As filed with the Securities and Exchange Commission on March 27, 1998
Registration No. 333-4877
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
POST-EFFECTIVE AMENDMENT NO. 4
TO
FORM S-4
ON
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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AMF Bowling Worldwide, Inc.*
(Exact name of registrant as specified in its charter)
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Delaware 7933,3349 13-3873268
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(State of other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) indentification number)
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8100 AMF Drive
Richmond, Virginia 23111
(804) 730-4000
(Address, including zip code, and telephone number,
Including area code, of registrant's principal executive offices)
Douglas J. Stanard
President and Chief Executive Officer
AMF Bowling Worldwide, Inc.
8100 AMF Drive
Richmond, Virginia 23111
(804) 730-4000
(Name, address, including zip code, and telephone number,
Including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
If any of the Securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRATION
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
This registration statement contains a combined prospectus in accordance
with Rule 429 under the Securities Act of 1933 which relates to this
registration statement and the registrant's registration statement on Form S-4
(Commission File No. 333-4877).
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*TABLE OF ADDITIONAL REGISTRANTS
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Primary
State or Other Standard
Jurisdiction of Industry
Name, Address, and Incorporation Classification
Telephone Number or Organization Number
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<S> <C>
AMF Group Holdings Inc. ................................ Delaware 6719
AMF Bowling Holdings Inc. .............................. Delaware 6719
AMF Bowling Centers Holdings Inc. ...................... Delaware 6719
AMF Bowling Products, Inc. ............................. Virginia 3949
AMF Worldwide Bowling Centers Holdings Inc. ............ Delaware 6719
AMF Bowling Centers, Inc. .............................. Virginia 7933
Bush River Corporation ................................. South Carolina 6719
AMF Beverage Company of Oregon, Inc. ................... Oregon 6719
King Louie Lenexa, Inc. ................................ Kansas 6719
AMF Beverage Company of W. Va., Inc. ................... West Virginia 6719
AMF Bowling Centers Switzerland Inc. ................... Delaware 7933
AMF Bowling Centers (Aust) International Inc. .......... Virginia 7933
AMF Bowling Centers (Canada) International Inc. ........ Virginia 7933
AMF Bowling Centers (Hong Kong) International Inc. ..... Virginia 7933
AMF Bowling Centers International Inc. ................. Virginia 7933
AMF BCO-UK One, Inc. ................................... Virginia 6719
AMF BCO-UK Two, Inc. ................................... Virginia 6719
AMF BCO-France One, Inc. ............................... Virginia 6719
AMF BCO-France Two, Inc. ............................... Virginia 6719
AMF Bowling Centers Spain Inc. ......................... Delaware 7933
AMF Bowling Mexico Holding, Inc. ....................... Delaware 6719
Boliches AMF, Inc. ..................................... Virginia 6719
AMF BCO-China, Inc. .................................... Virginia 6719
AMF Bowling Centers China, Inc. ........................ Virginia 6719
American Recreation Centers, Inc. ...................... California 6719
Burleigh Recreation, Inc. .............................. Wisconsin 6719
300, Inc. .............................................. Texas 6719
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The address of these additional registrants is 8100 AMF Drive, Richmond,
Virginia 23111. Their telephone number is (804) 730-4000.
<PAGE>
EXPLANATORY NOTE
This registration statement was originally filed on Form S-4 for purposes
of conducting an exchange offer, as more fully described in the form of
Prospectus filed by AMF Group Inc. and the additional registrants listed
therein with the Securities and Exchange Commission on May 31, 1996. The
Company amended this registration statement, pursuant to Post-Effective
Amendment No. 1 on April 29, 1997, Post-Effective Amendment No. 2 on June 17,
1997, and Post-Effective Amendment No. 3 on June 26, 1997, in connection with
the market-making transactions described below. The Company hereby further
amends this registration statement, pursuant to this Post-Effective Amendment
No. 4 on Form S-3, in connection with such market-making transactions.
This registration statement includes a prospectus relating to an
indeterminate principal amount of the Company's 10- 7/8% Senior Subordinated
Notes Due 2006 and an indeterminate principal amount of the Company's 12- 1/4%
Senior Subordinated Discount Notes due 2006, which may be sold by Goldman,
Sachs & Co. in connection with market-making transactions. See "Plan of
Distribution."
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[AMF LOGO]
AMF Bowling Worldwide, Inc.
10- 7/8% Senior Subordinated Notes Due 2006
and 12- 1/4% Senior Subordinated Discount Notes Due 2006
(guaranteed by certain affiliated companies as described herein)
---------------
The 10 7/8% Series B Senior Subordinated Notes Due 2006 (the "Senior
Subordinated Notes") and the 12- 1/4% Series B Senior Subordinated Discount
Notes Due 2006 (the "Senior Subordinated Discount Notes" and, collectively with
the Senior Subordinated Notes, the "Notes") were issued by AMF Bowling
Worldwide, Inc. (the "Company" or "Bowling Worldwide") a Delaware corporation
formerly named AMF Group Inc. The Notes are fully and unconditionally
guaranteed on a senior subordinated basis, jointly and severally, by AMF Group
Holdings Inc. ("Holdings"), a Delaware corporation of which the Company is a
wholly owned subsidiary, and by the Company's direct and indirect domestic
subsidiaries (collectively, the "Guarantors"). See "Description of Notes."
As of the date of this Prospectus, the Notes are not senior in priority to
any outstanding indebtedness of the Company or its subsidiaries. The Company
has no current plan or intention to incur any indebtedness to which the Notes
would be senior in priority. The Senior Subordinated Notes and the Senior
Subordinated Discount Notes rank pari passu with one another.
The Senior Subordinated Notes and the Senior Subordinated Discount Notes,
are listed under the symbols "AMFG 06" and "AMFG ZR06," respectively, on the
New York Stock Exchange.
The Notes are general, unsecured obligations of the Company, are
subordinated to all Senior Debt of the Company, rank pari passu with all other
senior subordinated debt of the Company and will rank senior in right of
payment to all future subordinated debt, if any, of the Company. The claims of
holders of the Notes are subordinated to the Senior Debt of the Company, which,
as of December 31, 1997, was approximately $621.3 million, $619.3 million of
which consisted of secured borrowings under the Credit Agreement (as
hereinafter defined), and are effectively subordinated to all indebtedness and
other liabilities (including trade payables and capital lease obligations) of
the Company's subsidiaries that are not Guarantors, which as of December 31,
1997, aggregated $11.8 million. The Company's ratio of debt to total
capitalization at December 31, 1997 was approximately 61.9%.
(cover text continued on next page)
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SEE "RISK FACTORS," COMMENCING ON PAGE 9, FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
NOTES.
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THESE SECURITIES HAVE 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 THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
This Prospectus has been prepared for and is to be used by Goldman, Sachs
& Co. in connection with offers and sales in market-making transactions of the
Notes. The Company will not receive any of the proceeds of such sales. Goldman,
Sachs & Co. may act as a principal or agent in such transactions. The Notes may
be offered in negotiated transactions or otherwise.
Goldman, Sachs & Co.
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The date of this Prospectus is March 27, 1998.
<PAGE>
The Senior Subordinated Notes bear interest at a rate equal to 10 7/8% per
annum. Interest on the Senior Subordinated Notes is payable semiannually on
March 15 and September 15 of each year. The Senior Subordinated Discount Notes
will not bear interest until March 15, 2001, and thereafter will bear interest
at a rate equal to 12- 1/4% per annum. Interest on the Senior Subordinated
Discount Notes will be payable semiannually on March 15 and September 15 of
each year commencing September 15, 2001. The Senior Subordinated Discount Notes
were issued with "original issue discount" for federal income tax purposes. See
"Risk Factors -- Original Issue Discount Consequences" and "Description of
Certain Federal Income Tax Consequences."
The Notes are redeemable at the option of the Company, in whole or in
part, at any time on or after March 15, 2001, at the redemption prices set
forth herein, together with accrued and unpaid interest, if any, to the date of
redemption. See "Prospectus Summary -- Summary of Terms of Notes."
Prior to March 15, 1999, up to $100 million in aggregate principal amount
of Senior Subordinated Notes will be redeemable at the option of the Company,
on one or more occasions, from the net proceeds of public or private sales of
common stock of, or contributions to the common equity capital of, the Company,
at a price of 110.875% of the principal amount of the Senior Subordinated
Notes, together with accrued and unpaid interest, if any, to the date of
redemption; provided that at least $150 million in aggregate principal amount
of Senior Subordinated Notes remains outstanding immediately after such
redemption. In addition, prior to March 15, 1999, the Senior Subordinated
Discount Notes will be redeemable at the option of the Company, on one or more
occasions, from the net proceeds of public or private sales of common stock, or
contributions to the common equity capital, of the Company, at a price of
112.250% of the Accreted Value of the Senior Subordinated Discount Notes;
provided that at least $150 million in Accreted Value of Senior Subordinated
Discount Notes remains outstanding immediately after such redemption. The
selection of Notes to be redeemed pursuant to the options described in this
paragraph would be pro rata, by lot or by such method as the applicable Trustee
deems fair and appropriate.
Upon the occurrence of a Change of Control, each holder of Notes
("Holder") may require the Company to repurchase all or a portion of such
Holder's Notes at 101% of the aggregate principal amount of the Senior
Subordinated Notes and 101% of the Accreted Value of the Senior Subordinated
Discount Notes, as applicable, together with accrued and unpaid interest, if
any, to the date of repurchase. There can be no assurance that the Company will
have sufficient funds, or will obtain the requisite consent of Lenders under
the Credit Agreement, to satisfy the Change of Control repurchase requirement
if such requirement arises. See "Risk Factors -- Payment Upon Change of
Control" and "Description of Notes."
AVAILABLE INFORMATION
The Company and the Guarantors have filed with the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-4 under the
Securities Act of 1933, as amended (the "Securities Act") for the registration
of the Notes (together with any supplements, post-effective amendments,
including Post-Effective Amendment No. 4 to Form S-4 on Form S-3, and exhibits
thereto, the "Registration Statement"). This Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of which
have been omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company or the Notes,
reference is hereby made to the Registration Statement. The Registration
Statement, including all exhibits and schedules thereto, may be inspected
without charge at the public reference facilities maintained by the Commission
at the Commission's principal offices at 450 Fifth Street, N.W., Washington,
D.C. 20549, and the Commission's regional offices at 7 World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of the Registration Statement may be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, NW.,
Washington, D.C. 20549 at prescribed rates.
Statements made in this Prospectus concerning the contents of any contract
or other document referred to herein are not necessarily complete, although the
material terms thereof are described in this Prospectus. With respect to each
such document filed with the Commission as an exhibit to the Registration
Statement, reference is made to the exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference.
The Company is subject to the periodic reporting and other information
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 Commission. Such materials filed by the Company can be
inspected and copied at the
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public reference facilities of the Commission and in the manner described
above, as well as on the World Wide Web site maintained by the Commission at
http://www.sec.gov. The materials are also available at the office of The New
York Stock Exchange, Inc.
So long as the Company is subject to the periodic reporting requirements
of the Exchange Act, it is required to furnish the information required to be
filed with the Commission to: (i) IBJ Schroder Bank and Trust Company as
trustee (the "Senior Subordinated Note Trustee"), under the Indenture dated as
of March 21, 1996 (the "Senior Subordinated Note Indenture") among the Company,
the Guarantors and the Senior Subordinated Note Trustee, pursuant to which the
Senior Subordinated Notes were issued; (ii) Firstar Bank of Minnesota, N.A.,
succesor to American Bank, N.A. as trustee (the "Senior Subordinated Discount
Note Trustee" and, collectively with the Senior Subordinated Note Trustee, the
"Trustees"), under the Indenture dated as of March 21, 1996 (the "Senior
Subordinated Discount Note Indenture" and, collectively with the Senior
Subordinated Note Indenture, the "Indentures") among the Company, the
Guarantors and the Senior Subordinated Discount Note Trustee, pursuant to which
the Senior Subordinated Discount Notes were issued and (iii) the Holders. The
Company has agreed that, even if it is not required under the Exchange Act to
furnish such information to the Commission, it nonetheless will continue to
furnish information that would be required to be furnished by the Company by
Section 13 of the Exchange Act to the Trustees and the Holders as if it were
subject to such periodic reporting requirements.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1997 (the "Form 10-K"), which has been filed with the Commission pursuant to
the Exchange Act (File No. 001-12131), is hereby incorporated by reference into
this Prospectus. The information under the heading "Prospectus Summary --
Recent Developments" should be read in conjunction with the Company's financial
statements contained in the Company's Form 10-K.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14,
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the securities offered hereby shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such document. Any statement contained herein
or in a document all or a portion of which is incorporated or deemed
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Bowling Worldwide will provide without charge to each person to whom this
Prospectus has been delivered, upon the written or oral request of any such
person, a copy of the foregoing document incorporated herein by reference (other
than exhibits to such documents which are not specifically incorporated by
reference into the information that this Prospectus incorporates). Written or
telephone requests should be directed to AMF Bowling Worldwide, Inc., attention
Mr. Christopher F. Caesar, 8100 AMF Drive, Richmond, Virginia 23111, telephone
(804) 730-4000.
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements, which are
statements other than historical information or statements of current
condition. Some forward-looking statements may be identified by use of terms
such as "believes," "anticipates," "intends" or "expects." The forward-looking
statements contained in this Prospectus are generally located in the material
set forth under "Prospectus Summary," "Risk Factors" and in documents
incorporated by reference herein, but may be found in other locations as well.
These forward-looking statements relate to the plans and objectives of the
Company for future operations. In light of the risks and uncertainties inherent
in all future projections, the inclusion of forward-looking statements in this
Prospectus should not be regarded as a representation by the Company or any
other person that the objectives or plans of the Company will be achieved. Many
factors could cause the Company's actual results to differ materially from
those in the forward looking statements, including, among other things: (i) the
Company's ability to execute successfully acquisition opportunities and to
integrate acquired operations into its business, (ii) the continued development
and growth of new bowling markets and the Company's ability to continue to
identify those markets and to generate sales of products in those markets
before market saturation, (iii) the risk of adverse political acts or
developments in the
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Company's existing or proposed markets for its products or in which it operates
its bowling centers, (iv) the Company's ability to retain experienced senior
management, (v) the ability of the Company and its subsidiaries to generate
sufficient cash flow in a timely manner to satisfy principal and interest
payments on their indebtedness and (vi) the popularity of bowling as an
activity in the United States and abroad. In addition, actual results may also
differ materially from forward-looking statements in this Prospectus as a
result of factors generally applicable to companies in similar businesses,
including, among other things: (i) a decline in general economic conditions,
(ii) an adverse judgment in pending or future litigation and (iii) increased
competitive pressure from current competitors and future market entrants. The
foregoing review of important factors should not be construed as exhaustive and
should be read in conjunction with other cautionary statements that are
included in the Registration Statement. The Company undertakes no obligation to
release publicly the results of any future revisions it may make to
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the
more detailed information and financial statements incorporated by reference
into this Prospectus. As used in this Prospectus, the "Company" refers to AMF
Bowling Worldwide, Inc. and, unless the context requires otherwise, "AMF"
refers to the Company and its subsidiaries.
The Company
The Company is the largest owner or operator of bowling centers in the
United States and worldwide. In addition, the Company is one of the world's
leading manufacturers of bowling center equipment, accounting for, management
believes, approximately 41% of the world's current installed base of such
equipment. AMF is principally engaged in two business segments: (i) the
ownership or operation of bowling centers, consisting of, as of December 31,
1997, 370 U.S. bowling centers and 100 international bowling centers ("Bowling
Centers"), including 14 centers operated by joint ventures with third parties
described below, and (ii) the manufacture and sale of bowling equipment such as
automatic pinspotters, automatic scoring equipment, bowling pins, lanes, ball
returns, and certain spare and consumable products, and the resale of allied
products such as bowling balls, bags, shoes and certain other spare and
consumable products ("Bowling Products"). The Bowling Products business
consists of two categories: (i) New Center Packages (all of the equipment
necessary to outfit a new bowling center or expand an existing bowling center);
and (ii) Modernization and Consumer Products (which includes modernization
equipment used to upgrade an existing center, spare parts, supplies and
consumable products essential to maintain operations of an existing center).
The Company, Holdings and AMF Bowling, Inc. ("AMF Bowling"), the direct
holder of all the common stock of Holdings and, through Holdings, the indirect
holder of all the Company's common stock, are Delaware corporations which were
incorporated in 1996 by GS Capital Partners II, L.P. (together with affiliated
investment funds, "GSCP") to effect the acquisition of AMF (the "Acquisition").
The Company was initially incorporated under the name "AMF Group Inc." and was
subsequently renamed "AMF Bowling Worldwide, Inc." AMF Bowling and Holdings are
holding companies, and are not expected to hold any material assets other than
the capital stock of Holdings and the Company, respectively.
After the incorporation of AMF Bowling, GSCP sold certain equity interests
in AMF Bowling to investment funds affiliated with The Blackstone Group, Kelso
& Company, Bain Capital Inc. and Citicorp North America, Inc. and to certain
officers and directors of AMF Bowling. Holdings, the direct holder of all of
the outstanding capital stock of the Company, acquired substantially all of the
assets of AMF's predecessor (the "Predecessor Company") on May 1, 1996 pursuant
to the Stock Purchase Agreement, dated February 16, 1996, between Holdings and
the then-current stockholders of the Predecessor Company, as amended (the
"Stock Purchase Agreement"). The purchase price for the Acquisition was
approximately $1.37 billion.
On November 7, 1997, AMF Bowling completed an initial public offering of
its common stock, par value $.01 per share ("AMF Bowling Common Stock"). The
initial public offering was conducted through concurrent offerings in the U.S.
and outside the U.S. (collectively, the "Initial Public Offering"). After
completion of the Initial Public Offering, GSCP and The Goldman Sachs Group,
L.P. ("The Goldman Sachs Group"), which has a 99% interest in Goldman Sachs,
together beneficially own 51.0% of AMF Bowling Common Stock. Richard A.
Friedman and Terence M. O'Toole, each of whom is a Managing Director of Goldman
Sachs, and Peter M. Sacerdote, who is a limited partner of The Goldman Sachs
Group, are directors of the Company, and Mr. Friedman is Chairman of the
Company.
The Company's principal executive offices are located at 8100 AMF Drive,
Richmond, Virginia, 23111, and the telephone number of the Company is (804)
730-4000.
Summary of Terms of Notes
The Company.................... AMF Bowling Worldwide, Inc. (formerly AMF
Group Inc.)
Securities Outstanding......... As of December 31, 1997, $250.0 million
principal amount of 10- 7/8% Series B Senior
Subordinated Notes Due 2006 (the "Senior
Subordinated Notes") and $189.3 million
Accreted Value of 12- 1/4% Series B Senior
Subordinated Discount Notes Due 2006
(increasing to full accreted value of $277.0
million on
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March 15, 2001) (the "Senior Subordinated
Discount Notes" and, collectively with the
Senior Subordinated Notes, the "Notes").
Interest Payment Dates......... Interest on the Senior Subordinated Notes
accrues at a rate of 10- 7/8% and is payable
in cash semi-annually in arrears on each
March 15 and September 15.
The Senior Subordinated Discount Notes were
originally sold at a substantial discount
to their face amount. See "Description of
Certain Federal Income Tax Consequences."
No interest will accrue on the Senior
Subordinated Discount Notes prior to March
15, 2001 (the "Full Accretion Date").
Thereafter, interest will accrue and will
be payable in cash semi-annually in arrears
on each March 15 and September 15,
commencing September 15, 2001. The
effective yield of the Senior Subordinated
Discount Notes will be 12- 1/4% per annum,
computed on a semi-annual bond equivalent
basis.
For the year ended December 31, 1997,
Holdings had a deficiency of earnings to
fixed charges of $43.7 million. Although
the Company believes it will be able to
meet its obligations under the Notes, there
is no assurance that there will be adequate
cash available to make interest payments
under the Notes when they become due.
Maturity Date.................. March 15, 2006.
Optional Redemption............ The Notes will be redeemable, at the
option of the Company, on one or more
occasions, at any time on or after March 15,
2001, at the redemption prices set forth
therein, together with accrued and unpaid
interest, if any, to the redemption date.
Prior to March 15, 1999, up to $100 million
in aggregate principal amount of Senior
Subordinated Notes will be redeemable at the
option of the Company, on one or more
occasions, from the net proceeds of public or
private sales of common stock of, or
contributions to the common equity capital
of, the Company, at a price of 110.875% of
the principal amount of the Senior
Subordinated Notes, together with accrued and
unpaid interest, if any, to the date of
redemption; provided that at least $150
million in aggregate principal amount of
Senior Subordinated Notes remains outstanding
immediately after such redemption. In
addition, prior to March 15, 1999, the Senior
Subordinated Discount Notes are redeemable at
the option of the Company, on one or more
occasions, from the net proceeds of public or
private sales of common stock of, or
contributions to the common equity capital
of, the Company, at a price of 112.250% of
the Accreted Value of the Senior Subordinated
Discount Notes; provided that at least $150
million in Accreted Value of Senior
Subordinated Discount Notes remains
outstanding immediately after such
redemption.
Change of Control Put.......... In the event of a Change of Control, each
Holder may require the Company to repurchase
all or a portion of the Holder's Notes at
101% of the aggregate principal amount of the
Senior Subordinated Notes and 101% of the
Accreted Value of the Senior Subordinated
Discount Notes (or, following the Full
Accretion Date, 101% of the principal amount
thereof), as applicable, together with
accrued and unpaid interest, if any, and
Liquidated Damages (as defined below), if
any, to the date of
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repurchase. There can be no assurance that
the Company will have sufficient funds, or
will obtain the requisite consent of the
Lenders required under the indentures for
the Notes and the Credit Agreement, to
satisfy the Change of Control repurchase
requirement if such requirement arises. See
"Description of Notes."
Mandatory Sinking Fund......... None.
Guarantees..................... The Company's payment obligations under
the Notes are jointly and severally
guaranteed on a senior subordinated basis
(the "Senior Subordinated Guarantees") by
Holdings, by each of the Company's First-Tier
Subsidiaries (as defined below) and
Second-Tier Subsidiaries (as defined below)
and by any other Subsidiaries (as defined
below) of the Company that act as guarantors
under the Credit Agreement (collectively, the
"Guarantors"). The Senior Subordinated
Guarantees are subordinated to the guarantees
issued by the Guarantors under the Credit
Agreement. See "Description of Notes --
Senior Subordinated Guarantees."
