 12.2
(b)............................................................. 10.2
10.4
(c)(1).......................................................... 12.4
(c)(2).......................................................... 12.4
(c)(3).......................................................... N.A.
(d)............................................................. 10.2
(e)............................................................. 12.5
315 (a)............................................................. 7.1
(b)............................................................. 7.5;12.2
(c)............................................................. 7.1
(d)............................................................. 7.1;7.2
(e)............................................................. 6.11
316 (a)(last sentence).............................................. 12.6
(a)(1)(A)....................................................... 6.5
(a)(1)(B)....................................................... 6.4
(a)(2).......................................................... N.A.
(b)............................................................. 6.7
317 (a)(1).......................................................... 6.8
(a)(2).......................................................... 6.9
(b)............................................................. 2.4
318 (a)............................................................. 12.1
N.A. means Not Applicable.
- ------------------
Note: This Cross-Reference Table shall not, for any purpose be deemed to be
part of this Indenture.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM T-1
----------
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE
TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
/ / CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
UNITED STATES TRUST COMPANY OF NEW YORK
------------------------------------------------------------
(Exact name of trustee as specified in its charter)
New York 13-3818954
------------------------------- -----------------------------------
(State of incorporation if not (I.R.S. Employer Identification No.)
a national bank)
114 West 47th Street 10036-1532
New York, New York
------------------------------------------- -----------------
(Address of principal executive offices) (Zip Code)
NONE
(Name, address and telephone number of agent for service)
PLANET HOLLYWOOD INTERNATIONAL, INC.
------------------------------------
(Exact name of obligor as specified in its charter)
Delaware 59-3283783
------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8669 Commodity Circle, Orlando, FL 32819
------------------------------------------ --------------
(Address of principal executive offices) (Zip Code)
10% Secured Deferrable Interest Notes due 2005
-----------------------------------------------------
(Title of the indenture securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject,
Federal Reserve Bank of New York (2nd District), New York,
New York (Board of Governors of the Federal Reserve System)
Federal Deposit Insurance Corporation, Washington, D.C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers:
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with obligor and underwriter.
If the obligor or any underwriter for the obligor is an affiliate
of the trustee, describe each such affiliation.
None.
Item 3. Voting securities of trustee.
As of January 25, 2000, the trustee had 2,999,020 shares of
Common Stock outstanding, all of which are owned by its parent
company, U.S. Trust Corporation.
Item 4. Trusteeships under other indentures.
The trustee is trustee under an Indenture dated as of March 25,
1998 between Planet Hollywood International, Inc. and United
States Trust Company of New York, pursuant to which 12% Senior
Subordinated Notes due 2005 have been issued in the amount of
$250,000,000.
Item 5. Interlocking directorates and similar relationships with the
obligor or underwriters.
None.
Item 6. Voting Securities of the trustee owned by the obligor or its
officials.
None.
Item 7. Voting securities of the trustee owned by underwriters or their
officials.
None.
Item 8. Securities of the obligor owned or held by the trustee.
None.
Item 9. Securities of underwriters owned or held by the trustee.
None.
Item 10. Ownership or holdings by the trustee of voting
securities of certain affiliates or security holders of the
obligor.
None.
Item 11. Ownership or holdings by the trustee of any securities
of a person owing 50 percent or more of the voting securities of
the obligor.
None.
Item 12. Indebtedness of the Obligor to the trustee.
None.
Item 13. Defaults by the Obligor.
There has been a default under the Indenture dated as of March
25, 1998 (the "Indenture") between Planet Hollywood
International, Inc. and United States Trust Company of New York
affecting the 12% Senior Subordinated Notes due 2005 (the "Senior
Notes") issued under the Indenture. Planet Hollywood filed a
petition for relief under Chapter 11 of Title 11 of the United
States Code with the United States Bankruptcy Court for the
District of Delaware on October 12, 1999 (IN RE PLANET HOLLYWOOD
INTERNATIONAL, INC., ET AL., Case No. 99-3612 (JJF)), which
filing constituted an Event of Default under Section 6.01(g)(i)
of the Indenture. Planet Hollywood also failed to make payments
of the installments of interest due on the Senior Notes on April
1, 1999 and on October 1, 1999, which were not cured within 30
days, both of which also constituted Events of Default under
6.01(a) of the Indenture. The Senior Notes have been discharged
under the Order confirming the First Amended Joint Plan of
Reorganization, dated January 21, 2000.
Item 14. Affiliations with the Underwriters.
None.
Item 15. Foreign trustee.
None.
Item 16. List of exhibits.
T-1.1 Organization Certificate, as amended, issued by the State of
New York Banking Department to transact business as a Trust
Company, is incorporated by reference to Exhibit T-1.1 to
Form T-1 filed on September 15, 1995 with the Commission
pursuant to the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990 (Registration No.
33-97056).
T-1.2 Included in Exhibit T-1.1.
T-1.3 Included in Exhibit T-1.1.
T-1.4 The By-laws of the United States Trust Company of New York,
as amended, is incorporated by reference to Exhibit T-1.4 to
Form T-1 filed on September 15, 1995 with the Commission
pursuant to the Trust Indenture Act of 1939, as amended by
the Trust Indenture Reform Act of 1990 (Registration No.
33-97056).
T-1.6 The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990.
T-1.7 A copy of the latest reports of condition of the trustee
pursuant to law or the requirements of its supervising or
examining authority.
NOTES
In answering Items 2, 5, 7, 9 and 11 in this statement of eligibility as to
matters peculiarly within the knowledge of the obligor or its directors, the
trustee has relied upon information furnished to it by the obligor and will rely
on information to be furnished by the obligor and the trustee disclaims
responsibility for the accuracy or completeness of such information.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, United States Trust Company of New York, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of New York, and State of New York,
on the __th day of February, 2000.
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By: /s/ Gerard F. Ganey
----------------------
Name: Gerard F. Ganey
Title: Senior Vice President
<PAGE>
EXHIBIT T-1.6
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
September 1, 1995
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, ;and subject to the
limitations set forth therein, United States Trust Company of New York ("U.S.
Trust") hereby consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
By:
---------------------------------
/S/Gerard F. Ganey
Senior Vice President
<PAGE>
EXHIBIT T-1.7
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
SEPTEMBER 30, 1999
($ IN THOUSANDS)
ASSETS
Cash and Due from Banks $ 193,238
Short-Term Investments 57,951
Securities, Available for Sale 489,135
Loans 2,423,223
Less: Allowance for Credit Losses 17,792
------
New Loans 2,405,481
Premises and Equipment 56,406
Other Assets 123,784
-------
TOTAL ASSETS $3,325,943
==========
LIABILITIES
Deposits:
Non-Interest Bearing $ 779,713
Interest Bearing 1,978,842
---------
Total Deposits 2,753,555
Short-Term Credit Facilities 238,736
Accounts Payable and Accrued Liabilities 142,477
-------
TOTAL LIABILITIES $3,134,768
==========
STOCKHOLDER'S EQUITY
Common Stock 14,995
Capital Surplus 53,041
Retained Earnings 124,916
Unrealized Loss on Securities
Available for Sale (Net of Taxes) (1,777)
------
TOTAL STOCKHOLDER'S EQUITY 191,175
-------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $3,325,943
==========
I, Richard E. Brinkman, Managing Director & Comptroller of the named bank
do hereby declare that this Statement of Condition has been prepared in
conformance with the instructions issued by the appropriate regulatory
authority and is true to the best of my knowledge and belief.
Richard E. Brinkman, Managing Director & Comptroller
January 25, 2000