Ranking........................ The Notes are general, unsecured
obligations of the Company, are subordinated
in right of payment to all Senior Debt (as
defined below) of the Company, rank pari
passu with all other senior subordinated debt
of the Company and will rank senior in right
of payment to all future subordinated debt,
if any, of the Company. The claims of the
Holders (as defined below) of the Notes are
subordinated to the Senior Debt, which, as of
December 31, 1997, was approximately $621.3
million, $619.3 million of which consisted of
fully secured borrowings under the Credit
Agreement. In addition, the Notes are
effectively subordinated to all indebtedness
and other liabilities (including trade
payables and capital lease obligations) of
the Company's subsidiaries that are not
Guarantors and through which the Company will
conduct a portion of its operations. See
"Description of Notes -- Subordination."
The Notes are not senior in priority to any
outstanding indebtedness of the Company or
its subsidiaries. The Company has no
current plan or intention to incur any
indebtedness to which the Notes would be
senior in priority. The Senior Subordinated
Notes and the Senior Subordinated Discount
Notes rank pari passu with each other.
Form and Denomination.......... The Notes are in fully registered form, in
minimum denominations of $1,000 and integral
multiples thereof. The Notes were initially
issued in the form of one or more global
notes and deposited with a custodian for and
registered in the name of a nominee of The
Depository Trust Company. Notes will not be
issued in certificated, fully registered
form, except in the circumstances provided
for in the Indentures. See "Description of
Notes -- Book-Entry, Delivery and Form."
Certain Covenants.............. The Indentures contain certain covenants
that, among other things, limit the ability
of the Company and its Restricted
Subsidiaries (as defined below) to incur
additional indebtedness and issue
Disqualified Stock (as defined below), pay
dividends or distributions or make
investments or make certain
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other Restricted Payments (as defined
below), enter into certain transactions
with affiliates, dispose of certain assets,
incur liens securing pari passu and
subordinated indebtedness of the Company
and engage in mergers and consolidations.
See "Description of Notes -- Certain
Covenants."
Original Issue Discount........ For federal income tax purposes, each
Senior Subordinated Discount Note is
considered to have been issued with "original
issue discount" equal to the difference
between the issue price of the 12- 1/4%
Senior Subordinated Discount Note due 2006
for which it was exchanged and the sum of all
cash payments (whether denominated as
principal or interest) to be made on such
Senior Subordinated Discount Note. Each
Holder of a Senior Subordinated Discount Note
must include in gross income for federal
income tax purposes the sum of the daily
portions of such original issue discount for
each day during each taxable year in which
the Senior Subordinated Discount Note is
held, even though no interest payments will
be received prior to September 15, 2001.
Further, a Note acquired in a subsequent
resale may be considered to have been
purchased with market discount or acquisition
premium. See "Description of Certain Federal
Income Tax Consequences."
8
<PAGE>
RISK FACTORS
Substantial Leverage; Ability to Service Indebtedness
The Company is, and will continue to be, highly leveraged as a result of
the substantial indebtedness that it incurred in connection with the
Acquisition and intends to incur to finance acquisitions and expand its
operations. As of December 31, 1997, the Company had total indebtedness of
$1,060.6 million and stockholder's equity of $653.9 million, resulting in a
ratio of debt to total capitalization of approximately 61.9%. The Company had
deficiencies of earnings to fixed charges of $43.7 million and $30.6 million
for the year ended December 31, 1997, and the year ended December 31, 1996, on
a pro forma basis, respectively. Although the Company believes it will be able
to meet its debt obligations, there is no assurance that there will be adequate
cash available to make interest payments under the Company's indebtedness when
they become due. Interest expense for the year ended December 31, 1997 and for
the year ended December 31, 1996 was $118.4 million and $78.0 million,
respectively, of which $83.0 million and $53.0 million, respectively, was cash
interest expense. The Company intends to incur additional indebtedness in the
future, subject to limitations imposed by the Indentures and the Credit
Agreement. The Company repaid certain indebtedness with the proceeds of the
Initial Public Offering as described below. However, it intends to incur
additional indebtedness to finance acquisitions and expand its operations, and
therefore remains highly leveraged after giving effect to the Initial Public
Offering. The Credit Agreement requires the maintenance of certain financial
ratios and imposes certain operating and financial restrictions on the Company
which restrict, among other things, the Company's ability to declare dividends,
redeem stock, incur indebtedness, incur obligations under leases, create liens,
consummate mergers, sell assets, and make capital expenditures, investments and
acquisitions.
The Company's ability to make scheduled payments of principal of, or to
pay interest on, or to refinance its indebtedness (including the Notes) depends
on its future performance, which, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory and other factors
beyond its control. Based upon the current level of operations and anticipated
growth, management of the Company believes that available cash flow, together
with available borrowings under the Credit Agreement and other sources of
liquidity, will be adequate to meet the Company's anticipated future
requirements for working capital, capital expenditures and scheduled payments
of principal of and interest on its Senior Debt, and interest on the Notes.
There can be no assurance that the Company's business will generate sufficient
cash flow from operations or that future borrowings will be available in an
amount sufficient to enable the Company to service its indebtedness, including
the Notes, or make necessary capital expenditures, or that any refinancing
would be available on commercially reasonable terms or at all.
The degree to which the Company is now leveraged could have important
consequences to Holders, including, but not limited to, the following: (i) a
substantial portion of the Company's cash flow from operations will be required
to be dedicated to debt service and will not be available for other purposes;
(ii) the Company's ability to obtain additional financing in the future could
be limited; (iii) certain of the Company's borrowings are at variable rates of
interest, which could result in higher interest expense in the event of
increases in interest rates; and (iv) the Indentures and the Credit Agreement
contain financial and restrictive covenants that limit the ability of the
Company to, among other things, borrow additional funds, dispose of assets or
pay cash dividends. Failure by the Company to comply with such covenants could
result in an event of default which, if not cured or waived, could have a
material adverse effect on the Company. In addition, the degree to which the
Company is leveraged could prevent it from repurchasing all Notes tendered to
it upon the occurrence of a Change of Control. See "Description of Notes."
A principal component of the Company's strategy for future growth is the
acquisition of additional bowling centers, which the Company expects to finance
with the Bank Facility (as defined below) under the Credit Agreement and cash
generated by operations. Pursuant to an amendment and restatement of the Credit
Agreement effective November 7, 1997, an acquisition facility that existed
under the Credit Agreement prior to its amendment and restatement and a portion
of the Term Facilities which existed under the Credit Agreement, as previously
in effect, were converted into a non-amortizing revolving working capital
facility (the "Bank Facility") the aggregate size of which is $355.0 million,
and a portion of such revolving credit indebtedness was repaid with proceeds of
the Initial Public Offering. As of December 31, 1997, $181.9 million was
available under the Bank Facility.
Actual borrowing under the Credit Agreement must meet certain financial
tests under the Credit Agreement and the Indentures. The Company's leverage may
adversely affect its ability to meet these tests, and, as a result,
9
<PAGE>
to obtain such financing. See " -- Ability to Implement Growth Strategies" and
"Description of Notes -- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Disqualified Stock."
Net Losses
Holdings, which is a holding company for the Company, recorded a net loss
of $21.6 million, on a pro forma basis, in 1996 and a net loss of $32.2 million
before extraordinary items in 1997. Holdings incurred after-tax extraordinary
charges totaling $23.4 million in the fourth quarter of 1997 arising from the
amendment and restatement of the Credit Agreement that became effective on
November 7, 1997, the premium paid to redeem a portion of the Senior
Subordinated Discount Notes with the proceeds of the Initial Public Offering
and the write-off of the portion of deferred financing costs attributable to
the Senior Subordinated Discount Notes redeemed. There can be no assurance that
the Company will not continue to generate net losses.
Subordination; Asset Encumbrances
The Notes are subordinated in right of payment to all existing and future
Senior Debt, including the principal of (and premium, if any) and interest on
and all other amounts due on or payable in connection with Senior Debt. At
December 31, 1997, there was outstanding approximately $621.3 million of Senior
Debt, $619.3 million of which was fully secured borrowings under the Credit
Agreement. In addition, the Notes are effectively subordinated to all
indebtedness and other liabilities (including trade payables and capital lease
obligations) of the Company's subsidiaries that are not Guarantors, which as of
December 31, 1997, aggregated $11.8 million. By reason of such subordination,
in the event of the insolvency, liquidation, reorganization, dissolution or
other winding-up of the Company or upon a default in payment with respect to,
or the acceleration of, any Senior Debt, the holders of such Senior Debt and
any other creditors who are holders of Senior Debt and creditors of
subsidiaries that are not Guarantors must be paid in full before the Holders
may be paid. If the Company incurs any additional pari passu debt, the holders
of such debt would be entitled to share ratably with the Holders in any
proceeds distributed in connection with any insolvency, liquidation,
reorganization, dissolution or other winding-up of the Company. This may have
the effect of reducing the amount of proceeds paid to Holders. In addition, no
payments may be made with respect to the principal of (and premium, if any) or
interest or Liquidated Damages, if any, on the Notes if a payment default
exists with respect to Senior Debt and, under certain circumstances, no
payments may be made with respect to the principal of (and premium, if any) or
interest or Liquidated Damages, if any, on the Notes for a period of up to 179
days if a non-payment default exists with respect to Senior Debt. In addition,
the Indentures permit subsidiaries of the Company to incur debt provided
certain conditions are met. Any debt incurred by a subsidiary of the Company
that is not a Guarantor will be structurally senior to the Notes. See
"Description of Notes."
Holdings and the Company have granted to the Lenders under the Credit
Agreement security interests in all of the capital stock of the Company and
substantially all of the current and future assets of the Company, including a
pledge of all of the issued and outstanding shares of capital stock of certain
of the Company's subsidiaries. In addition, the Guarantors have granted to such
Lenders security interests in all of the current and future assets of the
Guarantors (other than 35% of the outstanding capital stock of any foreign
subsidiary of any Guarantor). In the event of a default on secured
indebtedness, including the guarantees with respect to the Credit Agreement
(whether as a result of the failure to comply with a payment or other covenant,
a cross-default, or otherwise), the parties granted such security interests
will have a prior secured claim on the capital stock of the Company and the
assets of the Company and the Guarantors. If such parties should attempt to
foreclose on their collateral, the Company's financial condition and the value
of the Notes will be materially adversely affected. In the event of a
foreclosure on the collateral consisting of the Company's stock, unless the
purchaser of such stock were an affiliate of Goldman Sachs, a Change of Control
would occur, with the consequences set forth below under " -- Payment Upon
Change of Control."
Holding Company Structure
The Company conducts all of its business through subsidiaries and has no
operations of its own. The Company is dependent on the cash flow of its
subsidiaries and distributions of such cash flow from its subsidiaries to the
Company in order to meet its debt service obligations. The subsidiaries are
separate and distinct legal entities and have no obligation, contingent or
otherwise, to make funds available to the Company, whether in the form of
loans, dividends or otherwise. It is not expected that Holdings will have any
assets other than the common stock of the Company.
10
<PAGE>
As a result of the holding company structure of the Company, the Holders
are structurally junior to all creditors of the subsidiaries that are not
Guarantors, except to the extent that the Company or a Guarantor is itself
recognized as a creditor of such subsidiary, in which case the claims of the
Company or such Guarantor would still be subordinate to any security in the
assets of such subsidiary and any indebtedness of such subsidiary senior to
that held by the Company or a Guarantor. See " -- Subordination; Asset
Encumbrances" above. In the event of the insolvency, liquidation,
reorganization, dissolution or other winding-up of the subsidiaries that are
not Guarantors, the Company will not receive funds available to pay to the
Holders in respect of the Notes until after the payment in full of the claims
of the creditors of the subsidiaries. As of December 31, 1997 and December 31,
1996, the aggregate amount of indebtedness and other obligations of the
subsidiaries that are not Guarantors (including trade payables and capital
lease obligations) was approximately $11.8 million and $6.9 million,
respectively. See Note 20 to the Consolidated Financial Statements of Holdings
for the year ended December 31, 1997, incorporated by reference herein.
Dependence on Key Personnel
The Company's business is managed by certain key executive officers. The
loss of the services of certain of these executives could have a material
adverse impact on AMF. There can be no assurance that the services of such
personnel will continue to be made available to the Company. The Company does
not maintain key-person insurance with respect to its executive officers.
Control By GSCP
After completion of the Initial Public Offering, GSCP and The Goldman
Sachs Group, which has a 99% interest in Goldman Sachs, together beneficially
own 51.0% of AMF Bowling Common Stock. Richard A. Friedman and Terence M.
O'Toole, each of whom is a Managing Director of Goldman Sachs, and Peter M.
Sacerdote, who is a limited partner of The Goldman Sachs Group, are directors
of the Company. Messrs. Friedman, O'Toole and Sacerdote are also directors of
AMF Bowling, and Mr. Friedman is Chairman of AMF Bowling.
On April 30, 1996, the Company, GSCP, the Blackstone Group, Kelso &
Company, Bain Capital, Inc., Citicorp North America, Inc., Charles M. Diker,
Robert L. Morin and Douglas J. Stanard entered into a Stockholders Agreement,
which regulates the relationship among the Company and certain of its
stockholders (the "Stockholders Agreement"). As a result of its ownership of a
majority of the outstanding Common Stock and the terms of the Stockholders
Agreement, GSCP controls Holdings and the Company and has the ability to
control the election of a majority of the Board of Directors of AMF Bowling and
all the directors of Holdings and the Company, appoint new management and
approve or block any action requiring the approval of AMF Bowling's, Holdings'
or the Company's stockholders, including adoption of amendments to the
Company's Certificate of Incorporation and approval of mergers or sales of
substantially all of the Company's assets, in each case subject to the
restrictions contained in the Stockholders Agreement. The Stockholders
Agreement also provides for three of the investment funds which are
stockholders of AMF Bowling each to nominate a director of AMF Bowling, subject
to GSCP's consent, and for the formation of the Executive Committee of AMF
Bowling's Board of Directors, which consists of two directors nominated by GSCP
and the President and Chief Executive Officer. There can be no assurance that
the interests of GSCP will not conflict with the interests of the Holders.
Payment Upon Change of Control
Upon the occurrence of a Change of Control, each Holder may require the
Company to repurchase all or a portion of such Holder's Notes at 101% of the
principal amount of the Senior Subordinated Notes and 101% of the Accreted
Value of the Senior Subordinated Discount Notes (or, following the Full
Accretion Date, 101% of the principal amount thereof), as applicable, together
with accrued and unpaid interest, if any, and Liquidated Damages, if any, to
the date of repurchase. The Indentures require that prior to such a repurchase,
the Company must either repay all outstanding indebtedness under the Credit
Agreement or obtain any required consent of the Lenders to such repurchase. If
a Change of Control were to occur, the Company may not have the financial
resources to repay all of its obligations under the Credit Agreement, the
Indentures and the other indebtedness that would become payable upon the
occurrence of such Change of Control. See "Description of Notes -- Repurchase
at the Option of Holders."
11
<PAGE>
Bowling Industry Characteristics
Bowling Centers
In the United States, the operation of bowling centers generally has been
characterized by slightly declining lineage (number of games bowled per lane
per day), offset by increasing average price per game. Total lineage, according
to an industry source, has declined despite an average annual increase in the
total number of people bowling since 1987. This trend is largely a result of a
decline in league participation, partially offset by an increase in
recreational (i.e., non-league) play, resulting in more people bowling, but
bowling less frequently. Bowling center operators have offset the decrease in
overall lineage by increasing prices and creating additional sources of income.
Contrary to the overall lineage trend in the industry, AMF's U.S. lineage has
remained relatively stable over recent years due to its ability to retain
existing league bowlers and attract new recreational bowlers due to, management
believes, the generally higher quality of AMF's centers. Internationally,
although trends vary by country, certain of the markets in which AMF operates
have experienced increasing competition as they have matured, resulting in
declining lineage. AMF has offset these lineage declines through higher prices
and additional focus on food and beverage and other amusement revenue. There
can be no assurance that AMF will be able to continue to maintain lineage or
increase prices in the U.S. or internationally in the future.
In addition, bowling, both as a competitive sport and a recreational
activity, faces competition from numerous alternative activities. The continued
success of AMF's bowling operations is subject to consumers' continued interest
in bowling, the availability and cost of other sport, recreational and
entertainment alternatives and the amount of leisure time, as well as various
other social and economic factors over which AMF has no control. There can be
no assurance that bowling will continue to exhibit its current level of
popularity or that AMF will continue to compete effectively in the industry.
Bowling Products
AMF and Brunswick Corporation are the two largest manufacturers of bowling
center equipment, and are the only full-line manufacturers of bowling equpiment
and supplies that compete on a global basis. The Company also competes with
smaller, often regionally focused companies in certain product lines.
Management estimates that AMF accounts for approximately 41% of the worldwide
installed base of bowling center equipment.
Because of bowling equipment's relatively long useful life, used equipment
can be refurbished and sold, often to builders of new centers. The Company
actively purchases and resells its used equipment in order to compete with
refurbishers who often are U.S. based.
NCP sales follow the trends in the growth of bowling. As bowling is
introduced and becomes popular in new markets, the economics of constructing
and operating bowling centers become attractive to local market developers and
entreprenueurs. Consequently, new bowling center construction drives demand for
NCPs. For at least the last 15 years, the majority of NCP sales has been to
international markets. In recent years, this trend has been fueled by the
growth of bowling in several countries, such as China, Taiwan and South Korea.
There can be no assurance that future international expansion will occur or, if
it does occur, that AMF will be able to successfully compete in such emerging
markets.
Sales of Modernization and Consumer Products to bowling center operators
who manage the growing installed base of bowling equipment provide a stable
base of recurring revenue. These products include modernization equipment, both
proprietary and spare parts for existing equipment and other products including
pins, shoes and supplies. Some of these products, such as bowling pins, should
be replaced on approximately an annual basis to maintain a center, while
certain less frequent investments in other equipment are necessary to modernize
a center and are often required to maintain a customer base.
Ability to Implement Growth Strategies
The Company's Bowling Centers business has grown, and the Company
anticipates that it will continue to grow, through acquisitions of centers and
improvements at existing centers. There can be no assurance that the Company
will continue to be successful in acquiring centers and improving operations of
acquired and existing centers.
Historically, the Company financed acquisitions through issuances by AMF
Bowling of Common Stock, cash on hand and borrowings. The Company anticipates
that it will finance future acquisitions in the same manner. The
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<PAGE>
Credit Agreement and Indentures restrict the Company's ability to incur
indebtedness and make certain investments and as a result may limit the number
of centers acquired by the Company. See "Description of Notes." There can be no
assurance that the Company will generate cash or obtain debt or equity
financing on acceptable terms in amounts sufficient to fund its growth
strategies.
The Company also seeks to grow through increased sales of NCPs and
Modernization and Consumer Products. Integral to such increased sales is the
Company's strategy of exploiting increased demand for bowling products in
developed as well as in emerging bowling markets. There can be no assurance
that such increased demand will materialize or that the Company will be able to
successfully exploit such demand. See " -- Seasonality and Market Development
Cycles."
Seasonality and Market Development Cycles
Financial performance of Bowling Centers is seasonal in nature, with cash
flows typically peaking in the winter months and reaching their lows in the
summer months. The geographic diversity of Bowling Centers operations helps to
reduce this seasonality as bowling centers in certain countries in which AMF
operates exhibit different seasonal sales patterns. However, as a result of the
growing number of U.S. centers attributable to the Company's acquisition
program, the seasonality of financial performance of Bowling Centers business
may be accentuated.
In Australia, where AMF has its largest number of international centers,
the reversal of seasons relative to the U.S. helps mitigate the seasonality in
worldwide operations. AMF's cash flows are further stabilized by the location
of many centers in regions where the climates have high average temperatures
and high humidity. In the U.S., during the summer months when league bowling is
generally less active, bowling centers in the southern U.S. continue to show
strong performance. Similarly, in regions with warm summer climates such as
Hong Kong and Mexico, where bowling in air-conditioned centers may be more
attractive than outdoor activities, bowling centers show strong performance.
See "Note 16. Business Segments" in the Notes to Consolidated Financial
Statements.
Modernization and Consumer Products sales display seasonality. The U. S.
market, which is the largest market for Modernization and Consumer Products, is
driven by the beginning of league play in the fall of each year. Operators
typically sign purchase orders, particularly for replacement equipment, during
the first four months of the year, after they receive winter league revenue
indications. Equipment is shipped and installed during the summer months, when
leagues are generally less active. Sales of modernization equipment, such as
automatic scoring and synthetic lane overlays, are less predictable and
fluctuate more than the replacment equipment because of the four to ten year
life cycles of these major products.
NCP sales experience significant fluctuations due to changes in demand for
NCPs as certain markets experience high growth followed by market maturity, at
which times sales to that market decline, sometimes rapidly. Management
believes market cycles for individual countries have, in the past, spanned
several years, with periods of high demand for several markets (e.g., Japan,
Korea, Taiwan) which, in AMF's experience, last five years or more. These
growth patterns do not seem to be closely tied to general economic cycles.
International Operations
The Company's international operations are subject to the usual risks
inherent in operating abroad, including, but not limited to, risks with respect
to currency exchange rates, economic and political destabilization, other
disruption of markets, restrictive laws and actions by foreign governments
(such as restrictions on transfer of funds, import and export duties and
quotas, foreign customs and tariffs, value added taxes and unexpected changes
in regulatory environments), difficulty in obtaining distribution and support,
nationalization, the laws and policies of the United States affecting trade,
international investment and loans, and foreign tax laws. There can be no
assurance that these factors will not have a material adverse impact on the
Company's ability to increase or maintain its international sales or on its
results of operations.
AMF has a history of operating in a number of international markets, in
some cases, for over thirty years. Similar to other U.S.-based manufacturers
with export sales, local currency devaluation increases the cost of the
Company's bowling equipment in that market. As a result, a strengthening U.S.
dollar exchange rate may adversely impact sales volume and profit margins
during such periods.
Current economic difficulties in certain markets of the Asia Pacific
region have resulted in a reduction in the order rate and backlog for NCPs.
Management believes that many Asia Pacific customers are delaying purchases
13
<PAGE>
of NCP and Modernization equipment as they await economic stability in their
regions. As of March 13, 1998, the NCP backlog was 1,765 which is flat compared
to the same period last year.
For the year ended December 31, 1997, NCP sales and backlog to China,
Japan and other Asia Pacific markets represented 72.7% and 70.4% of total NCP
unit sales and backlog, respectively.
Foreign currency exchange rates also impact the translation of operating
results from international bowling centers. For the year ended December 31,
1997, revenue and EBITDA of international bowling centers represented 14.6% and
16.0% of consolidated results, respectively.
Over the longer term, management continues to believe that international
markets, including Asia Pacific, represent attractive opportunities for bowling
equipment sales and bowling center operations. Accordingly, management
continues to pursue its strategy in international markets.
Trading Market for the Notes
Although it is not obligated to do so, Goldman Sachs is making, and
intends to continue to make, a market in the Notes. Any such market-making
activity may be discontinued at any time, for any reason, without notice at the
sole discretion of Goldman Sachs. No assurance can be given as to the liquidity
of or the trading market for the Notes.
Goldman Sachs may be deemed to be an affiliate of the Company and, as
such, may be required to deliver a prospectus in connection with its
market-making activities in the Notes. Pursuant to a registration rights
agreement entered into in connection with the Acquisition, the Company agreed
to file and maintain a registration statement that would allow Goldman Sachs to
engage in market-making transactions in the Notes. Subject to certain
exceptions set forth in this registration rights agreement, the registration
statement will remain effective for as long as Goldman Sachs may be required to
deliver a prospectus in connection with market-making transactions in the
Notes. The Company has agreed to bear substantially all the costs and expenses
related to such registration statement.
Original Issue Discount Consequences
The Senior Subordinated Discount Notes were issued at a substantial
discount from their principal amount. Consequently, the purchasers of the
Senior Subordinated Discount Notes generally will be required to include
amounts in gross income for federal income tax purposes in advance of receipt
of the cash payments to which the income is attributable. Further, the
acquisition of a Note in a subsequent resale may give rise to market discount
on acquisition premium. See "Description of Certain Federal Income Tax
Consequences" for a more detailed discussion of the federal income tax
consequences to the holders of the Senior Subordinated Discount Notes of the
purchase, ownership and disposition of the Senior Subordinated Discount Notes.
The initial payment of interest on the Senior Subordinated Discount Notes
is required to be made on September 15, 2001. The Senior Subordinated Discount
Notes, therefore, are not a suitable investment for investors seeking current
income prior to that date.
Fraudulent Conveyance
Management of the Company believes that the indebtedness represented by
the Notes and the Guarantees was incurred for proper purposes and in good
faith, and that, based on then-current forecasts, asset valuations and other
financial information, after the issuance of the Notes, the Company would be
solvent, would have sufficient capital for carrying on its business and would
be able to pay its debts as they matured. See " -- Substantial Leverage;
Ability to Service Indebtedness." Notwithstanding management's belief, however,
if a court of competent jurisdiction in a suit by an unpaid creditor or a
representative of creditors (such as a trustee in bankruptcy or a
debtor-in-possession) were to find that, at the time of the incurrence of such
indebtedness, the Company or the Guarantors were insolvent, were rendered
insolvent by reason of such incurrence, were engaged in a business or
transaction for which its remaining assets constituted unreasonably small
capital, intended to incur, or believed that they would incur, debts beyond
their ability to pay such debts as they matured, or intended to hinder, delay
or defraud their creditors, and that the indebtedness was incurred for less
than reasonably equivalent value, then such court could, among other things,
(a) void all or a portion of the Company's or the Guarantors' obligations to
the Holders of the Notes, the effect of which would be that the Holders may not
be repaid in full or at all and/or (b) subordinate the Company's or the
Guarantors' obligations to the Holders of the Notes to other existing and
14
<PAGE>
future indebtedness of the Company to a greater extent than would otherwise be
the case, the effect of which would be to entitle such other creditors to be
paid in full before any payment could be made on the Notes or the Senior
Subordinated Guarantees.
RATIO OF EARNINGS TO FIXED CHARGES
The financial data contained herein were derived from Holdings' audited
consolidated financial statements for the year ended December 31, 1997, the
period ended December 31, 1996, and the Predecessor Company's audited combined
financial statements for the four months ended April 30, 1996, and the years
ended December 31, 1995, 1994, 1993.
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------
1997 1996 1995 1994 1993
------ ------ --------- ---------- ----------
<S> <C>
Ratio of earnings to fixed charges (1) ......... -- -- 6.1x 10.3x 11.0x
</TABLE>
- ---------
(1) The ratios of earnings to fixed charges are computed by dividing earnings
by fixed charges. Earnings consist of net income to which has been added
fixed charges and income taxes. Fixed charges consist of interest expense,
amortization of debt issuance costs, and the portion of rent expense
considered to represent interest. For the year ended December 31, 1997 and
1996, on a pro forma basis, Holdings had a deficiency of earnings to fixed
charges of $43.7 million and 30.6 million, respectively.
USE OF PROCEEDS
This Prospectus will be delivered in connection with the sale of the Notes by
Goldman Sachs in market-making transactions. The Company will not receive any of
the proceeds from such transactions.
15
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DESCRIPTION OF NOTES
General
The Senior Subordinated Notes and the Senior Subordinated Discount Notes
were exchanged for the Company's then-outstanding 10- 7/8% Series A Senior
Subordinated Notes due 2006 and the Company's then-outstanding 12- 1/4% Series
A Senior Subordinated Discount Notes due 2006, respectively (collectively, the
"Original Notes").
The Company issued the Senior Subordinated Notes pursuant to the same
Indenture (the "Senior Subordinated Note Indenture") among the Company, the
Guarantors and IBJ Schroder Bank & Trust Company, as trustee (the "Senior
Subordinated Note Trustee"), under which the 10- 7/8% Senior Subordinated Notes
due 2006 were issued. The Company issues Senior Subordinated Discount Notes
pursuant to an Indenture (the "Senior Subordinated Discount Note Indenture"
and, together with the Senior Subordinated Note Indenture, the "Indentures")
among the Company, the Guarantors and Firstar Bank of Minnesota, N.A., as
successor to American Bank, N.A., as trustee (the "Senior Subordinated Discount
Note Trustee" and, together with the Senior Subordinated Note Trustee, the
"Trustees"), under which the 12- 1/4% Senior Subordinated Discount Notes due
2006 were issued. The terms of the Notes include those stated in the Indentures
and those made part of the Indentures by reference to the Trust Indenture Act
of 1939 (the "Trust Indenture Act"). The Notes are subject to all such terms,
and Holders are referred to the Indentures and the Trust Indenture Act for a
statement thereof. The discussion below summarizes the terms of the Notes that
the Company believes are material to an investor in the Notes. This summary is
qualified in its entirety by reference to the full text of the agreements
underlying this discussion, copies of which are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and are incorporated
by reference herein. The definitions of certain terms used in the following
summary are set forth below under the caption " -- Certain Definitions."
As of December 31, 1997, all of the Company's Subsidiaries were Restricted
Subsidiaries. However, under certain circumstances, the Company will be able to
designate current or future Subsidiaries as Unrestricted Subsidiaries.
Unrestricted Subsidiaries will not be subject to many of the restrictive
covenants set forth in the Indentures.
Subordination
The payment of principal of, premium, if any, and interest, including
Liquidated Damages, if any, on the Notes will be subordinated in right of
payment, in certain circumstances as set forth in the Indentures, to the prior
payment in full of all Senior Debt, whether outstanding on the date of the
Indentures or thereafter incurred.
The Indentures provide that, upon any distribution to creditors of the
Company in a liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property, an assignment for the benefit of creditors or any
marshalling of the Company's assets and liabilities, the holders of Senior Debt
will be entitled to receive payment in full of all Obligations due in respect
of such Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the documents relating to the applicable
Senior Debt, whether or not the claim for such interest is allowed as a claim
in such proceeding) before the Holders will be entitled to receive any payment
with respect to the Notes, and until all Obligations with respect to Senior
Debt are paid in full, any distribution to which the Holders would be entitled
will be made to the holders of Senior Debt (except that Holders may receive
payments made from the trust described under " -- Legal Defeasance and Covenant
Defeasance").
The Indentures also provide that the Company may not make any payment upon
or in respect of the Notes (except from the trust described under " -- Legal
Defeasance and Covenant Defeasance") if (i) a default in the payment of the
principal of, premium, if any, or interest on Designated Senior Debt occurs and
is continuing, or any judicial proceeding is pending to determine whether any
such default has occurred, or (ii) any other default occurs and is continuing
with respect to Designated Senior Debt that permits, or would permit, with the
passage of time or the giving of notice or both, holders of the Designated
Senior Debt as to which such default relates to accelerate its maturity and the
relevant Trustee receives a notice of such default (a "Payment Blockage
Notice") from the Company or the holders of any Designated Senior Debt.
Payments on the Notes may and shall be resumed (a) in the case of a payment
default, upon the date on which such default is cured or waived or shall have
ceased to exist, unless another default, event of default or other event that
would prohibit such payment shall have occurred and be continuing, or all
Obligations in respect of such Designated Senior Debt shall have been
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<PAGE>
discharged or paid in full and (b) in case of a nonpayment default, the earlier
of the date on which such nonpayment default is cured or waived or 179 days
after the date on which the applicable Payment Blockage Notice is received by
the relevant Trustee. No new period of payment blockage may be commenced unless
and until 360 days have elapsed since the first day of effectiveness of the
immediately prior Payment Blockage Notice. No nonpayment default that existed
or was continuing on the date of delivery of any Payment Blockage Notice to the
relevant Trustee shall be, or be made, the basis for a subsequent Payment
Blockage Notice unless such default shall have been subsequently cured or
waived for a period of not less than 180 days.
The Indentures further require that the Company promptly notify holders of
Senior Debt if payment of the Notes is accelerated because of an Event of
Default.
As a result of the subordination provisions described above, in the event
of a liquidation or insolvency, Holders may recover less ratably than creditors
of the Company who are holders of Senior Debt. See "Risk Factors." The
principal amount of Senior Debt outstanding at December 31, 1997 was
approximately $621.3 million. The Indentures limit, subject to certain
financial tests, the amount of additional Indebtedness, including Senior Debt,
that the Company and its Restricted Subsidiaries can incur. See " -- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Disqualified Stock."
"Designated Senior Debt" means (i) so long as the Senior Bank Debt is
outstanding, the Senior Bank Debt, (ii) the Senior Bank Hedging Obligations and
(iii) any other Senior Debt permitted under the Indentures the principal amount
of which is $25.0 million or more and that has been designated by the Company
as "Designated Senior Debt."
"Senior Bank Debt" means all Obligations in respect of the Indebtedness
outstanding under the Credit Agreement, together with any refunding,
refinancing or replacement (in whole or part) of such Indebtedness.
"Senior Bank Hedging Obligations" means all present and future Hedging
Obligations of the Company, whether existing now or in the future, that are
secured by the Credit Agreement or any of the collateral documents executed
from time to time in connection therewith.
"Senior Debt" means (i) the Senior Bank Debt, (ii) the Senior Bank Hedging
Obligations and (iii) any other Indebtedness permitted to be incurred by the
Company under the terms of the Indentures, unless the instrument under which
such Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes. Notwithstanding anything to the
contrary in the foregoing, Senior Debt does not include (1) any liability for
federal, state, local or other taxes owed or owing by the Company, (2) any
Indebtedness of the Company to any of its Restricted Subsidiaries or other
Affiliates (other than Goldman Sachs and its Affiliates, including Pearl Street
L.P.), (3) any trade payables, (4) that portion of any Indebtedness that is
incurred in violation of the Indentures, (5) Indebtedness which, when incurred
and without respect to any election under Section 1111(b) of Title 11, United
States Code, is without recourse to the Company, (6) any Indebtedness,
Guarantee or obligation of the Company which is contractually subordinate in
right of payment to any other Indebtedness, Guarantee or obligation of the
Company; provided, however, that this clause (6) does not apply to the
subordination of liens or security interests covering particular properties or
types of assets securing Senior Debt, (7) Indebtedness evidenced by the Notes
and (8) Capital Stock.
The Notes rank pari passu or senior in right of payment to all
Subordinated Indebtedness of the Company. The Senior Subordinated Notes and the
Senior Subordinated Discount Notes rank pari passu with each other.
Senior Subordinated Guarantees
The Company's payment obligations under the Notes are jointly and
severally guaranteed on a senior subordinated basis (the "Senior Subordinated
Guarantees") by Holdings and each of the Company's direct and indirect domestic
subsidiaries. The obligations of each Guarantor under its Senior Subordinated
Guarantee is subordinated to its Guarantee of all Obligations under the Credit
Agreement (the "Senior Guarantees") and is limited so as not to constitute a
fraudulent conveyance under applicable law. See, however, "Risk Factors --
Fraudulent Conveyance."
The Indentures provide that no Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
unless (i) subject to the provisions of the following paragraph, the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) assumes all the obligations of such Guarantor pursuant to
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<PAGE>
a supplemental indenture in form and substance reasonably satisfactory to the
Trustees, under the Notes and the Indentures; (ii) immediately after giving
effect to such transaction, no Default or Event of Default exists; and (iii)
except in the case of a merger of such Guarantor with or into the Company or
another Guarantor, the Company would be permitted by virtue of the Company's
pro forma Fixed Charge Coverage Ratio to incur, immediately after giving effect
to such transaction, at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the covenant described below
under the caption " -- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Disqualified Stock."
The Indentures provide that in the event of a sale or other disposition of
all or substantially all of the assets of any Guarantor (other than Holdings),
by way of merger, consolidation or otherwise, or a sale or other disposition
(including, without limitation, by foreclosure) of all of the Capital Stock of
any Guarantor (other than Holdings), then such Guarantor (in the event of a
sale or other disposition, by way of such a merger, consolidation or otherwise
(including, without limitation, by foreclosure), of all of the capital stock of
such Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Guarantor) will be automatically released and relieved of any obligations under
its Senior Subordinated Guarantee; provided that the Net Proceeds of such sale
or other disposition are applied in accordance with the applicable provisions
of the Indentures. See " -- Repurchase at the Option of Holders -- Asset
Sales." The Indentures also provide that upon the merger, consolidation, sale
or other disposition (including, without limitation, by foreclosure) of all or
substantially all of the assets of the Company, then Holdings will be
automatically released and relieved of any obligations under its Senior
Subordinated Guarantee; provided that such merger, consolidation or sale
complies with the applicable provisions of the Indentures. See " -- Certain
Covenants -- Merger, Consolidation or Sale of All or Substantially All Assets."
Certain operations of the Company are conducted through Subsidiaries that
are not Guarantors and the Company is dependent upon the cash flow of those
Subsidiaries to meet its obligations, including its obligations under the
Notes. The Notes are effectively subordinated to all indebtedness and other
liabilities (including trade payables and capital lease obligations) of the
Company's Subsidiaries that are not Guarantors. Such indebtedness and
liabilities aggregated approximately $11.8 million (excluding inter-company
payables to the Company) at December 31, 1997. Any right of the Company to
receive assets of any of such Subsidiaries upon the latter's liquidation or
reorganization (and the consequent right of the Holders of the Notes to
participate in those assets) are effectively subordinated to the claims of such
Subsidiaries' creditors, except to the extent that the Company or a Guarantor
is itself recognized as a creditor of such Subsidiary, in which case the claims
of the Company would still be subordinate to any security in the assets of such
Subsidiary and any indebtedness of such Subsidiary senior to that held by the
Company or a Guarantor. See "Risk Factors -- Holding Company Structure" and
Note 20 to the Condensed Consolidated Balance Sheet of Holdings, incorporated
herein by reference.
Principal, Maturity and Interest of the Senior Subordinated Notes
The Senior Subordinated Notes are general unsecured obligations of the
Company, limited in aggregate principal amount to $250.0 million, and will
mature on March 15, 2006. Interest on the Senior Subordinated Notes accrues at
the rate of 10- 7/8% per annum and is payable in cash semi-annually in arrears
on March 15 and September 15, to Holders of record on the immediately preceding
March 1 and September 1. Interest on the Senior Subordinated Notes accrues from
the most recent date to which interest has been paid or, if no interest has
been paid, from March 21, 1996. Interest is computed on the basis of a 360-day
year consisting of twelve 30-day months. Principal, premium, if any, and
interest, including Liquidated Damages, if any, on the Senior Subordinated
Notes is payable at the office or agency of the Company maintained for such
purpose within the City and State of New York or, at the option of the Company,
payment of interest, including Liquidated Damages, if any, may be made by check
mailed to the Holders of the Senior Subordinated Notes at their respective
addresses set forth in the register of Holders of Senior Subordinated Notes;
provided, however, that all payments with respect to Global Notes and
definitive Notes the Holders of which have given wire transfer instructions to
the Company at least ten Business Days prior to the applicable payment date are
required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Until otherwise designated by the
Company, the Company's office or agency in New York will be the office of the
Senior Subordinated Note Trustee maintained for such purpose. The Senior
Subordinated Notes will be issued in minimum denominations of $1,000 and
integral multiples thereof.
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<PAGE>
Principal, Maturity and Interest of the Senior Subordinated Discount Notes
The Senior Subordinated Discount Notes are general unsecured obligations
of the Company and, prior to December 15, 1997, had a fully-accreted value of
$452.0 million based on a maturity date of March 15, 2006. On December 15,
1997, the Company redeemed $118.9 million in principal which represented a
fully-accreted value of $175.0 million using a portion of a capital
contribution received from AMF Bowling attributable to proceeds received by AMF
Bowling from the Initial Public Offering. The remaining balance of Senior
Subordinated Discount Notes will mature on March 15, 2006, at a fully-accreted
value of $277.0 million. Until March 15, 2001 (the "Full Accretion Date"), no
interest (other than Liquidated Damages, if applicable) will be paid in cash on
the Senior Subordinated Discount Notes, but the Accreted Value will accrete
(representing the amortization of original issue discount) between the Issuance
Date and the Full Accretion Date, on a semi-annual bond equivalent basis using
a 360-day year comprised of twelve 30-day months such that the Accreted Value
shall be equal to the full principal amount at maturity of the Senior
Subordinated Discount Notes on the Full Accretion Date. Beginning on the Full
Accretion Date, interest on the Senior Subordinated Discount Notes will accrue
at the rate of 12 1/4% per annum and will be payable in cash semi-annually in
arrears on March 15 and September 15, commencing on September 15, 2001, to
Holders of record on the immediately preceding March 1 and September 1.
Interest on the Senior Subordinated Discount Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the Full Accretion Date. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Principal, premium, if any,
and interest, including Liquidated Damages, if any, on the Senior Subordinated
Discount Notes will be payable at the office or agency of the Company
maintained for such purpose within the City and State of New York or, at the
option of the Company, payment of interest, including Liquidated Damages, if
any, may be made by check mailed to the Holders of the Senior Subordinated
Discount Notes at their respective addresses set forth in the register of
Holders of Senior Subordinated Discount Notes; provided, however, that all
payments with respect to Global Notes and definitive Notes the Holders of which
have given wire transfer instructions to the Company at least ten Business Days
prior to the applicable payment date will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
Holders thereof. Until otherwise designated by the Company, the Company's
office or agency in New York will be the office of the Senior Subordinated
Discount Note Trustee maintained for such purpose. The Senior Subordinated
Discount Notes will be issued in minimum denominations of $1,000 and integral
multiples thereof.
Settlement and Payment
Payments by the Company in respect of the Notes (including principal,
premium, if any, interest and Liquidated Damages, if any) will be made in
immediately available funds as provided above. The Notes trade in the Same-Day
Funds Settlement System of the Depository (as defined below), and any secondary
market trading activity in the Notes will, therefore, be required by the
Depository to be settled in immediately available funds. No assurance can be
given as to the effect, if any, of such settlement arrangements on trading
activity in the Notes.
Because of time-zone differences, the securities account of Euroclear or
Cedel Bank, societe anonyme ("Cedel Bank") participants (each, a "Member
Organization") purchasing an interest in a Global Note from a Participant (as
defined below) that is not a Member Organization will be credited during the
securities settlement processing day (which must be a business day for
Euroclear or Cedel Bank, as the case may be) immediately following the
Depository settlement date. Transactions in interests in a Global Note settled
during any securities settlement processing day will be reported to the
relevant Member Organization on the same day. Cash received in Euroclear or
Cedel Bank as a result of sales of interests in a Global Note by or through a
Member Organization to a Participant that is not a Member Organization will be
received with value on the Depository settlement date, but will not be
available in the relevant Euroclear or Cedel Bank cash account until the
business day following settlement in the Depository.
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Optional Redemption
Senior Subordinated Notes
Except as described below, the Senior Subordinated Notes are not
redeemable at the Company's option prior to March 15, 2001. From and after
March 15, 2001, the Senior Subordinated Notes will be subject to redemption at
the option of the Company, in whole or in part, upon not less than 30 nor more
than 60 days' written notice, at the Senior Subordinated Note Redemption Prices
(expressed as percentages of principal amount) set forth below, plus accrued
and unpaid interest, including Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the twelve-month period
beginning on March 15 of each of the years indicated below:
<TABLE>
<CAPTION>
Percentage of
Principal
Year Amount
- ------------------------------- --------------
<S> <C>
2001 ........................ 105.438%
2002 ........................ 103.625%
2003 ........................ 101.813%
2004 and thereafter ......... 100.000%
</TABLE>
Prior to March 15, 1999, the Company may, at its option, on any one or
more occasions, redeem up to $100.0 million in aggregate principal amount of
Senior Subordinated Notes at a redemption price equal to 110.875% of the
principal amount thereof, plus accrued and unpaid interest, including
Liquidated Damages, if any, thereon to the redemption date, with the net
proceeds of public or private sales of common stock of, or contributions to the
common equity capital of, the Company; provided that at least $150.0 million in
aggregate principal amount of Senior Subordinated Notes remains outstanding
immediately after the occurrence of such redemption; and provided, further,
that such redemption shall occur within 60 days of the date of the closing of
the related sale of common stock of, or capital contribution to, the Company.
Senior Subordinated Discount Notes
Except as described below, the Senior Subordinated Discount Notes are not
redeemable at the Company's option prior to March 15, 2001. From and after
March 15, 2001, the Senior Subordinated Discount Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days' written notice, at the Senior Subordinated
Discount Note Redemption Prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest, including Liquidated
Damages, if any, thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on March 15 of each of the years indicated
below:
<TABLE>
<CAPTION>
Percentage of
Principal
Year Amount
- ------------------------------- --------------
<S> <C>
2001 ........................ 106.125%
2002 ........................ 104.083%
2003 ........................ 102.042%
2004 and thereafter ......... 100.000%
</TABLE>
Prior to March 15, 1999, the Company may, at its option, on any one or
more occasions, redeem the Senior Subordinated Discount Notes at a redemption
price equal to 112.250% of the Accreted Value thereof, plus accrued and unpaid
Liquidated Damages, if any, thereon to the redemption date, with the net
proceeds of public or private sales of common stock of, or contributions to the
common equity capital of, the Company; provided that at least $150.0 million in
aggregate Accreted Value of Senior Subordinated Discount Notes remains
outstanding immediately after the occurrence of such redemption; and provided,
further, that such redemption shall occur within 60 days of the date of the
closing of the related sale of common stock of, or capital contribution to, the
Company.
Selection and Notice
If less than all of the Senior Subordinated Notes and/or Senior
Subordinated Discount Notes, as the case may be, are to be redeemed at any
time, selection of such Notes for redemption will be made by the applicable
Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are
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<PAGE>
listed, or, if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the applicable Trustee shall deem fair and appropriate; provided
that, subject to the limitations described above, the Company may, at its
option, elect to redeem either Senior Subordinated Notes, Senior Subordinated
Discount Notes, or both Senior Subordinated Notes and Senior Subordinated
Discount Notes; and provided further, that no Notes of $1,000 or less shall be
redeemed in part.
Notices of redemption shall be mailed by first class mail at least 30 but
not more than 60 days before the redemption date to each Holder to be redeemed
at such Holder's registered address. If any Note is to be redeemed in part
only, the notice of redemption that relates to such Note shall state the
portion of the principal amount thereof to be redeemed. A new Note in principal
amount equal to the unredeemed portion thereof will be issued in the name of
the Holder upon cancellation of the original Note. On and after the redemption
date, unless the Company defaults in payment of the redemption price, interest
ceases to accrue on Notes or portions of them called for redemption.
Mandatory Redemption
Except as set forth below under " -- Repurchase at the Option of Holders",
the Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
Repurchase at the Option of Holders
Change of Control
Upon the occurrence of a Change of Control (as defined below), each Holder
will have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash (the "Change of Control Payment") equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest, including Liquidated Damages,
if any, thereon to the date of repurchase (or if such Change of Control Offer
is with respect to the Senior Subordinated Discount Notes prior to the Full
Accretion Date, 101% of the Accreted Value thereof on the date of repurchase
plus accrued and unpaid Liquidated Damages, if any). Within 30 days following
any Change of Control, the Company will mail a notice to each Holder describing
the transaction or transactions that constitute the Change of Control and
offering to repurchase Notes pursuant to the procedures required by the
Indentures and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control.
The Indentures provide that, prior to complying with the provisions of
this covenant, but in any event within 30 days following a Change of Control,
the Company will either repay all outstanding amounts under the Credit
Agreement or offer to repay in full all outstanding amounts under the Credit
Agreement and repay the Obligations held by each Lender who has accepted such
offer or obtain the requisite consents, if any, under the Credit Agreement to
permit the repurchase of the Notes required by this covenant. There can be no
assurance that the Company will have sufficient funds, or will obtain the
requisite consent of the Lenders under the Credit Agreement, to satisfy the
Change of Control repurchase requirement if such requirement arises.
The definition of a Change of Control includes transfers of "substantially
all" of the assets of the Company and its Restricted Subsidiaries. There is no
definitive quantitative test under New York law (the governing law of the
Indentures) as to what portion of the assets would constitute "substantially
all." Accordingly, there may be transactions that result in uncertainty as to
whether the Company is obligated to make a Change of Control Offer.
On a date that is no earlier than 30 days nor later than 60 days from the
date that the Company mails notice of the Change of Control to the Holders (the
"Change of Control Payment Date"), the Company will, to the extent lawful, (1)
accept for payment all Notes or portions thereof properly tendered pursuant to
the Change of Control Offer, (2) deposit with the Paying Agents an amount equal
to the Change of Control Payment in respect of all Notes or portions thereof so
tendered and (3) deliver or cause to be delivered to the Trustees for
cancellation the Notes so accepted together with an Officers' Certificate
stating the aggregate principal amount of Notes or portions thereof being
purchased by the Company. The Paying Agents will promptly mail to each Holder
so tendered the Change of Control Payment for such Notes, and the Trustees will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an
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<PAGE>
integral multiple thereof. The Company will publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
The Change of Control provisions described above will be applicable
whether or not any other provisions of the Indentures are applicable. Except as
described above with respect to a Change of Control, the Indentures do not
contain provisions that permit the Holders of the Notes to require that the
Company repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction. Such a transaction could occur, and
could have an effect on the Notes, without constituting a Change of Control.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in the Indentures applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
The existence of a Holder's right to require the Company to repurchase
such Holder's Notes upon the occurrence of a Change of Control may deter a
third party from seeking to acquire the Company in a transaction that would
constitute a Change of Control.
Asset Sales
The Indentures provide that the Company will not, and will not permit any
of its Restricted Subsidiaries to, cause, make or suffer to exist an Asset Sale
unless (i) the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the
fair market value (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustees) of the assets or
Equity Interests issued or sold or otherwise disposed of and (ii) except in the
case of a Permitted Asset Swap, at least 80% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash or
Cash Equivalents; provided that the amount of (x) any liabilities (as shown on
the Company's or such Restricted Subsidiary's most recent balance sheet) of the
Company or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any guarantee
thereof) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (y) any notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee
that are immediately converted by the Company or such Restricted Subsidiary
into cash (to the extent of the cash received), shall be deemed to be cash for
purposes of this provision.
Within 365 days after the Company's or any Restricted Subsidiary's receipt
of the Net Proceeds of any Asset Sale, the Company or such Restricted
Subsidiary may apply the Net Proceeds from such Asset Sale, at its option, (i)
to permanently reduce Obligations under the Credit Agreement (and to
correspondingly reduce commitments with respect thereto) or other Senior Debt
or Pari Passu Indebtedness, (ii) to secure Letter of Credit Obligations to the
extent related letters of credit have not been drawn upon or returned undrawn,
(iii) to an investment in any one or more businesses, capital expenditures or
acquisitions of other assets, in each case, used or useful in a Principal
Business, (iv) to an investment in properties or assets that replace the
properties and assets that are the subject of such Asset Sale and/or (v) in the
case of a sale of a bowling center or bowling centers, deem such Net Proceeds
to have been applied pursuant to the immediately preceding clause (iv) to the
extent of any expenditures made to acquire or construct one or more bowling
centers in the general vicinity of the bowling center(s) sold within 365 days
preceding the date of the Asset Sale. Pending the final application of any such
Net Proceeds, the Company or such Restricted Subsidiary may temporarily reduce
Indebtedness under a revolving credit facility, if any, or otherwise invest
such Net Proceeds in Cash Equivalents. The Indentures will provide that any Net
Proceeds from the Asset Sale that are not invested as provided and within the
time period set forth in the first sentence of this paragraph will be deemed to
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $25.0 million, the Company will be required to make an offer to all
Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Notes that is an integral multiple of $1,000 that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the aggregate principal amount thereof, plus accrued and unpaid interest,
including Liquidated Damages, if any (or, if such Asset Sale Offer is with
respect to the Senior Subordinated Discount Notes prior to the Full Accretion
Date, 100% of the Accreted Value thereof on the date of purchase, plus accrued
and unpaid Liquidated Damages, if any), to the date fixed for the closing of
such offer, in accordance with the procedures set forth in the Indentures. The
Company will commence an Asset Sale Offer with respect to Excess Proceeds
within ten Business Days after the date that the
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<PAGE>
aggregate amount of Excess Proceeds exceeds $25.0 million by mailing the notice
required pursuant to the terms of the Indentures, with a copy to the Trustees.
To the extent that the aggregate amount of Notes tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Company may use any remaining
Excess Proceeds (x) to offer to redeem Subordinated Indebtedness (a
"Subordinated Asset Sale Offer") in accordance with the provisions of the
indenture or other agreement governing such Subordinated Indebtedness or (y)
for any purpose not prohibited by the Indentures. If the aggregate principal
amount of Notes surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustees shall select the Notes to be purchased on a pro rata
basis, based upon the Accreted Value of Senior Subordinated Discount Notes and
the principal amount of Senior Subordinated Notes tendered. Upon completion of
any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at
zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of an Asset Sale.
The Credit Agreement permits a portion of the proceeds of the Initial
Public Offering to be applied to the repayment of Notes, and also provides that
certain change of control events with respect to the Company will constitute a
default thereunder. Any future credit agreements or other agreements relating
to Senior Debt to which the Company becomes a party may contain similar
restrictions and provisions. In the event a Change of Control occurs or an
Asset Sale Offer is required to be made at a time when the Company is
prohibited from purchasing Notes, the Company could seek the consent of its
lenders to the purchase of Notes or could attempt to refinance the borrowings
that contain such prohibition. If the Company does not obtain such a consent or
repay such borrowings, the Company will remain prohibited from purchasing
Notes. In such case, the Company's failure to purchase tendered Notes would
constitute an Event of Default under the Indentures. See " -- Events of Default
and Remedies." In such circumstances, the subordination provisions in the
Indentures would likely restrict payments to the Holders of Notes.
Certain Covenants
Restricted Payments
The Indentures provide that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay
any dividend or make any other payment or distribution on account of the
Company's or any of its Restricted Subsidiaries' Equity Interests (other than
dividends or distributions payable in Equity Interests (other than Disqualified
Stock) of the Company or dividends or distributions payable to the Company or
any Restricted Subsidiary of the Company); (ii) purchase, redeem, defease or
otherwise acquire or retire for value any Equity Interests of the Company or
any direct or indirect parent of the Company; (iii) make any principal payment
on, or purchase, redeem, defease or otherwise acquire or retire for value any
Subordinated Indebtedness, except at final maturity; or (iv) make any
Restricted Investment (all such payments and other actions set forth in clauses
(i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
immediately after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
the first paragraph of the covenant described below under the caption " --
Incurrence of Indebtedness and Issuance of Disqualified Stock;" and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries
after the date of the Indentures (including Restricted Payments permitted
by clause (i) of the next succeeding paragraph, but excluding all other
Restricted Payments permitted by the next succeeding paragraph), is less
than the sum of (i) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) from the beginning of the
first fiscal quarter commencing after the date of the Indentures to the
end of the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted Payment
(or, if such Consolidated Net Income for such period is a deficit, less
100% of such deficit), plus (ii) 100% of the aggregate net
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cash proceeds and the fair market value, as determined in good faith by the
Board of Directors, of marketable securities received by the Company from
the issue or sale since the date of the Indentures of Equity Interests
(including Retired Capital Stock) of the Company (except in connection with
the Acquisition) or of debt securities of the Company that have been
converted into such Equity Interests (other than Refunding Capital Stock or
Equity Interests or convertible debt securities of the Company sold to a
Restricted Subsidiary of the Company and other than Disqualified Stock or
debt securities that have been converted into Disqualified Stock), plus
(iii) 100% of the aggregate amounts contributed to the common equity
capital of the Company since the date of the Indentures (except amounts
contributed to finance the Acquisition), plus (iv) 100% of the aggregate
amounts received in cash and the fair market value of marketable securities
(other than Restricted Investments) received from (x) the sale or other
disposition of Restricted Investments made by the Company and its
Restricted Subsidiaries since the date of the Indentures or (y) the sale of
the stock of an Unrestricted Subsidiary or the sale of all or substantially
all of the assets of an Unrestricted Subsidiary to the extent that a
liquidating dividend is paid to the Company or any Subsidiary from the
proceeds of such sale, plus (v) 100% of any dividends received by the
Company or a Wholly Owned Restricted Subsidiary of the Company after the
date of the Indentures from an Unrestricted Subsidiary of the Company, plus
(vi) $10.0 million.
The foregoing provisions will not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration such payment would
have complied with the provisions of the Indentures;
(ii) the redemption, repurchase, retirement or other acquisition of
any Equity Interests of the Company or any Restricted Subsidiary (the
"Retired Capital Stock") or any Subordinated Indebtedness, in each case,
in exchange for, or out of the proceeds of, the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of Equity
Interests of the Company (other than any Disqualified Stock) (the
"Refunding Capital Stock"); provided that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(ii) of
the immediately preceding paragraph;
(iii) the defeasance, redemption or repurchase of Subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(iv) the redemption, repurchase or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted
Subsidiary of the Company held by any member of the Company's (or any of
its Restricted Subsidiaries') management pursuant to any management
equity subscription agreement or stock option or similar agreement;
provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests shall not exceed the sum
of $5.0 million in any 12-month period plus the aggregate cash proceeds
received by the Company during such 12-month period from any issuance of
Equity Interests by the Company to members of management of the Company
and its Restricted Subsidiaries; provided that the amount of any such
net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(ii) of
the immediately preceding paragraph;
(v) Investments in Unrestricted Subsidiaries or in Joint Ventures
having an aggregate fair market value, taken together with all other
Investments made pursuant to this clause (v) that are at that time
outstanding, not to exceed 5% of Total Assets at the time of such
Investment (with the fair market value of each Investment being measured
at the time made and without giving effect to subsequent changes in
value);
(vi) repurchases of Equity Interests deemed to occur upon exercise or
conversion of stock options, warrants, convertible securities or other
similar Equity Interests if such Equity Interests represent a portion of
the exercise or conversion price of such options, warrants, convertible
securities or other similar Equity Interests;
(vii) the making and consummation of a Subordinated Asset Sale Offer
in accordance with the provisions described under the caption entitled "
-- Repurchase at the Option of Holders -- Asset Sales;" and
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(viii) any dividend or distribution payable on or in respect of any
class of Equity Interests issued by a Restricted Subsidiary of the
Company; provided that such dividend or distribution is paid on a pro
rata basis to all of the holders of such Equity Interests in accordance
with their respective holdings of such Equity Interests;
provided, further, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (iv) or (v) above, no Default or
Event of Default shall have occurred and be continuing or would occur as a
consequence thereof.
As of December 31, 1997, all of the Company's Subsidiaries are Restricted
Subsidiaries. The Company will not permit any Unrestricted Subsidiary to become
a Restricted Subsidiary except pursuant to the last sentence of the definition
of "Unrestricted Subsidiary." For purposes of designating any Restricted
Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid) in the
Subsidiary so designated will be deemed to be Restricted Payments in an amount
equal to the book value of such Investment at the time of such designation.
Such designation will only be permitted if a Restricted Payment in such amount
would be permitted at such time and if such Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. Unrestricted Subsidiaries will not be
subject to any of the restrictive covenants set forth in the Indentures.
The amount of all Restricted Payments (other than cash) shall be the fair
market value (evidenced by a resolution of the Board of Directors set forth in
an Officers' Certificate delivered to the Trustees) on the date of the
Restricted Payment of the asset(s) proposed to be transferred by the Company or
such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustees an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by the covenant "Restricted Payments" were computed,
which calculations may be based upon the Company's latest available financial
statements.
Incurrence of Indebtedness and Issuance of Disqualified Stock
The Indentures provide that the Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guaranty or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur" and correlatively, an
"incurrence" of) any Indebtedness (including Acquired Debt) and that the
Company will not issue any Disqualified Stock; provided, however, that the
Company may incur Indebtedness (including Acquired Debt) or issue shares of
Disqualified Stock if the Fixed Charge Coverage Ratio for the Company for the
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date of such incurrence
would have been at least 2.25 to 1.0 if such date is after September 15, 1997
and on or prior to March 15, 1999 and 2.50 to 1.0 thereafter, in each case,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or the
Disqualified Stock had been issued, as the case may be, and the application of
the proceeds therefrom had occurred at the beginning of such four-quarter
period.
The foregoing provisions will not apply to:
(a) the incurrence by the Company (and the Guarantee thereof by the
Guarantors) of (i) Indebtedness under the Credit Agreement and the
issuance of letters of credit thereunder (with letters of credit being
deemed to have a principal amount equal to the aggregate maximum amount
then available to be drawn thereunder, assuming compliance with all
conditions for drawing) up to an aggregate principal amount of $715.0
million outstanding at any one time, less principal repayments of term
loans and permanent commitment reductions with respect to revolving loans
and letters of credit under the Credit Agreement made after the date of
the Indentures and (ii) additional Indebtedness under the Credit Agreement
and the issuance of additional letters of credit thereunder (with letters
of credit being deemed to have a principal amount equal to the aggregate
maximum amount then available to be drawn thereunder, assuming compliance
with all conditions for drawing) up to an aggregate principal amount of
$75.0 million outstanding at any one time (reduced by the aggregate
principal amount (or accreted value, as applicable) of Indebtedness
outstanding pursuant to clause (l) below);
(b) the incurrence by the Company or any of its Restricted Subsidiaries
of any Existing Indebtedness;
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(c) the incurrence by the Company or any of its Restricted Subsidiaries
of Indebtedness represented by the Notes;
(d) Indebtedness (including Capital Lease Obligations) incurred by the
Company or any of its Restricted Subsidiaries to finance the purchase,
lease or improvement of property (real or personal), assets or equipment
(whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets), in an aggregate principal amount not to exceed
5% of Total Assets at any time outstanding;
(e) Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including,
without limitation, letters of credit in respect of workers' compensation
claims or self-insurance, or other Indebtedness with respect to
reimbursement type obligations regarding workers' compensation claims;
(f) intercompany Indebtedness between or among the Company and any of its
Restricted Subsidiaries and Guarantees by a Restricted Subsidiary of the
Company of Indebtedness of any other Restricted Subsidiary of the Company
or the Company;
(g) Hedging Obligations that are incurred (1) for the purpose of fixing
or hedging interest rate risk with respect to any Indebtedness that is
permitted by the terms of the Indentures to be outstanding or (2) for the
purpose of fixing or hedging currency exchange rate risk with respect to
any currency exchanges;
(h) obligations in respect of performance and surety bonds and completion
guarantees provided by the Company or any Restricted Subsidiary in the
ordinary course of business;
(i) the incurrence by the Company or any of the Guarantors of
Indebtedness in connection with the acquisition of assets or a new
Restricted Subsidiary; provided that such Indebtedness was incurred by the
prior owner of such assets or such new Restricted Subsidiary prior to such
acquisition by the Company or such Restricted Subsidiary and was not
incurred in connection with, or in contemplation of, such acquisition; and
provided further that the Fixed Charge Coverage Ratio for the Company for
the most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date of such
transaction would have been at least 2.25 to 1.0 if such date is after
September 15, 1997 and on or prior to March 15, 1999 and 2.50 to 1.0
thereafter, in each case, determined on a pro forma basis, as if such
transaction had occurred at the beginning of such four-quarter period and
such Indebtedness or Disqualified Stock and the Consolidated Cash Flow of
such merged or acquired Person had been included for all purposes in such
pro forma calculation;
(j) the incurrence by the Company or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund,
Indebtedness that was permitted by the Indentures to be incurred;
(k) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company; and
(l) the incurrence by the Company of additional Indebtedness not
otherwise permitted hereunder in an amount under this clause (l) not to
exceed $75.0 million in aggregate principal amount (or accreted value, as
applicable) outstanding at any one time (reduced by the aggregate
principal amount of Indebtedness outstanding pursuant to clause (a)(ii)
above).
No Senior Subordinated Debt
The Indentures provide that (i) the Company will not directly or
indirectly incur, create, issue, assume, guarantee or otherwise become liable
for any Indebtedness that is subordinate or junior in right of payment to any
Senior Debt and senior in any respect in right of payment to the Notes and (ii)
no Guarantor will directly or indirectly incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate
or junior in right of payment to the Senior Guarantees and senior in any
respect in right of payment to the Senior Subordinated Guarantees.
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Except for the limitations on the incurrence of debt described above under
the caption " -- Incurrence of Indebtedness and Issuance of Disqualified
Stock," the Indentures do not limit the amount of debt that is pari passu with
the Notes.
Liens
The Indentures provide that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or suffer to exist any Lien that secures obligations under any Pari
Passu Indebtedness or Subordinated Indebtedness on any asset or property now
owned or hereafter acquired by the Company or any of its Restricted
Subsidiaries, or on any income or profits therefrom, or assign or convey any
right to receive income therefrom to secure any Pari Passu Indebtedness or
Subordinated Indebtedness, unless the Notes are equally and ratably secured
with the obligations so secured or until such time as such obligations are no
longer secured by a Lien; provided, that in any case involving a Lien securing
Subordinated Indebtedness, such Lien is subordinated to the Lien securing the
Notes to the same extent that such Subordinated Indebtedness is subordinated to
the Notes.
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Indentures provide that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries (1) on
its Capital Stock or (2) with respect to any other interest or participation
in, or measured by, its profits, or (b) pay any indebtedness owed to the
Company or any of its Restricted Subsidiaries, (ii) make loans or advances to
the Company or any of its Restricted Subsidiaries or (iii) sell, lease or
transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on the date of the
Indentures, (b) the Credit Agreement and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, provided that the Credit Agreement and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings thereof are no more restrictive taken as a whole
with respect to such dividend and other payment restrictions than those terms
described in an exhibit to the Indentures, (c) the Indentures and the Notes,
(d) applicable law, (e) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such Indebtedness
was incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties
or assets of any Person, other than the Person, or the property or assets of
the Person, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms f the Indentures to be incurred, (f) by
reason of customary non-assignment or net worth provisions in leases and other
agreements entered into in the ordinary course of business and consistent with
past practices, (g) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described in
clause (iii) above on the property so acquired, (h) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced,
(i) other Indebtedness permitted to be incurred subsequent to the date of the
Indentures pursuant to the provisions of the covenant described under " --
Incurrence of Indebtedness and Issuance of Disqualified Stock," provided that
any such restrictions are customary with respect to the type of Indebtedness
being incurred (under the relevant circumstances), (j) any Mortgage Financing
or Mortgage Refinancing that imposes restrictions on the real property securing
such Indebtedness, (k) any Permitted Investment, (l) contracts for the sale of
assets, including, without limitation customary restrictions with respect to a
Restricted Subsidiary of the Company pursuant to an agreement that has been
entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary or (m) customary
provisions in joint venture agreements and other similar agreements.
Merger, Consolidation or Sale of All or Substantially All Assets
The Indentures provide that the Company may not consolidate or merge with
or into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
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consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia; (ii) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Notes, the Indentures and the Pledge and
Escrow Agreements (as defined in the Indentures) pursuant to supplemental
indentures in form reasonably satisfactory to the applicable Trustee; (iii)
immediately after such transaction no Default or Event of Default exists; and
(iv) except in the case of a merger of the Company with or into a Wholly Owned
Restricted Subsidiary of the Company, the Company or the entity or Person
formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made will, at the time of such transaction
and after giving pro forma effect thereto as if such transaction had occurred
at the beginning of the applicable four-quarter period, be permitted to incur
at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of the covenant described above
under the caption " -- Incurrence of Indebtedness and Issuance of Disqualified
Stock." Notwithstanding the foregoing clauses (iii) and (iv), (a) any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company and (b) the Company may merge with
an Affiliate incorporated solely for the purpose of reincorporating the Company
in another jurisdiction.
Transactions with Affiliates
The Indentures provide that the Company will not, and will not permit any
of its Restricted Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, 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 with an unrelated Person and (ii) the Company delivers to the
Trustees (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $5.0
million, a resolution of the Company's Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors (if there are
any disinterested members of the Board of Directors) and (b) with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, or with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million as to which there are no
disinterested members of the Board of Directors, an opinion as to the fairness
to the Holders of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing.
The foregoing provisions will not apply to the following: (i) transactions
between or among the Company and/or any of its Restricted Subsidiaries; (ii)
Restricted Payments or Permitted Investments permitted by the provisions of the
Indentures described above under " -- Restricted Payments;" (iii) the payment
of all fees, expenses and other amounts relating to the Acquisition; (iv) the
payment of reasonable and customary regular fees to, and indemnity provided on
behalf of, officers, directors, employees or consultants of the Company or any
Restricted Subsidiary of the Company; (v) the transfer or provision of
inventory, goods or services by the Company or any Restricted Subsidiary of the
Company in the ordinary course of business to any Restricted Subsidiary of the
Company on terms that are customary in the industry or consistent with past
practices; (vi) the execution of, or the performance by the Company or any of
its Restricted Subsidiaries of its obligations under the terms of, any
financial advisory, financing, underwriting or placement agreement or any other
agreement relating to investment banking or financing activities with Goldman
Sachs or any of its Affiliates including, without limitation, in connection
with acquisitions or divestitures, in each case to the extent that such
agreement was approved by a majority of the disinterested members of the Board
of Directors in good faith; (vii) payments, advances or loans to employees that
are approved by a majority of the disinterested members of the Board of
Directors of the Company in good faith; (viii) the performance of any agreement
as in effect as of the date of the Indentures or any amendment thereto or
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any transaction contemplated thereby (including pursuant to any amendment
thereto so long as any such amendment is not disadvantageous to the Holders of
the Notes in any material respect); (ix) the existence of, or the performance
by the Company or any of its Restricted Subsidiaries of its obligations under
the terms of, any stockholders agreement (including any registration rights
agreement or purchase agreement related thereto) to which it is a party as of
the date of the Indentures and any similar agreements which it may enter into
thereafter, provided, however, that the existence of, or the performance by the
Company or any of its Restricted Subsidiaries of obligations under, any future
amendment to any such existing agreement or under any similar agreement entered
into after the date of the Indentures shall only be permitted by this clause
(ix) to the extent that the terms of any such amendment or new agreement are
not otherwise disadvantageous to the Holders of the Notes in any material
respect; (x) transactions permitted by, and complying with, the provisions of
the covenant described under " -- Merger, Consolidation or Sale of All or
Substantially All Assets;" and (xi) transactions with suppliers or other
purchases or sales of goods or services, in each case in the ordinary course of
business (including, without limitation, pursuant to joint venture agreements)
and otherwise in compliance with the terms of the Indentures which are fair to
the Company or its Restricted Subsidiaries, in the reasonable determination of
a majority of the disinterested members of the Board of Directors of the
Company or an executive officer thereof, or are on terms at least as favorable
as might reasonably have been obtained at such time from an unaffiliated party.
Issuances of Guarantees of Indebtedness
The Indentures provide that the Company will not permit any Restricted
Subsidiary, directly or indirectly, to Guarantee or pledge any assets to secure
the payment of any other Indebtedness unless such Restricted Subsidiary either
(i) is a Guarantor, or (ii) simultaneously executes and delivers supplemental
indentures to the Indentures providing for the Guarantee of the payment of all
Obligations with respect to the Notes by such Restricted Subsidiary, which
Guarantee shall be senior to such Restricted Subsidiary's Guarantee of or
pledge to secure any other Indebtedness that constitutes Subordinated
Indebtedness and subordinated to such Restricted Subsidiary's Guarantee of or
pledge to secure any other Indebtedness that constitutes Senior Debt to the
same extent as the Notes are subordinated to Senior Debt. In addition, the
Indentures provide that (x) if the Company shall, after the date of the
Indentures, create or acquire any new First-Tier Subsidiary, then such newly
created or acquired First-Tier Subsidiary shall execute a Senior Subordinated
Guarantee and deliver an opinion of counsel in accordance with the terms of the
Indentures, (y) if any First-Tier Subsidiary shall, after the date of the
Indentures, create or acquire any new Second-Tier Subsidiary, then such newly
created or acquired Second-Tier Subsidiary shall execute a Senior Subordinated
Guarantee and deliver an opinion of counsel in accordance with the terms of the
Indentures and (z) if the Company shall (whether before or after the date of
the Indentures) create or acquire any new Subsidiary (other than a First-Tier
Subsidiary or Second-Tier Subsidiary) that becomes a guarantor under the Credit
Agreement, then such newly created or acquired Subsidiary shall execute a
Senior Subordinated Guarantee and deliver an opinion of counsel in accordance
with the terms of the Indentures. Notwithstanding the foregoing, any such
Senior Subordinated Guarantee shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon certain mergers,
consolidations, sales and other dispositions (including, without limitation, by
foreclosure) pursuant to the terms of the Indentures. See " -- Senior
Subordinated Guarantees." The form of such Senior Subordinated Guarantee is
attached as an exhibit to each of the Indentures.
Activities of Holdings
In addition to the restrictions set forth above, the Indentures provide
that Holdings may not (i) hold any assets or incur any Indebtedness or (ii)
engage in any business activities; except that Holdings may (x) hold all, but
not less than all, of the Capital Stock of the Company and (y) be a co-obligor
and/or guarantor with respect to Indebtedness if the Company is a primary
obligor or guarantor of such Indebtedness and the net proceeds of such
Indebtedness are lent to the Company or one or more of its Restricted
Subsidiaries.
Reports
The Indentures provide that, whether or not required by the rules and
regulations of the Commission, so long as any Notes are outstanding, the
Company will furnish to the Holders of Notes (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (ii) all
current reports that would be required to be filed with the
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Commission on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the
Commission, the Company will file a copy of all such information and reports
with the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to securities
analysts and prospective investors upon request. In addition, the Company and
the Guarantors have agreed that, for so long as any Notes remain outstanding,
they will furnish to the Holders of the Notes and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Events of Default and Remedies
The Indentures provide that each of the following constitutes an Event of
Default with respect to the Senior Subordinated Notes or the Senior
Subordinated Discount Notes, as the case may be: (i) default for 30 days in the
payment when due of interest, including Liquidated Damages, if any, on the
Notes (whether or not prohibited by the subordination provisions of the
Indentures); (ii) default in payment when due of the principal of or premium,
if any, on the Notes (whether or not prohibited by the subordination provisions
of the Indentures); (iii) failure by the Company for 30 days after notice from
either Trustee or the Holders of at least 25% in principal amount of the then
outstanding Senior Subordinated Notes or Senior Subordinated Discount Notes, as
the case may be, to comply with the provisions described under " -- Repurchase
at the Option of Holders -- Change of Control," " -- Certain Covenants --
Restricted Payments," " -- Certain Covenants -- Incurrence of Indebtedness and
Issuance of Disqualified Stock" or " -- Certain Covenants -- Merger,
Consolidation or Sale of All or Substantially All Assets;" (iv) failure by the
Company for 60 days after notice from either Trustee or the Holders of at least
25% in principal amount of the then outstanding Senior Subordinated Notes or
Senior Subordinated Discount Notes, as the case may be, to comply with any of
its other agreements in the Indentures or the Notes; (v) default under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indentures, which default results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness the maturity of which has been so accelerated, aggregates $25.0
million or more; (vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $25.0 million,
which judgments are not paid, discharged or stayed for a period of 60 days;
(vii) certain events of bankruptcy or insolvency with respect to the Company or
any of its Restricted Subsidiaries; (viii) failure by the Company to comply
with the provisions of the Pledge and Escrow Agreements; and (ix) except as
permitted by the Indentures, any Senior Subordinated Guarantee shall be held in
any judicial proceeding to be unenforceable or invalid or shall cease for any
reason to be in full force and effect (except by its terms) or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Senior Subordinated Guarantee.
If any Event of Default occurs and is continuing, any Trustee or the
Holders of at least 25% in principal amount of the then outstanding Senior
Subordinated Notes or Senior Subordinated Discount Notes, as the case may be,
may declare all the Senior Subordinated Notes or Senior Subordinated Discount
Notes, as the case may be, to be due and payable immediately. Upon such
declaration the principal, interest, premium, if any, and Liquidated Damages,
if any, shall be due and payable immediately; provided, however, that so long
as Senior Debt or any commitment therefor is outstanding under the Credit
Agreement, any such notice or declaration shall not be effective until the
earlier of (a) five Business Days after such notice is delivered to the
Representative for the Senior Bank Debt or (b) the acceleration of any
Indebtedness under the Credit Agreement. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, with respect to the Company, any Significant Restricted Subsidiary
or any group of Restricted Subsidiaries that, taken together, would constitute
a Significant Restricted Subsidiary, all outstanding Notes will become due and
payable without further action or notice. Holders of the Notes may not enforce
the Indentures or the Notes except as provided in the Indentures. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the applicable Trustee in its exercise of any
trust or power. Either Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest, including Liquidated
Damages, if any) if it determines that withholding notice is in their interest.
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In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the applicable Indenture, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law upon the acceleration of the Notes. If an Event of Default
occurs prior to March 15, 2001 by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Company with the intention of
avoiding the prohibition on redemption of the Notes prior to March 15, 2001,
then the premium specified in the applicable Indenture shall also become
immediately due and payable to the extent permitted by law upon the
acceleration of the Notes.
The Holders of a majority in aggregate principal amount of the Senior
Subordinated Notes or the Senior Subordinated Discount Notes, as the case may
be, then outstanding by notice to the applicable Trustee may on behalf of the
Holders of all of the Senior Subordinated Notes or the Senior Subordinated
Discount Notes, as the case may be, waive any existing Default or Event of
Default and its consequences under the applicable Indenture except a continuing
Default or Event of Default in the payment of interest, including Liquidated
Damages, if any, on, or the principal and premium, if any, of, the Senior
Subordinated Notes or the Senior Subordinated Discount Notes, as the case may
be.
The Company is required to deliver to each Trustee annually a statement
regarding compliance with the respective Indentures, and the Company is
required upon becoming aware of any Default or Event of Default, to deliver to
each Trustee a statement specifying such Default or Event of Default.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes, the Indentures or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Legal Defeasance and Covenant Defeasance
The Company may, at its option and at any time, elect to have all
obligations of the Company and the Guarantors discharged with respect to the
outstanding Senior Subordinated Notes and/or the outstanding Senior
Subordinated Discount Notes, as the case may be, and the Senior Subordinated
Guarantees ("Legal Defeasance") except for (i) the rights of Holders of
outstanding Notes to receive payments in respect of the principal of, premium,
if any, and interest, including Liquidated Damages, if any, on such Notes when
such payments are due from the trust referred to below, (ii) the Company's
obligations with respect to the Notes concerning issuing temporary Notes,
registration of Notes, mutilated, destroyed, lost or stolen Notes and the
maintenance of an office or agency for payment and money for security payments
held in trust, (iii) the rights, powers, trusts, duties and immunities of the
applicable Trustee, and the Company's obligations in connection therewith and
(iv) the Legal Defeasance provisions of the applicable Indenture. In addition,
the Company may, at its option and at any time, elect to have the obligations
of the Company and the Guarantors released with respect to certain covenants
that are described in the Senior Subordinated Note Indenture or the Senior
Subordinated Discount Note Indenture, and the Senior Subordinated Guarantees
("Covenant Defeasance") and thereafter any omission to comply with such
obligations shall not constitute a Default or Event of Default with respect to
the Senior Subordinated Notes or Senior Subordinated Discount Notes, as the
case may be, and the Senior Subordinated Guarantees. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under " -- Events
of Default and Remedies" will no longer constitute an Event of Default with
respect to the Senior Subordinated Notes or Senior Subordinated Discount Notes,
as the case may be, and the Senior Subordinated Guarantees.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company or the Guarantors must irrevocably deposit with the appropriate
Trustee, in trust, for the benefit of the Holders of the Senior Subordinated
Notes or Senior Subordinated Discount Notes, as the case may be, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm
of independent public accountants, to pay the principal of, premium, if any,
and interest, including Liquidated Damages, if any, on the outstanding Senior
Subordinated Notes or Senior Subordinated Discount Notes, as the case may be,
on the stated maturity or on the applicable redemption date, as the case may
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be, and the Company or the Guarantors must specify whether the Senior
Subordinated Notes or Senior Subordinated Discount Notes, as the case may be,
are being defeased to maturity or to a particular redemption date; (ii) in the
case of Legal Defeasance, the Company or the Guarantors shall have delivered to
the appropriate Trustee an opinion of counsel in the United States reasonably
acceptable to such Trustee confirming that (A) the Company or the Guarantors
have received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of the applicable Indenture, 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 of the outstanding Senior Subordinated Notes or Senior Subordinated
Discount Notes, as the case may be, will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal 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 Legal Defeasance had not
occurred; (iii) in the case of Covenant Defeasance, the Company or the
Guarantors shall have delivered to the appropriate Trustee an opinion of
counsel in the United States reasonably acceptable to such Trustee confirming
that the Holders of the outstanding, Senior Subordinated Notes or Senior
Subordinated Discount Notes, as the case may be, 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; (iv) no Default or Event of Default shall
have occurred and be continuing on the date of such deposit (other than a
Default or Event of Default resulting from the borrowing of funds to be applied
to such deposit) or insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day after
the date of deposit; (v) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than the applicable Indenture) to which the
Company or any of its Restricted Subsidiaries is a party or by which the
Company or any of its Restricted Subsidiaries is bound; (vi) the Company or the
Guarantors must have delivered to the appropriate Trustee an opinion of counsel
to the effect that after the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; (vii) the
Company or the Guarantors must deliver to the appropriate Trustee an Officers'
Certificate stating that the deposit was not made by the Company or the
Guarantors, as applicable, with the intent of preferring the Holders of Senior
Subordinated Noes or Senior Subordinated Discount Notes, as the case may be,
over the other creditors of the Company or the Guarantors, as applicable, with
the intent of defeating, hindering, delaying or defrauding creditors of the
Company or the Guarantors, as applicable, or others; and (viii) the Company or
the Guarantors must deliver to the appropriate Trustee an Officers' Certificate
and an opinion of counsel, each stating that all conditions precedent provided
for or relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
Transfer and Exchange
A Holder may transfer or exchange Notes in accordance with the Indentures.
The Registrars and the Trustees may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indentures. The Company is not required to transfer or exchange any Note
selected for redemption. Also, the Company is not required to transfer or
exchange any Note for a period of 15 days before a selection of Notes to be
redeemed.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
Book-Entry, Delivery and Form
The Notes initially issued in exchange for the Original Notes generally
were represented by one or more fully-registered global notes (collectively,
the "Global Note"). Notwithstanding the foregoing, Original Notes held in
certificated form were exchanged solely for new Notes in certificated form, as
discussed below. The Global Note was deposited, upon issuance, with The
Depository Trust Company (the "Depository") and registered in the name of the
Depository or a nominee of the Depository (the "Global Note Registered Owner").
Except as set forth below, the Global Note may be transferred, in whole and not
in part, only to another nominee of the Depository or to a successor of the
Depository or its nominee.
The Depository is a limited-purpose trust company that was created to hold
securities for its participating organizations (collectively, the
"Participants" or the "Depository's Participants") and to facilitate the
clearance and settlement of transactions in such securities between
Participants through electronic book-entry changes in accounts
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of its Participants. The Depository's Participants include securities brokers
and dealers, banks and trust companies, clearing corporations and certain other
organizations. Access to the Depository's system is also available to other
entities such as banks, brokers, dealers and trust companies (collectively, the
"Indirect Participants" or the "Depository's Indirect Participants") that clear
through or maintain a custodial relationship with a Participant, either
directly or indirectly. Persons who are not Participants may beneficially own
securities held by or on behalf of the Depository only through the Depository's
Participants or the Depository's Indirect Participants. The ownership interest
and transfer of ownership interest of each actual purchaser of each security
held by or on behalf of the Depository are recorded on the records of the
Participants and Indirect Participants.
The Depository has also advised the Issuers that pursuant to procedures
established by it, (i) upon deposit of the Global Note, the Depository credited
the accounts of Participants designated by the Exchange Agent with portions of
the principal amount of the Global Note and (ii) ownership of such interests in
the Global Note is shown on, and the transfer of ownership thereof may be
effected only through, records maintained by the Depository (with respect to
the Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Note). The laws
of some states require that certain persons take physical delivery in
definitive form of securities that they own. Consequently, the ability to
transfer Notes is limited to that extent.
Except as described below, owners of interests in the Global Note do not
have Notes registered in their names, do not receive physical delivery of Notes
in definitive form and are not considered the registered owners or holders
thereof under the Indentures for any purpose.
Payments in respect of the principal of and premium, if any, and interest
on any Notes registered in the name of the Global Note Registered Owner is
payable by the Trustees to the Global Note Registered Owner in its capacity as
the registered Holder under the Indentures. Under the terms of the Indentures,
the Company and the Trustees treat the persons in whose names the Notes,
including the Global Note, are registered for the purpose of receiving such
payments and for any and all other purposes whatsoever. Consequently, neither
the Company, the Trustees nor any agent of the Company or the Trustees has or
will have any responsibility or liability for (i) any aspect of the
Depository's records or any Participant's records relating to or payments made
on account of beneficial ownership interests in the Global Note, or for
maintaining, supervising or reviewing any of the Depository's records or any
Participant's records relating to the beneficial ownership interests in the
Global Note or (ii) any other matter relating to the actions and practices of
the Depository or any of its Participants. The Depository has advised the
Issuers that its current practice, upon receipt of any payment in respect of
securities such as the Notes (including principal and interest), is to credit
the accounts of the relevant Participants with the payment on the payment date,
in amounts proportionate to their respective holdings in principal amount of
beneficial interests in the relevant security as shown on the records of the
Depository unless the Depository has reason to believe it will not receive
payment on such payment date. Payments by the Participants and the Indirect
Participants to the beneficial owners of Notes are governed by standing
instructions and customary practices and are the responsibility of the
Participants or the Indirect Participants and not the responsibility of the
Depository, the Trustees or the Company. Neither the Company nor the Trustees
is liable for any delay by the Depository or any of its Participants in
identifying the beneficial owners of the Notes, and the Company and the
Trustees may conclusively rely on and will be protected in relying on
instructions from the Global Note Registered Owner for all purposes.
The Global Note is exchangeable for definitive Notes if (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
of the Global Note and the Company thereupon fails to appoint a successor
Depository, (ii) the Company, at its option, notifies the Trustees in writing
that it elects to cause the issuance of the Notes in definitive registered
form, (iii) there shall have occurred and be continuing an Event of Default or
any event which after notice or lapse of time or both would be an Event of
Default with respect to the Notes or (iv) as provided in the following
paragraph. Such definitive Notes shall be registered in the names of the owners
of the beneficial interests in the Global Note as provided by the Participants.
Notes issued in definitive form will be in fully registered form, without
coupons, in minimum denominations of $1,000 and integral multiples thereof.
Upon issuance of Notes in definitive form, the Trustees are required to
register the Notes in the name of, and cause the Notes to be delivered to, the
person or persons (or the nominee thereof) identified as the beneficial owners
as the Depository shall direct.
A Note in definitive form will be issued upon the resale, pledge or other
transfer of any Note or interest therein to any person or entity that does not
participate in the Depository. Transfers of certificated Notes may be made
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only by presentation of Notes, duly endorsed, to the Trustees for registration
of transfer on the Note Register maintained by the Trustees for such purposes.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
Certificated Securities
Subject to certain conditions, any person having a beneficial interest in
the Global Notes may, upon request to the appropriate Trustee, exchange such
beneficial interest for Notes evidenced by registered, definitive certificates
("Certificated Securities"). Upon any such issuance, the appropriate Trustee is
required to register such Certificated Securities in the name of, and cause the
same to be delivered to, such person or persons (or the nominee of any
thereof). In addition, if (i) the Company notifies the appropriate Trustee in
writing that the Depository is no longer willing or able to act as a depositary
and the Company is unable to locate a qualified successor within 90 days or
(ii) the Company, at its option, notifies the appropriate Trustee in writing
that it elects to cause the issuance of Notes in the form of Certificated
Securities under the applicable Indenture, then, upon surrender by the Global
Note Registered Owner of its Global Notes, Notes in such form will be issued to
each person that the Global Note Registered Owner and the Depository identify
as being the beneficial owner of the related Notes.
Neither the Company nor the Trustees will be liable for any delay by the
Global Note Registered Owner or the Depository in identifying the beneficial
owners of Notes and the Company and the Trustees may conclusively rely on, and
will be protected in relying on, instructions from the Global Note Registered
Owner or the Depository for all purposes.
Amendment, Supplement and Waiver
Except as provided in the next two succeeding paragraphs, the Indentures
and the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Senior Subordinated Notes or
Senior Subordinated Discount Notes, as the case may be, then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, such Notes), and any existing
default or compliance with any provision of the Indentures or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Senior Subordinated Notes or Senior Subordinated Discount
Notes, as the case may be (including consents obtained in connection with a
tender offer or exchange offer for such Notes).
Without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder): (i) reduce the
principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or change the fixed maturity
of any Note or alter the provisions with respect to the redemption of the Notes
(other than provisions relating to the covenants described above under " --
Repurchase at the Option of Holders"), (iii) reduce the rate of or change the
time for payment of interest, including Liquidated Damages, if any, on any
Note, (iv) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest, including Liquidated Damages, if any, on the
Notes (except a rescission of acceleration of the Senior Subordinated Notes or
Senior Subordinated Discount Notes, as the case may be, by the Holders of at
least a majority in aggregate principal amount thereof and a waiver of the
payment default that resulted from such acceleration), (v) make any Note
payable in money other than that stated in the Notes, (vi) make any change in
the provisions of the Indentures relating to waivers of past Defaults or the
rights of Holders of Notes to receive payments of principal of or premium, if
any, or interest, including Liquidated Damages, if any, on the Notes, (vii)
waive a redemption payment with respect to any Note (other than a payment
required by one of the covenants described above under " -- Repurchase at the
Option of Holders") or (viii) make any change in the foregoing amendment and
waiver provisions.
Notwithstanding the foregoing, without the consent of any Holder, the
Company and the appropriate Trustee may amend or supplement the Indentures or
the Notes to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of Notes in
the case of a merger or consolidation, to make any change that would provide
any additional rights or benefits to the Holders of Notes or that does not
adversely affect the legal rights
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under the Indentures of any such Holder, or to comply with requirements of the
Commission in order to effect or maintain the qualification of the Indentures
under the Trust Indenture Act.
Concerning the Trustee
The Indentures contain certain limitations on the rights of the Trustees,
should either Trustee become a creditor of the Company, to obtain payment of
claims in certain cases, or to realize on certain property received in respect
of any such claim as security or otherwise. The Trustees will be permitted to
engage in other transactions; however, if either Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the Commission for permission to continue or resign.
The Holders of a majority in principal amount of the then outstanding
Senior Subordinated Notes or Senior Subordinated Discount Notes, as the case
may be, will have the right to direct the time, method and place of conducting
any proceeding for exercising any remedy available to the applicable Trustee,
subject to certain exceptions. The Indentures provide that in case an Event of
Default shall occur (which shall not be cured), the Trustees will be required,
in the exercise of their power, to use the degree of care of a prudent man in
the conduct of his own affairs. Subject to such provisions, neither Trustee
will be under any obligation to exercise any of its rights or powers under the
Indentures at the request of any Holder, unless such Holder shall have offered
to the appropriate Trustee security and indemnity satisfactory to it against
any loss, liability or expense.
Certain Definitions
Set forth below are certain defined terms used in the Indentures.
Reference is made to the Indentures for a full disclosure of all such terms, as
well as any other capitalized terms used herein for which no definition is
provided.
"Accreted Value" means, as of any date of determination prior to the Full
Accretion Date, the sum of (a) the initial offering price of each Senior
Subordinated Discount Note and (b) the portion of the excess of the principal
amount of each Senior Subordinated Discount Note over such initial offering
price which shall have been accreted thereon through such date, such amount to
be so accreted on a daily basis at 12- 1/4% per annum of the initial offering
price of the Senior Subordinated Discount Notes, compounded semi-annually on
each March 15 and September 15 from the date of issuance of the Senior
Subordinated Discount Notes through the date of determination; provided that on
and after the Full Accretion Date the Accreted Value shall be equal to the
principal amount of the outstanding Senior Subordinated Discount Note.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured
by a Lien encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling,""controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"AMF" means the AMF worldwide bowling businesses, including AMF Bowling
Products, Inc., AMF Bowling Centers Inc., the AMF worldwide bowling centers and
their subsidiaries.
"Asset Sale" means:
(i) the sale, conveyance, transfer or other disposition (whether in a
single transaction or a series of related transactions) of property or
assets (including by way of a sale and leaseback) of the Company or any
Restricted Subsidiary (each referred to in this definition as a
"disposition") or
(ii) the issuance or sale of Equity Interests of any Restricted
Subsidiary (whether in a single transaction or a series of related
transactions),
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in each case, other than:
(a) a disposition of Cash Equivalents or goods held for sale in the
ordinary course of business or obsolete equipment in the ordinary course
of business consistent with past practices of the Company;
(b) the disposition of all or substantially all of the assets of the
Company in a manner permitted pursuant to the provisions described above
under the covenant entitled " -- Certain Covenants -- Merger,
Consolidation or Sale of All or Substantially All Assets" or any
disposition that constitutes a Change of Control pursuant to the
Indentures;
(c) any disposition that is a Restricted Payment or Permitted Investment
that is permitted under the covenant described above under " -- Certain
Covenants -- Restricted Payments;"
(d) any disposition, or related series of dispositions, of assets with an
aggregate fair market value of less than $2.5 million;
(e) any sale of Equity Interest in, or Indebtedness or other securities
of, an Unrestricted Subsidiary; and
(f) foreclosures on assets.
"Credit Agreement" means the credit agreement to be entered into by and
among the Company and the financial institutions party thereto providing a
portion of the financing for the Acquisition, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced (in whole or in part) from time to time.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof, (iii) certificates of deposit and
eurodollar time deposits with maturities of one year or less from the date of
acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case with any domestic bank having capital and
surplus in excess of $500.0 million and a Keefe Bank Watch Rating of "B" or
better, (iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications
specified in clause (iii) above and (v) commercial paper having the highest
rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's
Corporation and in each case maturing within one year after the date of
acquisition.
"Change of Control" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of
transactions, of all or substantially all of the assets of the Company
and its Restricted Subsidiaries, taken as a whole, to any "person" (as
such term is used in Section 13(d)(3) of the Exchange Act) other than
the Permitted Holders and their Related Parties;
(ii) the Company becomes aware (by way of a report or any other filing
pursuant to Section 13(d) of the Exchange Act, proxy, vote, written
notice or otherwise) of the acquisition by any Person or group (within
the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act,
or any successor provision), including any group acting for the purpose
of acquiring, holding or disposing of securities (within the meaning of
Rule 13d-5(b)(1) under the Exchange Act), other than the Permitted
Holders or any of their Related Parties, in a single transaction or in a
related series of transactions, by way of merger, consolidation or other
business combination or purchase of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act, or any successor
provision) of 50% or more of the Voting Stock of the Company or
Holdings, and beneficially owns more of such Voting Stock than the
Permitted Holders and their Related Parties; or
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(iii) a majority of the members of the Board of Directors of the
Company cease to be Continuing Directors.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with
an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes was deducted in computing such
Consolidated Net Income, plus (iii) consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
and whether or not capitalized (including, without limitation, amortization of
original issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging Obligations), to the
extent that any such expense was deducted in computing such Consolidated Net
Income, plus (iv) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash charges
(excluding any such non-cash charge to the extent that it represents an accrual
of or reserve for cash charges in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash charges were deducted in computing such
Consolidated Net Income.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) for such period of
any Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a Wholly
Owned Restricted Subsidiary thereof, (ii) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders, (iii) the Net Income of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded, (iv) the cumulative effect of a
change in accounting principles shall be excluded and (v) the Net Income of any
Unrestricted Subsidiary shall be excluded, whether or not distributed to the
Company or one of its Restricted Subsidiaries.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors who (i) was a member of such Board of Directors on
the date of the Indentures or (ii) was nominated for election or elected to
such Board of Directors with, or whose election to such Board of Directors was
approved by, the affirmative vote of a majority of the Continuing Directors who
were members of such Board of Directors at the time of such nomination or
election or (iii) is any designee of the Permitted Holders or their Affiliates
or was nominated by the Permitted Holders or their Affiliates or any designees
of the Permitted Holders or their Affiliates on the Board of Directors.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date on which the Notes mature.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Agent" means the exchange agent that acted in connection with
the exchange of the Original Notes for the Notes.
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"Existing Indebtedness" means Indebtedness of AMF and its Restricted
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date of the Indentures, until such amounts are repaid.
"First-Tier Subsidiaries" means each of the Subsidiaries directly owned by
the Company.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues Preferred Stock
subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated but prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee or redemption
of Indebtedness, or such issuance or redemption of Preferred Stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period. In addition, for purposes of making the computation referred to above,
(i) acquisitions that have been made by the Company or any of its Restricted
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation Date
shall be deemed to have occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period shall be calculated
(A) without giving effect to clause (iii) of the proviso set forth in the
definition of Consolidated Net Income and (B) subject to clause (ii) of the
definition of "Consolidated Net Income," by treating a portion of the
consolidated revenue for such period of any acquired entity that derives at
least 90% of its revenues from the ownership and operation of bowling centers
as Consolidated Cash Flow of such entity, regardless of the actual operating
results of such entity, such portion being the percentage of the consolidated
revenues of the Company's domestic bowling center operations that constituted
Consolidated Cash Flow for the most recently ended four full fiscal quarters
for which internal financial statements are available and (ii) the Consolidated
Cash Flow attributable to discontinued operations, as determined in accordance
with GAAP, and operations or businesses disposed of prior to the Calculation
Date, shall be excluded, and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.
"Fixed Charges" means, with respect to any Person for any period, the sum
of (i) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations) and (ii) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such period,
and (iii) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such Person or one of its Restricted Subsidiaries (whether or
not such Guarantee or Lien is called upon) and (iv) the product of (a) all cash
dividend payments (and non-cash dividend payments in the case of a Person that
is a Restricted Subsidiary) paid to any Person other than the Company or a
Restricted Subsidiary on any series of Preferred Stock of such Person, times
(b) a fraction, the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local statutory tax rate
of such Person paying the dividend, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the Indentures.
"Government Securities" means securities that are (a) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (b) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States of America
the timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either
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case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such
Government Security or a specific payment of principal of or interest on any
such Government Security held by such custodian for the account of the holder
of such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the custodian
in respect of the Government Security or the specific payment of principal of
or interest on the Government Security evidenced by such depository receipt.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means each of (i) Holdings, (ii) each of the First-Tier
Subsidiaries, (iii) each of the Second-Tier Subsidiaries and (iv) any other
Restricted Subsidiary of the Company that executes a Senior Subordinated
Guarantee in accordance with the provisions of the Indentures, and, in each
case, their respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) currency exchange or interest rate swap agreements,
currency exchange or interest rate cap agreements and currency exchange or
interest rate collar agreements and (ii) other agreements or arrangements
designed to protect such Person against fluctuations in currency exchange or
interest rates.
"Holder" means a holder of any of the Notes.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable,
if and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, as well as all
indebtedness of others secured by a Lien on any asset of such Person (whether
or not such indebtedness is assumed by such Person) and, to the extent not
otherwise included, the Guarantee by such Person of any indebtedness of any
other Person.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP; provided that
an acquisition of Equity Interests or other securities by the Company for
consideration consisting of common equity securities of the Company shall not
be deemed to be an Investment. If the Company or any Subsidiary of the Company
sells or otherwise disposes of any Equity Interests of any direct or indirect
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, the Company no longer owns, directly or indirectly, greater than
50% of the outstanding Equity Interests of such Subsidiary, the Company shall
be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Subsidiary not sold or disposed of.
"Joint Ventures" means all corporations, partnerships, associations or
other business entities (i) that are engaged in a Principal Business and (ii)
of which 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by the Company or one or more Restricted Subsidiaries
(or a combination thereof).
"Letter of Credit Obligations" means all Obligations in respect of
Indebtedness of the Company or any of its Restricted Subsidiaries with respect
to letters of credit issued pursuant to the Credit Agreement which Indebtedness
shall be deemed to consist of (a) the aggregate maximum amount then available
to be drawn under all such
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letters of credit (the determination of such maximum amount to assume
compliance with all conditions for drawing), and (b) the aggregate amount that
has then been paid by, and not reimbursed to, the issuers under such letters of
credit.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant to
the registration rights agreement, dated as of March 21, 1996, by and among the
Company and the other parties named on the signature pages thereof, as the same
may be amended, modified or supplemented from time to time.
"Mortgage Financing" means the incurrence by the Company or a Restricted
Subsidiary of the Company of any Indebtedness secured by a mortgage or other
Lien on real property acquired or improved by the Company or any Restricted
Subsidiary of the Company after the date of the Indentures.
"Mortgage Refinancing" means the incurrence by the Company or a Restricted
Subsidiary of the Company of any Indebtedness secured by a mortgage or other
Lien on real property subject to a mortgage or other Lien existing on the date
of the Indentures or created or incurred subsequent to the date of the
Indentures as permitted by the terms of the Indentures and owned by the Company
or any Restricted Subsidiary of the Company.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain
(but not loss), together with any related provision for taxes on such
extraordinary or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and brokerage and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness (other than Senior Bank Debt) secured by a Lien
on the asset or assets that were the subject of such Asset Sale and any reserve
for adjustment in respect of the sale price of such asset or assets established
in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness of an Unrestricted Subsidiary (i)
as to which neither the Company nor any of its Restricted Subsidiaries (a)
provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable (as a guarantor or otherwise), or (c) constitutes the lender; and (ii)
no default with respect to which (including any rights that the holders thereof
may have to take enforcement action against an Unrestricted Subsidiary) would
permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness 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.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers' Certificate" means a certificate signed on behalf of the
Company, by two officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements set
forth in the Indentures.
"Pari Passu Indebtedness" means indebtedness which ranks pari passu in
right of payment to the Notes.
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"Permitted Asset Swap" means any one or more transactions in which the
Company or any of its Restricted Subsidiaries exchanges assets for
consideration consisting of cash and/or assets that are used or useful in a
Principal Business and/or a controlling equity interest in a Person engaged in
a Principal Business.
"Permitted Holders" means Goldman, Sachs & Co. and any of its Affiliates.
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company; (b) any Investment in cash and Cash
Equivalents; (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (A) such Person
becomes a Restricted Subsidiary of the Company or (B) such Person, in one
transaction or a series of related transactions, is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary of the
Company; (d) any Investment made as a result of the receipt of consideration
not constituting cash or Cash Equivalents from an Asset Sale that was made
pursuant to and in compliance with the covenant described above under " --
Repurchase at the Option of Holders -- Asset Sales;" (e) any Investment
existing on the date of the Indentures; (f) Permitted Asset Swaps; (g) any
Investment by Restricted Subsidiaries in other Restricted Subsidiaries and
Investments by Subsidiaries that are not Restricted Subsidiaries in other
Subsidiaries that are not Restricted Subsidiaries; (h) advances to employees
not in excess of $5.0 million outstanding at any one time; (i) any Investment
acquired by the Company or any of its Restricted Subsidiaries (A) in exchange
for any other Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or accounts receivable or (B) as a result of a foreclosure by the
Company or any of its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any secured Investment in
default; (j) Hedging Obligations; (k) loans and advances to officers, directors
and employees for business-related travel expenses, moving expenses and other
similar expenses, in each case incurred in the ordinary course of business; (l)
Investments the payment for which consists exclusively of Equity Interests
(exclusive of Disqualified Stock) of the Company; and (m) additional
Investments having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (m) that are at that time
outstanding, not to exceed 5% of Total Assets at the time of such Investment
(with the fair market value of each Investment being measured at the time made
and without giving effect to subsequent changes in value).
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
in whole or in part; provided that: (i) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing Indebtedness does not
exceed the principal amount (or accreted value, if applicable) of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of reasonable expenses incurred in connection therewith); (ii)
such Permitted Refinancing Indebtedness has a final maturity date later than
the final maturity date of, and has a Weighted Average Life to Maturity equal
to or greater than the Weighted Average Life to Maturity of, the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; (iii) if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either
by the Company or by the Restricted Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Stock" means any Equity Interest with preferential right of
payment of dividends or upon liquidation, dissolution, or winding-up.
"Principal Business" means (i) the design, manufacture and sale of bowling
and bowling center equipment and allied products, including without limitation,
pinspotters, scoring equipment, masking panels, seating, lane maintenance
machines, bumper bowling systems, electronic foul detectors, back office
support systems, bowling pins, wood and synthetic lanes, ball returns, ball
lifts, ball cleaners, other equipment used to equip or outfit a
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bowling center, spare and replacement parts, maintenance equipment and
supplies, bowling balls, bags, shoes, shirts, pool and billiard tables and
cues, shuffleboard and other gaming tables, and any other equipment and
products used or useful in the operation of bowling centers, (ii) the ownership
and operation of bowling centers, in the United States and throughout the
world, including without limitation bowling operations, shoe rental, food and
beverage sales and services, operation of lounges and bars at or within a
bowling center (including without limitation sales and service of alcoholic
beverages and provision of music and cabaret activities), operation of pro
shops (including without limitation sales and service of merchandise),
billiards and other table games, video and arcade games, play centers, movie
viewing, gaming activities, such as Pull-Tab, lottery, video poker and keno,
and any other activities which are or may become associated with bowling
centers, and (iii) any activity or business incidental, directly related or
similar to those set forth in clauses (i) or (ii) of this definition, or any
business or activity that is a reasonable extension, development or expansion
thereof or ancillary thereto.
"Related Parties" means any Person controlled by the Permitted Holders,
including any partnership of which any of the Permitted Holders or their
Affiliates is a general partner.
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not (i) an Unrestricted Subsidiary or (ii) a direct or indirect
Subsidiary of an Unrestricted Subsidiary; provided, however, that upon the
occurrence of any Unrestricted Subsidiary ceasing to be an Unrestricted
Subsidiary, such Subsidiary shall be included in the definition of Restricted
Subsidiary.
"Second-Tier Subsidiaries" means each of the Subsidiaries directly owned
by the First-Tier Subsidiaries.
"Senior Guarantees" means the Guarantees by the Guarantors of Obligations
under the Credit Agreement.
"Senior Subordinated Guarantees" means the Guarantees by the Guarantors of
the Obligations under the Indentures and the Notes.
"Significant Restricted Subsidiary" means any Restricted Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Act, as such Regulation is in
effect on the date of the Indentures.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
of its Restricted Subsidiaries which is expressly by its terms subordinated in
right of payment to any other Indebtedness.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Total Assets" means, with respect to any Person, the total consolidated
assets of such Person and its Restricted Subsidiaries, as shown on the most
recent balance sheet of such Person.
"Unrestricted Subsidiary" means (i) any Subsidiary (other than the
Guarantors or any successor to any of them) that is designated by the Board of
Directors as an Unrestricted Subsidiary pursuant to a Board Resolution; but
only to the extent that such Subsidiary: (a) has no Indebtedness other than
Non-Recourse Debt; (b) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; (c) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; (d) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any
of its Restricted Subsidiaries; and (e) has at least one director on its board
of directors that is not a director or executive officer of the Company or any
of its Restricted Subsidiaries and has
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at least one executive officer that is not a director or executive officer of
the Company or any of its Restricted Subsidiaries. Any such designation by the
Board of Directors shall be evidenced to the Trustees by filing with the
Trustees a certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions and was permitted by the covenant
described above under " -- Certain Covenants -- Restricted Payments." If, at
any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of the Indentures and any Indebtedness of
such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
the Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under the covenant described under " -- Certain
Covenants -- Incurrence of Indebtedness and Issuance of Disqualified Stock,"
the Company shall be in default of such covenant). The Board of Directors of
the Company may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (i) such Indebtedness is permitted under the
covenant described under " -- Certain Covenants -- Incurrence of Indebtedness
and Issuance of Disqualified Stock," and (ii) no Default or Event of Default
would be in existence following such designation.
"Voting Stock" means, with respect to any Person, any class or series of
capital stock of such Person that is ordinarily entitled to vote in the
election of directors thereof at a meeting of stockholders called for such
purpose, without the occurrence of any additional event or contingency.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" is any Wholly Owned Subsidiary that
is a Restricted Subsidiary.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
43
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DESCRIPTION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain material United States ("U.S.")
federal income tax consequences relevant to the purchase, ownership and
disposition of Notes as of the date hereof. Unless otherwise indicated, this
summary deals only with United States Holders who hold such Notes as capital
assets. The following discussion does not purport to deal with all aspects of
U.S. federal income taxation that may be relevant to such holders, nor does it
address U.S. federal income tax consequences which may be relevant to certain
types of holders, such as dealers in securities or currencies, financial
institutions, life insurance companies, persons holding Notes as a part of a
hedging or conversion transaction or a straddle or United States Holders whose
"functional currency" is not the U.S. dollar, that are subject to special
treatment under the Internal Revenue Code of 1986, as amended (the "Code").
Furthermore, the discussion below is based upon the provisions of the Code, and
regulations, rulings and judicial decisions thereunder as of the date hereof,
and such authorities may be repealed, revoked or modified so as to result in
U.S. federal income tax consequences different from those discussed below.
Persons considering the purchase, ownership or disposition of exchange notes
should consult their own tax advisors concerning the U.S. federal income tax
consequences in light of their particular situations as well as any
consequences arising under the laws of any state, local or international taxing
jurisdiction.
As used herein, a "United States Holder" of a Note means a Holder that is
a citizen or resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, an estate the income of which is subject to
United States federal income taxation regardless of its source or a trust if a
court within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust. A "Non-United
States Holder" is any Holder that is not a United States Holder.
United States Holders
Payments of Interest and Original Issue Discount
Senior Subordinated Notes. Interest on a Senior Subordinated Note
generally will be taxable to a United States Holder as ordinary income at the
time it is paid or accrued in accordance with the United States Holder's method
of accounting for tax purposes.
Senior Subordinated Discount Notes. For federal income tax purposes, the
exchange of original Senior Subordinated Discount Notes for new Senior
Subordinated Discount Notes will not be considered to have altered the tax
consequences of ownership of Senior Subordinated Discount Notes. Therefore, the
Senior Subordinated Discount Notes will be considered to have been issued with
original issue discount ("OID") within the meaning of Section 1273(a) of the
Code. The amount of such OID equaled the difference between (i) the sum of all
amounts payable on the Senior Subordinated Discount Notes (including the
interest payable on such debentures) and (ii) the "issue price" of the Senior
Subordinated Discount Notes. The "issue price" of the Senior Subordinated
Discount Notes was the first price at which a substantial amount of the Senior
Subordinated Discount Notes was sold (excluding sales to bond houses, brokers
or similar persons acting in the capacity of underwriter, placement agent or
wholesaler).
A United States Holder of the Senior Subordinated Discount Notes must
include such OID in income on an economic accrual basis (using the constant
yield method of accrual described in Section 1272(a) of the Code) and in
advance of the receipt of the cash to which such OID is attributable,
regardless of such Holder's method of tax accounting. Under that method, a
United States Holder generally will have to include in income increasingly
greater amounts of OID in successive accrual periods. The Company is required
to provide information returns stating the amount of OID accrued on Senior
Subordinated Discount Notes held of record by persons other than corporations
and other exempt holders.
Since the yield-to-maturity on the Senior Subordinated Discount Notes
exceeds the sum of (x) the "applicable federal rate" (as determined under
Section 1274(d) of the Code) in effect for the month in which the Senior
Subordinated Discount Notes were issued (the "AFR") and (y) 5%, the Senior
Subordinated Discount Notes are considered "applicable high yield discount
obligations" under Section 163(i) of the Code. As a result, the Company will
not be allowed to take a deduction for interest (including OID) accrued on the
Senior Subordinated Discount Notes for U.S. federal income tax purposes until
such time as the Company actually pays such interest (including OID) in cash or
in other property (other than stock or debt of the Company or a person deemed
to be related to the Company under Section 453(f)(1) of the Code).
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Since the yield-to-maturity on the Senior Subordinated Discount Notes
exceeds the sum of (x) the AFR and (y) 6% (such excess shall be referred to
hereinafter as the "Disqualified Yield"), the deduction for interest (including
OID) accrued on the Senior Subordinated Discount Notes will be permanently
disallowed (regardless of whether the Company actually pays such interest or
OID in cash or in other property) for U.S. federal income tax purposes to the
extent (approximately 0.27%) such interest or OID is attributable to the
Disqualified Yield on the Senior Subordinated Discount Notes
("Dividend-Equivalent Interest"). For purposes of the dividends-received
deduction, such Dividend-Equivalent Interest will be treated as a dividend to
the extent it is deemed to have been paid out of the Company's current or
accumulated earnings and profits. Accordingly, a United States Holder of a
Senior Subordinated Discount Note that is a corporation may be entitled to take
a dividends-received deduction with respect to any Dividend-Equivalent Interest
received by such corporate holder on such Senior Subordinated Discount Note.
Acquistion Premium
Senior Subordinated Notes. If a United States Holder acquires a Senior
Subordinated Note for an amount more than its redemption price, the Holder may
elect to amortize such bond premium on a yield to maturity basis.
Senior Subordinated Discount Notes. A United States Holder who acquires a
Senior Subordinated Discount Note for an amount less than the sum of all
amounts payable after the purchase date but greater than its "adjusted issue
price" immediately before such purchase will be considered to have purchased
such Senior Subordinated Discount Note at an "acquisition premium." The
"adjusted issue price" is equal to the instrument's issue price increased by
all previously accrued OID and reduced by the amount of all previous payments.
Under the acquisition premium rules of the Code, the amount of OID which such
United States Holder must include in its gross income with respect to such
Senior Subordinated Discount Note for any taxable year will be reduced by the
portion of such acquisition premium properly allocable to such year.
Market Discount
A purchase of a Note in a subsequent resale may be affected by the market
discount provisions of the Code. These rules generally provide that subject to
a statutorily defined de minimis exception, if a United States Holder purchases
a Note (or purchased a Note) at a "market discount,"as defined below, and
thereafter recognizes gain upon a disposition of the Note (including
dispositions by gift or redemption), the lesser of such gain (or appreciation,
in the case of gift) or the portion of the market discount that has accrued
("accrued market discount") while the Note (and its predecessor Note, if any)
was held by such United States Holder will be treated as ordinary interest
income at the time of disposition rather than as capital gain. For a new Senior
Subordinated Note or an original Senior Subordinated Note, "market discount" is
the excess of the stated redemption price at maturity over the tax basis
immediately after its acquisition by a United States Holder. For a new Senior
Subordinated Discount Note or an original Senior Subordinated Discount Note,
"market discount" is the excess of the adjusted issue price of the new Senior
Subordinated Discount Note or the original Senior Subordinated Discount Note
over its tax basis immediately after its acquisition by a United States Holder.
Market discount generally will accrue ratably during the period from the date
of acquisition to the maturity date of the Note, unless the United States
Holder elects to accrue such discount on the basis of the constant yield
method.
In lieu of including the accrued market discount in income at the time of
disposition, a United States Holder of a Note acquired at a market discount (or
acquired in exchange for a Note acquired at a market discount) may elect to
include the accrued market discount in income currently either ratably or using
the constant yield method. Once made, such an election applies to all other
obligations that the United States Holder purchases at a market discount during
the taxable year for which the election is made and in all subsequent taxable
years of the United States Holder, unless the Internal Revenue Service consents
to a revocation of the election. If an election is made to include accrued
market discount in income currently, the basis of a Note in the hands of the
United States Holder will be increased by the accrued market discount thereon
as it is includible in income.
Total Accrual Election
Pursuant to Treasury Regulations, certain Holders may elect (a "Total
Accrual Election") to treat all interest associated with a Note, including, but
not limited to, stated interest, OID, and market discount, as adjusted for
acquisition premium, as OID and accrue it under a modified constant yield
method. This election may offer Holders a simplified tax accounting treatment
for Notes acquired in a subsequent resale. The election may not be
45
<PAGE>
revoked without Internal Revenue Service consent and may result in deemed
elections regarding market discount and bond premium that are binding on all
debt instruments acquired by a Holder during the year of the Total Accrual
Election.
Sale, Retirement or Other Taxable Disposition of Notes
A United States Holder will recognize gain or loss on the sale, retirement
or other taxable disposition of a Note equal to the difference between the
amount realized by the United States Holder upon such sale, retirement or
disposition (less any portion of such amount that is allocable to accrued
interest or OID, which amount generally will be taxable to a Holder as ordinary
income) and the United States Holder's adjusted tax basis in such Note. Such
gain or loss will be capital gain or loss. Under current law, net capital gains
of individuals are, under certain circumstances, taxed at lower rates than
items of ordinary income. The deductibility of capital losses is subject to
limitations.
Non-United States Holders
U.S. Withholding Taxes
Subject to the discussion of backup withholding set forth below, payments
of principal, premium, if any, and interest (including OID) on the Notes to a
Non-United States Holder who is the beneficial owner of a Note will not be
subject to the 30% U.S. withholding tax; provided, in the case of a payment of
premium, if any, and interest (including OID) and Liquidated Damages, if any,
that (i) the beneficial owner of the Note does not actually or constructively
own 10% or more of the total combined voting power of all classes of stock of
the Company entitled to vote within the meaning of section 871(h)(3) of the
Code and the regulations thereunder, (ii) such beneficial owner is not a
controlled foreign corporation that is related to the Company through stock
ownership, (iii) such beneficial owner is not a bank whose receipt of interest
on a Note is described in section 881(c)(3)(A) of the Code and (iv) such
beneficial owner satisfies the statement requirement (described generally
below) set forth in section 871(h) (in the case of individuals) or section
881(c) (in the case of foreign corporations) of the Code and the regulations
thereunder.
To satisfy the statement requirement referred to in (iv) above, the
beneficial owner of a Note, or a financial institution holding the Note on
behalf of such owner, must provide, in accordance with specified procedures,
the Company or its paying agent, as the case may be, with a statement to the
effect that the beneficial owner is not a U.S. person. Pursuant to current
Temporary Treasury regulations, those requirements will be met if (1) the
beneficial owner provides his name and address, signs under penalties of
perjury and certifies, that he is not a U.S. person (which certification may be
made on an Internal Revenue Service Form W-8 (or successor form)) or (2) a
financial institution holding the Note on behalf of the beneficial owner
certifies, under penalties of perjury, that such statement has been received by
it and furnishes the Company or its paying agent, as the case may be, with a
copy thereof. Recently issued Treasury regulations (the "Withholding
Regulations") that will be effective with respect to payments made after
December 31, 1998, will provide alternative methods for satisfying the
statement requirement described in clause (iv) above. The Withholding
Regulations also will require, in the case of a Note held by a foreign
partnership, that (x) the certification described in clause (iv) above be
provided by the partners and (y) the partnership provide certain information,
including its taxpayer identification number. A look-through rule will apply in
the case of tiered partnerships.
If a Non-United States Holder cannot satisfy the requirements of the
"portfolio interest" exception described above, payments of premium, if any,
and interest (including OID) made to Non-United States Holders by the Company
(or its paying agent) with respect to the Notes will be subject to a 30% U.S.
withholding tax unless the beneficial owner of the Note provides the Company or
its paying agent, as the case may be, with, and keeps current, (i) a properly
executed Internal Revenue Service Form 1001 (or successor form) claiming an
exemption from U.S. withholding tax under a U.S. income tax treaty or (ii) a
properly executed Internal Revenue Service Form 4224 (or successor form)
claiming such premium and/or interest is exempt from U.S. withholding tax
because such premium and/or interest is effectively connected with the conduct
of a U.S. trade or business by the Non-United States Holder.
No U.S. withholding taxes will be imposed on any gain realized by a
Non-United States Holder upon the sale, retirement or other taxable disposition
of its Notes.
46
<PAGE>
Other U.S. Federal Income Taxes
If a Non-United States Holder of a Note is engaged in a trade or business
in the United States and premium, if any, or interest (including OID) paid on
such Note is effectively connected with the conduct of such U.S. trade or
business, the Non-United States Holder, although exempt from the U.S.
withholding tax discussed above, will be subject to U.S. federal income tax on
such effectively connected income on a net income basis in the same manner as
if such Holder were a United States Holder. See "United States Holders" above.
In addition, if such Non-United States Holder is a foreign corporation, it may
be subject to a branch profits tax equal to 30% of its effectively connected
earnings and profits for the taxable year, subject to adjustments. For this
purpose, such premium, if any, and interest (including OID) will be included in
such foreign corporation's effectively connected earnings and profits.
Any gain realized by a Non-United States Holder on the sale, retirement or
other taxable disposition of a Note generally will not be subject to U.S.
federal income tax unless (i) such gain is effectively connected with a trade
or business carried on in the U.S. by such Non-United States Holder, or (ii) in
the case of a Non-United States Holder who is an individual, such individual is
present in the United States for 183 days or more in the taxable year of such
sale, retirement or disposition, and certain other conditions are met.
U.S. Estate Taxes
A Note beneficially owned by an individual who is a Non-United States
Holder at the time of his or her death generally will not be subject to U.S.
federal estate tax as a result of such individual's death; provided that (i)
such individual does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company entitled to
vote within the meaning of section 871(h)(3) of the Code, and (ii) interest
payments (including payments of OID) with respect to such Note would not have
been, if received at the time of such individual's death, effectively connected
with the conduct of a U.S. trade or business by such individual.
Information Reporting and Backup Withholding
In general, information reporting requirements will apply to certain
payments of principal, interest, OID and premium paid on the Notes and to the
proceeds of the sale of a Note made to United States Holders other than certain
exempt recipients (such as corporations). A 31% backup withholding tax will
apply to such payments if the United States Holder fails to provide a taxpayer
identification number or certification of exempt status or fails to report its
full dividend and interest income.
No information reporting or backup withholding will be required with
respect to payments made by the Company or any paying agent to Non-United
States Holders if a statement described in (iv) under " -- Non-United States
Holders -- U.S. Withholding Taxes" has been received and the payor does not
have actual knowledge that the beneficial owner is a United States person.
In addition, Temporary Treasury regulations provide that backup
withholding and information reporting will not apply if payments of principal,
interest, OID or premium on a Note are paid or collected by a foreign office of
a custodian, nominee or other foreign agent on behalf of the beneficial owner
of such Note, or if a foreign office of a foreign broker (as defined in
applicable Treasury regulations) pays the proceeds of the sale of a Note to the
owner thereof. If, however, such nominee, custodian, agent or broker is, for
United States federal income tax purposes, a U.S. person, a controlled foreign
corporation or a foreign person that derives 50% or more of its gross income
for certain periods from the conduct of a trade or business in the United
States (or in the case of payments made after December 31, 1998, certain other
persons), such payments will not be subject to backup withholding but will be
subject to information reporting, unless (1) such custodian, nominee, agent or
broker has documentary evidence in its records that the beneficial owner is not
a U.S. person and certain other conditions are met or (2) the beneficial owner
otherwise establishes an exemption.
Payments of principal, interest, OID and premium on a Note to the
beneficial owner of a Note by a United States office of a custodian, nominee or
agent, or the payment by the United States office of a broker of the proceeds
of sale of a Note, will be subject to both backup withholding and information
reporting unless the beneficial owner provides the statement referred to in
(iv) above and the payor does not have actual knowledge that the beneficial
owner is a United States person or otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against such Holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.
47
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PLAN OF DISTRIBUTION
This Prospectus is to be used by Goldman Sachs in connection with offers
and sales of the Notes in market-making transactions effected from time to
time. Goldman Sachs may act as a principal or agent in such transactions,
including as agent for the counterparty when acting as principal or as agent
for both counterparties, and may receive compensation in the form of discounts
and commissions, including from both counterparties when it acts as agent for
both. Such sales will be made at prevailing market prices at the time of sale,
at prices related thereto or at negotiated prices.
Affiliates of Goldman Sachs currently own 51.0% of AMF Bowling Common
Stock. Of the 30,836,593 shares which may be deemed to be beneficially owned by
The Goldman Sachs Group, 19,317,476 are owned by GS Capital Partners II, L.P.,
7,679,488 shares are owned by GS Capital Partners II Offshore, L.P., 712,530
shares are owned by Goldman Sachs & Co. Verwaltungs GmbH, as nominee for GS
Capital Partners II (Germany) C.L.P., 451,922 shares are owned by Stone Street
Fund 1995, L.P., 772,646 shares are owned by Stone Street Fund 1996, L.P.,
508,546 shares are owned by Bridge Street Fund 1995, L.P. and 523,986 shares
are owned by Bridge Street Fund 1996, L.P. In addition, The Goldman Sachs Group
beneficially owns warrants to purchase 870,000 shares of Common Stock, which
were issued upon the closing of the Acquisition. GS Capital Partners II, L.P.,
GS Capital Partners II Offshore, L.P., GS Capital Partners II (Germany) C.L.P.,
Stone Street Fund 1995, L.P., Stone Street Fund 1996, L.P., Bridge Street Fund
1995, L.P., and Bridge Street Fund 1996, L.P., are investment partnerships.
Affiliates of The Goldman Sachs Group are the general, managing general or
managing partners of all such partnerships and have full voting and investment
power with respect to the holding of such partnerships. The shares above do not
include certain shares of Common Stock in client accounts managed by Goldman
Sachs (the "Managed Accounts"). Each of Goldman Sachs and The Goldman Sachs
Group disclaims beneficial ownership of the Common Stock in the Managed
Accounts. The address of The Goldman Sachs Group is 85 Broad Street, New York,
New York 10004.
Richard A. Friedman and Terence M. O'Toole, Managing Directors of Goldman
Sachs, and Peter M. Sacerdote, a limited partner of The Goldman Sachs Group,
are directors of the Company. Messrs. Friedman, O'Toole and Sacerdote were
designated by GSCP, under the terms of the Stockholders Agreement, to be
directors of the Company. See "Risk Factors -- Control by GSCP."
Goldman Sachs and the Company have entered into a registration rights
agreement with respect to the use by Goldman Sachs of this Prospectus. Pursuant
to such agreement, the Company agreed to bear all registration expenses
incurred under such agreement, and the Company agreed to indemnify Goldman
Sachs against certain liabilities, including liabilities under the Securities
Act.
Goldman Sachs and its affiliates were the initial purchasers of the debt
issued by Bowling Worldwide in connection with financing the Acquisition.
Goldman Sachs also served as financial advisor to the owners of the Company's
predecessor in connection with the Acquisition.
The Company has been advised by Goldman Sachs that, subject to applicable
laws and regulations, Goldman Sachs currently makes and intends to continue to
make, a market in the Notes. However, Goldman Sachs is not obligated to do so
and any such market-making may be interrupted or discontinued at any time
without notice. In addition, such market-making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act. There can be no
assurance that an active trading market will develop or be sustained. See "Risk
Factors -- Trading Market for the Notes."
Goldman Sachs has informed the Company that it does not intend to confirm
sales of the Notes to any accounts over which it exercises discretionary
authority without the prior specific written approval of such transactions by
the customer.
EXPERTS
The consolidated balance sheets of Holdings and subsidiaries as of
December 31, 1997 and 1996, and the related consolidated statements of income,
stockholder's equity, and cash flows for the year ended December 31, 1997, and
the period from inception (January 12, 1996) through December 31, 1996,
incorporated herein by reference in this Prospectus, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, which is also incorporated herein by reference, in
reliance upon the authority of said firm as experts in giving said report.
48
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The combined financial statements of AMF Bowling Group as of April 30,
1996 and December 31, 1995 and for the period from January 1, 1996 through
April 30, 1996 and the year ended December 31, 1995, incorporated in this
prospectus by reference the Annual Report on Form 10-K of AMF Bowling
Worldwide, Inc. for the year ended December 31, 1997, have been so incorporated
in reliance on the report of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
Bowling Worldwide has agreed to indemnify Price Waterhouse LLP for the
payment of all legal costs and expenses incurred in Price Waterhouse LLP's
successful defense of any legal action or proceeding that arises as a result of
inclusion of Price Waterhouse LLP's audit reports on the combined financial
statements of AMF Bowling Group in this Registration Statement.
VALIDITY OF THE NOTES
The validity of the Notes has been passed upon for the Company by
Wachtell, Lipton, Rosen & Katz, New York, New York, counsel to the Company.
49
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No person has been authorized in connection with the offering made hereby to
give any information or to make any representations other than those contained
in this Prospectus and, if given or made, such information or representation
must not be relied upon as having been authorized. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than the securities to which it relates or an offer to sell or the
solicitation of an offer to buy such securities in any circumstances in which
such offer or solicitation is unlawful. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that the information contained herein is correct as of any date
subsequent to the date hereof.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Available Information ...................... 2
Incorporation of Certain Information by
Reference ............................... 3
Forward-Looking Statements ................. 3
Prospectus Summary ......................... 5
Risk Factors ............................... 9
Ratio of Earnings to Fixed Charges ......... 15
Use of Proceeds ............................ 15
Description of Notes ....................... 16
Description of Certain Federal Income Tax
Consequences ............................ 44
Plan of Distribution ....................... 48
Experts .................................... 48
Validity of the Notes ...................... 49
</TABLE>
AMF Bowling Worldwide, Inc.
10-7/8% Senior Subordinated
Notes Due 2006
and 12-1/4% Senior Subordinated Discount
Notes Due 2006
(guaranteed by certain affiliated companies
as described herein)
------------------
[AMF LOGO]
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Goldman, Sachs & Co.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, incurred by the Company in connection
with the initial sale and distribution of Senior Subordinated Notes registered
by the Company:
<TABLE>
<S> <C>
Legal Fees and Expenses ............. $ 50,000
Printing Expenses ................... 15,000
Auditor's Fees and Expenses ......... 15,000
Miscellaneous Expenses .............. 50,000
--------
Total .............................. $130,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Section 102(b)(7) of the General Corporation Law of the State of Delaware
(the "DGCL"), provides that a corporation (in its original certificate of
incorporation or an amendment thereto) may eliminate or limit the personal
liability of a director (or certain persons who, pursuant to the provisions of
the certificate of incorporation, exercise or perform duties conferred or
imposed upon directors by the DGCL) to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that such
provisions shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL (providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions) or (iv) for any
transaction from which the director derived an improper personal benefit.
Article VIII, Section 1 of the Company's Certificate of Incorporation limits
the liability of directors thereof to the extent permitted by Section 102(b)(7)
of the DGCL.
Under Section 145 of the DGCL, in general, a corporation may indemnify its
directors, officers, employees or agents against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by them in connection with any action, suit or proceeding brought by
third parties to which they may be made parties by reason of their being or
having been directors, officers, employees or agents and shall so indemnify
such persons if they acted in good faith and in a manner they reasonably
believed to be in or not opposed to the best interest of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe their conduct was unlawful. Article VIII, Section 2(a) of the
Certificate of Incorporation of the Company provides that the Company shall
indemnify its officers, directors, employees and agents to the full extent
permitted by Delaware law.
Article VIII, Section 2(a) of the Company's Certificate of Incorporation
also provides that the Company shall indemnify any such person seeking
indemnification in connection with a proceeding initiated by such person only
if such proceeding was authorized by the Board. Any rights to indemnification
conferred in Section 2 are contract rights, and include the right to be paid by
the Company the expenses incurred in defending any such proceeding in advance
of its final disposition, except that, if the DGCL requires, the payment of
such expenses incurred by a director or officer in such capacity in advance of
final disposition shall be made only upon delivery to the Company of an
undertaking by or on behalf of such director or officer, to repay all amounts
so advanced if it is ultimately determined that such director or officer is not
entitled to be indemnified under Section 2 or otherwise. By action of the Board
of Directors, the Company may extend such indemnification to employees and
agents of the Company.
II-1
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Item 16. Exhibits and Financial Statement Schedules.
<TABLE>
<S> <C>
(a) Exhibits.
2.1 Stock Purchase Agreement, by and among AMF Group Holdings Inc. and the owners of the
Predecessor Company, dated as of February 16, 1996. (1)
2.2 Agreement among AMF Group Holdings Inc. and the owners of the Predecessor Company, dated as
of April 11, 1996, amending certain terms of the Stock Purchase Agreement. (2)
4.1 Indenture, dated as of March 21, 1996, as supplemented, by and among the Company, the
Guarantors and IBJ Schroder Bank & Trust Company with respect to the Senior Subordinated
Notes. (3)
4.2 Indenture, dated as of March 21, 1996, as supplemented, by and among the Company, the
Guarantors and American Bank National Association with respect to the Senior Subordinated Discount
Notes. (4)
4.3 Form of Senior Subordinated Note. (5)
4.4 Form of Senior Subordinated Discount Note. (6)
5.1 Opinion of Wachtell, Lipton, Rosen & Katz. (7)
12.1 Computation of ratio of earnings to fixed charges.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of Wachtell, Lipton, Rosen & Katz (contained in Exhibit 5.1).
24.1 Powers of Attorney (8)
24.2 Powers of Attorney for registrants added since prior filing.
25.1 Statement of Eligibility and Qualification of Trustee on Form T-1 of IBJ Schroder Bank & Trust
Company under the Trust Indenture Act of 1939. (9)
25.2 Statement of Eligibility and Qualification of Trustee on Form T-1 of American Bank National Association
under the Trust Indenture Act of 1939. (10)
27.1 Financial Data Schedule.
99.1 Form of Letter of Transmittal for the 10- 7/8% Senior Subordinated Notes due 2006. (11)
99.2 Form of Letter of Transmittal for the 12- 1/4% Senior Subordinated Discount Notes due 2006. (12)
(b) Financial Statement Schedule.
</TABLE>
- -------------
Notes to Exhibits:
<TABLE>
<S> <C>
(1) Incorporated by reference to Exhibit 2.1 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(2) Incorporated by reference to Exhibit 2.2 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(3) Incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(4) Incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(5) Incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(6) Incorporated by reference to Exhibit 4.4 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(7) Incorporated by reference to Exhibit 5.1 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(8) Incorporated by reference to Exhibit 24.1 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(9) Incorporated by reference to Exhibit 25.1 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(10) Incorporated by reference to Exhibit 25.2 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(11) Incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
(12) Incorporated by reference to Exhibit 99.2 to the Registration Statement on Form S-4 of AMF Group Inc.
(File No. 333-4877).
</TABLE>
II-2
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such
interim financial information.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING WORLDWIDE, INC.
By: /S/ DOUGLAS J. STANARD
---------------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------- ---------------
<S> <C>
*
- -------------------------------------- Director March 27, 1998
Richard A. Friedman
*
- -------------------------------------- Director March 27, 1998
Terence M. O'Toole
*
- -------------------------------------- Director March 27, 1998
Peter M. Sacerdote
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President March 27, 1998
Douglas J. Stanard
*
- -------------------------------------- Director/Executive March 27, 1998
Stephen E. Hare Vice President/Chief Financial
Officer/Treasurer
*
- -------------------------------------- Director March 27, 1998
Charles M. Diker
*
- -------------------------------------- Director March 27, 1998
Paul Edgerley
*
- -------------------------------------- Director March 27, 1998
Howard A. Lipson
*
- -------------------------------------- Director March 27, 1998
Thomas R. Wall, IV
*
- -------------------------------------- Vice President/Corporate March 27, 1998
Michael P. Bardaro Controller/Assistant Secretary
*By: /s/ DOUGLAS J. STANARD
-----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF GROUP HOLDINGS INC.
By: /S/ DOUGLAS J. STANARD
---------------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ----------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President March 27, 1998
Douglas J. Stanard
*
- -------------------------------------- Chairman of the Board March 27, 1998
Richard A. Friedman
*
- -------------------------------------- Director/Executive Vice March 27, 1998
Stephen E. Hare President/Financial Officer/
Chief Accounting Officer/
Treasurer
*By: /s/ DOUGLAS J. STANARD
------------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING HOLDINGS INC.
By: /S/ DOUGLAS J. STANARD
---------------------------------------
Douglas J. Stanard
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- -------------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President March 27, 1998
Douglas J. Stanard
*
- -------------------------------------- Director/Executive Vice March 27, 1998
Stephen E. Hare President/Chief Financial
Officer/Treasurer
*
- -------------------------------------- Vice President/Secretary/Chief March 27, 1998
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING CENTERS HOLDINGS INC.
By: /S/ DOUGLAS J. STANARD
------------------------------------
Douglas J. Stanard
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- --------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President March 27, 1998
Douglas J. Stanard
*
- -------------------------------------- Director/Executive Vice March 27, 1998
Stephen E. Hare President/Chief Financial
Officer/Treasurer
*
- -------------------------------------- Vice President/Secretary/ March 27, 1998
Michael P. Bardaro Chief Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING PRODUCTS, INC.
By: /S/ DOUGLAS J. STANARD
---------------------------------------
Douglas J. Stanard
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- --------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President March 27, 1998
- --------------------------------------
Douglas J. Stanard
* Director/Executive Vice March 27, 1998
- -------------------------------------- President/Chief Financial
Stephen E. Hare Officer/Treasurer
* Vice President/Corporate March 27, 1998
- -------------------------------------- Controller/Secretary/Chief
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF WORLDWIDE BOWLING CENTERS HOLDINGS INC.
By: /S/ DOUGLAS J. STANARD
---------------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- --------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President March 27, 1998
Douglas J. Stanard
*
- -------------------------------------- Director/Executive Vice March 27, 1998
Stephen E. Hare President/Chief Financial
Officer/Treasurer
*
- -------------------------------------- Vice President/Corporate March 27, 1998
Michael P. Bardaro Controller/Secretary/Chief
Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING CENTERS, INC.
By: /S/ DOUGLAS J. STANARD
-----------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- --------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President March 27, 1998
Douglas J. Stanard
*
- -------------------------------------- Vice President/Treasurer/ March 27, 1998
Michael P. Bardaro Assistant Secretary/Chief
Financial and Accounting
Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
BUSH RIVER CORPORATION
By: /S/ DOUGLAS J. STANARD
---------------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------ ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President March 27, 1998
Douglas J. Stanard
*
- -------------------------------------- Treasurer/Assistant March 27, 1998
Michael P. Bardaro Secretary/Chief Financial and
Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BEVERAGE COMPANY OF OREGON, INC.
By: /S/ DOUGLAS J. STANARD
---------------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------ ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President March 27, 1998
Douglas J. Stanard
*
- -------------------------------------- Treasurer/Assistant March 27, 1998
Michael P. Bardaro Secretary/Chief Financial and
Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
KING LOUIE LENEXA, INC.
By: /S/ DOUGLAS J. STANARD
-------------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------ ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President March 27, 1998
Douglas J. Stanard
*
- -------------------------------------- Treasurer/Assistant March 27, 1998
Michael P. Bardaro Secretary/Chief Financial and
Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BEVERAGE COMPANY OF W.VA., INC.
By: /S/ DOUGLAS J. STANARD
------------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------ ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President March 27, 1998
Douglas J. Stanard
*
- -------------------------------------- Treasurer/Assistant March 27, 1998
Michael P. Bardaro Secretary/Chief Financial and
Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING CENTERS SWITZERLAND INC.
By: *
-------------------------------------
Giuseppe Avolio
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------------ ---------------
<S> <C>
*
- -------------------------------------- President March 27, 1998
Giuseppe Avolio
/S/ DOUGLAS J. STANARD
- -------------------------------------- Vice President/Secretary/ March 27, 1998
Douglas J. Stanard Director
*
- -------------------------------------- Executive Vice March 27, 1998
Stephen E. Hare President/ Chief Financial Officer/
Treasurer
*
- -------------------------------------- Vice President/Assistant March 27, 1998
Michael P. Bardaro Secretary/Chief Accounting
Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING CENTERS (AUST) INTERNATIONAL INC.
By: /S/ DOUGLAS J. STANARD
---------------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------ ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President/Assistant March 27, 1998
Douglas J. Stanard Secretary
*
- -------------------------------------- Executive Vice President/ March 27,1998
Stephen E. Hare Chief Financial Officer/
Treasurer
*
- -------------------------------------- Vice President/Secretary/ March 27, 1998
Michael P. Bardaro Chief Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING CENTERS (CANADA) INTERNATIONAL INC.
By: /S/ DOUGLAS J. STANARD
---------------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- -------------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD
- -------------------------------------- Director/President/Assistant March 27, 1998
Douglas J. Stanard Secretary
*
- -------------------------------------- Director March 27, 1998
Lynda R. Ross
*
- -------------------------------------- Director March 27, 1998
Sandra I. Harris
*
- -------------------------------------- Executive Vice President/Chief March 27, 1998
Stephen E. Hare Financial Officer/Treasurer
*
- -------------------------------------- Vice President/Secretary/ March 27, 1998
Michael P. Bardaro Assistant Treasurer/Chief
Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING CENTERS (HONG KONG) INTERNATIONAL INC.
By: /S/ DOUGLAS J. STANARD
-------------------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------ ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/Assistant Secretary March 27, 1998
- --------------------------------------
Douglas J. Stanard
* Executive Vice President/ March 27, 1998
- -------------------------------------- Chief Financial Officer/
Stephen E. Hare Treasurer
* Vice President/Secretary/ March 27, 1998
- -------------------------------------- Assistant Treasurer/Chief
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING CENTERS INTERNATIONAL INC.
By: *
------------------------------------
Kore Iijima
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ----------------------------- ---------------
<S> <C>
* Managing Director/President March 27, 1998
- --------------------------------------
Kore Iijima
/S/ DOUGLAS J. STANARD Director/Vice President/ March 27, 1998
- -------------------------------------- Secretary
Douglas J. Stanard
* Executive Vice President/ March 27, 1998
- -------------------------------------- Chief Financial Officer/
Stephen E. Hare Treasurer
* Vice President/Assistant March 27, 1998
- -------------------------------------- Secretary/Chief Accounting
Michael P. Bardaro Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BCO-UK ONE, INC.
By: /S/ DOUGLAS J. STANARD
-----------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------ ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President/Assistant March 27, 1998
- -------------------------------------- Secretary
Douglas J. Stanard
* Executive Vice President/ March 27, 1998
- -------------------------------------- Chief Financial Officer/
Stephen E. Hare Treasurer
* Vice President/Assistant March 27, 1998
- -------------------------------------- Treasurer/Secretary/Chief
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BCO-UK TWO, INC.
By: /S/ DOUGLAS J. STANARD
-----------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- --------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President March 27, 1998
- --------------------------------------
Douglas J. Stanard
* Executive Vice President/ March 27, 1998
- -------------------------------------- Chief Financial Officer/
Stephen E. Hare Treasurer
* Vice President/Assistant March 27, 1998
- -------------------------------------- Treasurer/Secretary/Chief
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BCO-FRANCE ONE, INC.
By: /S/ DOUGLAS J. STANARD
-----------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- --------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President March 27, 1998
- --------------------------------------
Douglas J. Stanard
* Executive Vice President/ March 27, 1998
- -------------------------------------- Chief Financial Officer/
Stephen E. Hare Treasurer
* Vice President/Assistant March 27, 1998
- -------------------------------------- Treasurer/Secretary/Chief
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BCO-FRANCE TWO, INC.
By: /S/ DOUGLAS J. STANARD
-----------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- --------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President March 27, 1998
- --------------------------------------
Douglas J. Stanard
* Executive Vice President/ March 27, 1998
- -------------------------------------- Chief Financial Officer/
Stephen E. Hare Treasurer
* Vice President/Assistant March 27, 1998
- -------------------------------------- Treasurer/Secretary/Chief
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING CENTERS SPAIN, INC.
By: *
-----------------------------------
Asuncion Merinero
President/Managing Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- -------------------------------- ---------------
<S> <C>
* Chief Executive Officer and March 27, 1998
- -------------------------------------- Managing Director
Asuncion Merinero
/S/ DOUGLAS J. STANARD Director/Vice President/ March 27, 1998
- -------------------------------------- Secretary
Douglas J. Stanard
* Executive Vice President/Chief March 27, 1998
- -------------------------------------- Financial Officer/Treasurer
Stephen E. Hare
* Vice President/Assistant March 27, 1998
- -------------------------------------- Secretary/Chief Accounting
Michael P. Bardaro Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING MEXICO HOLDING, ING.
By: /S/ DOUGLAS J. STANARD
-----------------------------------
Douglas J. Stanard
Director/President/Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------ ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President/Assistant March 27, 1998
- -------------------------------------- Secretary
Douglas J. Stanard
* Executive Vice President/ March 27, 1998
- -------------------------------------- Chief Financial Officer/
Stephen E. Hare Treasurer
* Vice President Assistant March 27, 1998
- -------------------------------------- Treasurer/ Secretary/Chief
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
BOLICHES AMF, INC.
By: /S/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Director/President/Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------ ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President/Assistant March 27, 1998
- -------------------------------------- Secretary
Douglas J. Stanard
* Executive Vice President/ March 27, 1998
- -------------------------------------- Chief Financial Officer/
Stephen E. Hare Treasurer
* Vice President/Assistant March 27, 1998
- -------------------------------------- Treasurer/Secretary/Chief
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-26
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BCO-CHINA, INC.
By: /S/ DOUGLAS J. STANARD
-------------------------------------
Douglas J. Stanard
Director/President/Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- ------------------------------ ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President/Assistant March 27, 1998
- -------------------------------------- Secretary
Douglas J. Stanard
* Executive Vice President/ March 27, 1998
- -------------------------------------- Chief Financial Officer/
Stephen E. Hare Treasurer
* Vice President/Assistant March 27, 1998
- -------------------------------------- Treasurer/Secretary/Chief
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-27
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMF BOWLING CENTERS CHINA, INC.
By: /S/ DOUGLAS J. STANARD
-----------------------------------
Douglas J. Stanard
Director/President/Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- -------------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President/Assistant March 27, 1998
- -------------------------------------- Secretary
Douglas J. Stanard
* Executive Vice President/Chief March 27, 1998
- -------------------------------------- Financial Officer/Treasurer
Stephen E. Hare
* Vice President/Assistant March 27, 1998
- -------------------------------------- Treasurer/Secretary/Chief
Michael P. Bardaro Accounting Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
AMERICAN RECREATION CENTERS, INC.
By: /S/ DOUGLAS J. STANARD
-----------------------------------
Douglas J. Stanard
Director/President/Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- -------------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President/Assistant March 27, 1998
- -------------------------------------- Secretary
Douglas J. Stanard
* Executive Vice President/Chief March 27, 1998
- -------------------------------------- Financial Officer/Treasurer
Stephen E. Hare
* Vice President/Treasurer/ March 27, 1998
- -------------------------------------- Secretary/Chief Accounting
Michael P. Bardaro Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-29
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
BURLEIGH RECREATION, INC.
By: /S/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- --------------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President March 27, 1998
- --------------------------------------
Douglas J. Stanard
* Vice President/Treasurer/ March 27, 1998
- -------------------------------------- Assistant Secretary/Chief
Michael P. Bardaro Financial and Accounting
Officer
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-30
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richmond, Commonwealth of Virginia, as of the 27th
day of March, 1998.
300,INC.
By: /S/ DOUGLAS J. STANARD
-----------------------------------
Douglas J. Stanard
Director/President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- --------------------------------------- --------------------- ---------------
<S> <C>
/S/ DOUGLAS J. STANARD Director/President March 27, 1998
- --------------------------------------
Douglas J. Stanard
* Director March 27, 1998
- --------------------------------------
James Self
* Chief Financial and March 27, 1998
- -------------------------------------- Accounting Officer
Michael P. Bardaro
*By: /s/ DOUGLAS J. STANARD
----------------------------------
Douglas J. Stanard
Attorney-in-Fact
</TABLE>
II-31
<TABLE>
AMF Group Holdings Inc. Exhibit 12.1
Computation of Ratio of Earnings to Fixed Charges
(in millions of dollars)
<CAPTION>
For the Year ended December 31,
---------------------------------------
Predecessor Company |
------------------------------------------------------- | Pro Forma
| AMF Group AMF Group
Years Ended December 31, Four Months |Holdings Inc. Holdings Inc.
--------------------------------------- Ended |--------------- ----------------------
1993 1994 1995 April 30, 1996 | 1996 (a) 1996 (b) 1997
---- ---- ---- -------------- | -------- -------- ----
<S> <C>
Pre-tax income (loss) from |
continuing operations $ 97.5 $ 115.8 $ 108.9 $ (13.6) | $ (30.6) $ (28.2) $ (43.7)
|
Fixed charges: |
Interest expense 5.0 7.4 15.7 4.5 | 106.2 78.0 118.4
|
Amortization of debt issue costs |
on all indebtedness - - - - | 4.5 3.3 4.9
|
Rentals - 33% 4.8 5.0 5.6 2.5 | 7.0 4.5 8.0
------------ ------------ ------------- --------------- |--------------- ---------- ----------
|
Total fixed charges 9.8 12.4 21.3 7.0 | 117.7 85.8 131.3
------------ ------------ ------------- --------------- ---------------- ---------- ----------
|
Earnings before income taxes |
and fixed charges $ 107.3 $ 128.2 $ 130.2 $ (6.6) | $ 87.1 $ 57.6 $ 87.6
============ ============ ============= =============== |=============== ========== ==========
|
Ratio of earnings to fixed charges 11.0 10.3 6.1 (0.9) | 0.7 0.7 0.7
============ ============ ============= =============== |=============== ========== ==========
|
Deficiency of earnings to fixed |
charges $ - $ - $ - $ (13.6) | $ (30.6) $ (28.2) $ (43.7)
============ ============ ============= =============== |=============== ========== ==========
</TABLE>
- ------------------
(a) Represents results of operations from January 1, 1996 through December 31,
1996 on a pro forma basis.
(b) For the period from the inception date of January 12, 1996 through
December 31, 1996, which includes the results of operations of the acquired
business from May 1, 1996 through December 31, 1996.
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-3 Registration Statement (File No.
33-4877) of our reports dated Febuary 20, 1998, included in AMF Bowling
Worldwide, Inc.'s Form 10-K Annual Report for the year ended December 31, 1997,
and to all references to our Firm included in this Form S-3 Registration
Statement.
ARTHUR ANDERSEN LLP
Richmond, Virginia
March 25, 1998
EXHIBIT 23.2
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
June 28, 1996 appearing on page 60 of AMF Bowling Worldwide, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1997. We also consent to the
reference to us under the heading "Experts."
Price Waterhouse LLP
Norfolk, Virginia
March 23, 1998
EXHIBIT 24.2
300, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director and officer of 300,
INC. whose signature appears below constitutes and appoints Douglas J. Stanard,
Stephen E. Hare and Michael P. Bardaro and each of them, with full power to act
without the other, his true and lawful attorneys-in-fact and agents, with full
and several power of substitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments, including post-effective
amendments, and supplements to the registration statement on Form S-3 filed
initially with the Securities and Exchange Commission on March 27, 1998, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as they or he might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Date: March 27, 1998
Name: Title:
/s/ James Self
- ---------------------------------
James Self Director
/s/ Michael P. Bardaro
- ---------------------------------
Michael P. Bardaro Chief Financial and Accounting Officer
<PAGE>
AMERICAN RECREATION CENTERS, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director and officer of
AMERICAN RECREATION CENTERS, INC. whose signature appears below constitutes and
appoints Douglas J. Stanard, Stephen E. Hare and Michael P. Bardaro and each of
them, with full power to act without the other, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign any or
all amendments, including post-effective amendments, and supplements to the
registration statement on Form S-3 filed initially with the Securities and
Exchange Commission on March 27, 1998, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as they or he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Date: March 27, 1998
Name: Title:
/s/ Douglas J. Stanard
- --------------------------------
Douglas J. Stanard Director/President/Assistant Secretary
/s/ Stephen E. Hare
- --------------------------------
Stephen E. Hare Executive Vice President/Chief Financial
Officer/Treasurer
/s/ Michael P. Bardaro
- --------------------------------
Michael P. Bardaro Vice President/Treasurer/
Secretary/Chief Accounting Officer
<PAGE>
BURLEIGH RECREATION, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director and officer of
BURLEIGH RECREATION, INC. whose signature appears below constitutes and appoints
Douglas J. Stanard, Stephen E. Hare and Michael P. Bardaro and each of them,
with full power to act without the other, his true and lawful attorneys-in-fact
and agents, with full and several power of substitution, for him and in his
name, place and stead, in any and all capacities, to sign any or all
amendments, including post-effective amendments, and supplements to the
registration statement on Form S-3 filed initially with the Securities and
Exchange Commission on March 27, 1998, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as they or he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Date: March 27, 1998
Name: Title:
/s/ Douglas J. Stanard
- ------------------------------------
Douglas J. Stanard Director/President
/s/ Michael P. Bardaro
- ------------------------------------
Michael P. Bardaro Vice President/Treasurer/Assistant
Secretary/Chief Accounting Officer
<PAGE>
AMF BOWLING CENTERS INTERNATIONAL INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director and officer of AMF
BOWLING CENTERS INTERNATIONAL INC. whose signature appears below constitutes and
appoints Douglas J. Stanard, Stephen E. Hare and Michael P. Bardaro and each of
them, with full power to act without the other, his true and lawful
attorneys-in-fact and agents, with full and several power of substitution, for
him and in his name, place and stead, in any and all capacities, to sign any or
all amendments, including post-effective amendments, and supplements to the
registration statement on Form S-3 filed initially with the Securities and
Exchange Commission on March 27, 1998, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as they or he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Date: March 27, 1998
Name: Title:
/s/ Kore Iijima
- -----------------------------------
Kore Iijima Managing Director and President
<PAGE>
AMF BOWLING WORLDWIDE, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director and officer of AMF
BOWLING WORLDWIDE, INC. whose signature appears below constitutes and appoints
Douglas J. Stanard, Stephen E. Hare and Michael P. Bardaro and each of them,
with full power to act without the other, his true and lawful attorneys-in-fact
and agents, with full and several power of substitution, for him and in his
name, place and stead, in any and all capacities, to sign any or all
amendments, including post-effective amendments, and supplements to the
registration statement on Form S-3 filed initially with the Securities and
Exchange Commission on March 27, 1998, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as they or he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Date: March 27, 1998
Name: Title:
/s/ Thomas R. Wall, IV
- -----------------------------------
Thomas R. Wall, IV Director
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 35,790
<SECURITIES> 0
<RECEIVABLES> 73,991
<ALLOWANCES> 5,012
<INVENTORY> 56,568
<CURRENT-ASSETS> 183,398
<PP&E> 750,885
<DEPRECIATION> 64,480
<TOTAL-ASSETS> 1,831,813
<CURRENT-LIABILITIES> 139,395
<BONDS> 1,033,223
0
0
<COMMON> 749,149
<OTHER-SE> (95,287)
<TOTAL-LIABILITY-AND-EQUITY> 1,831,813
<SALES> 713,668
<TOTAL-REVENUES> 713,668
<CGS> 212,544
<TOTAL-COSTS> 630,743
<OTHER-EXPENSES> 8,254
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 118,385
<INCOME-PRETAX> (43,714)
<INCOME-TAX> (12,793)
<INCOME-CONTINUING> (30,921)
<DISCONTINUED> 0
<EXTRAORDINARY> (24,728)
<CHANGES> 0
<NET-INCOME> (55,649)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
